About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, December 14th, 6:30PM
rss
Latest Headlines

Loss making sales on the rise

A growing number of investors are seeing the sale of their properties result in a loss rather than a profit as the property market slows.

Wednesday, January 24th 2018, 4:00PM 1 Comment

by The Landlord

CoreLogic’s latest Pain and Gain report shows that the number of resales resulting in a gross loss in the third quarter of 2017 rose to 4.3%. 

Nationwide, total gains declined by nearly $900 million.

In Auckland, total profits from gain-making property resales came in at $1.56 billion, which was half of the peak value of $3.0 billion in the third quarter of 2015.

CoreLogic head of research Nick Goodall says that capital gains have slowed and, in some cases, moved into negative territory. 

“This may be a sign of market fatigue with buyers choosing to cash out of the market rather than risk holding the property and potentially experiencing further loss.”

Apartments are faring worse than houses in the resale stakes, with 10.1% of apartments being sold at a loss as compared to 4.0% of houses.

That equates to a median loss of $25,000 for apartments as compared to $18,000 for houses.

Both Auckland and Christchurch are seeing an upwards trend for resales at a loss for both investors and owner occupiers.

But it is investors who are faring worse, with 4.1% in Auckland and 15.2% in Christchurch experiencing loss making resales.

Goodall says the lift in the investor proportion bucks the trend of the last few years.

“Investors are under increased scrutiny from the new government with the quality of rental properties needing to improve and to be managed by future regulation by the recently passed Healthy Homes Guarantee Act.

“This may cause more investors to sell out of the market to avoid bearing the costs of improvement or to raise funds for other rental properties.”

Looking at markets around the country, Christchurch saw the highest proportion of loss-making resales: up to 11.1% from 8.1% in the previous quarter.

It was followed by Tauranga (3.9%) and Auckland (3.3%), which equated to a slight increase for both as compared to the previous quarter.

Hamilton and Wellington’s share of loss-making sales remains flat, at around 1.5%.

The story was very different for Queenstown which, for the second quarter in a row, had no resales at a loss.

Goodall says this reflects the strength of the market there.

However, nationally resale gains ($3.4 billion) continued to dominate resale losses ($30 million) over the third quarter.

 

« Free Investment Property Showcase Events: Auckland, Wellington and ChristchurchFalling affordability the norm »

Special Offers

Comments from our readers

On 25 January 2018 at 10:28 pm michaeljakob said:
Are you guys kidding? Auckland has tripled in value over the past 10 years so a pull back is completely inevitable.
Instead of printing BS look at areas which are booming like Dunedin. Why are they booming? Because have not moved much during the past 10 years. Now investors are piling in and catch-up is happening.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com