As mortgage lending crashes to nearly zero amid a prolonged property market slump, the number of homes selling for a loss is steadily increasing hitting 13.1% – the highest since 2012.

Nearly one in eight residential properties sold for a median of $60,000 less than the purchase price in the second quarter of this year, Cotality NZ data shows. Across the quarter this was a total loss of $159 million nationally.

Investors were the hardest hit, with 13.5% suffering a loss compared to 12.2% of owner-occupiers.

Cotality NZ chief property economist Kelvin Davidson says it has been a gradual downwards slide for resale performance since early 2022 when less than 1% were loss making, rather than a slump seen around the global financial crisis (GFC) when the proportion of profitable resales dropped from about 98% in mid-2007 to about 80% within two years.

“One key difference this time has been the lack of loan repayment problems and mortgagee sales this time, partly reflecting stronger serviceability testing within the banks.”

Conversely, the number of properties being resold for more than the original purchase price in the second quarter was 86.9% – still a fairly high result, Davidson says.

The national median gross profit for resales was $280,000, down from the late 2021 peak of $440,000, but still within the range seen since mid-2024 of about $280,000-$300,000. This was a total gain nationally of $3.83 billion in the quarter.

Hold periods always play a key role. For profit-making resales, the median ownership period had been 10.4 years – a new record high – compared to 4.3 years for the losses.

“Buying and selling in such a short period time of the past four to five years has certainly been a tough proposition for people finding themselves in that situation,” Davidson says.

“Some people may be choosing to hold for longer than before to ‘wait for the recovery’ or they may simply be forced to extend ownership periods because achieving a sale is trickier than usual.”

The splits by region, property type, and owner type are telling a consistent message to previous reports, with Auckland, down 20.9% and Wellington, down 18.4% the weakest of the main centres. Hamilton was down 13.4%, Tauranga 10.7%, Dunedin 8% and Christchurch 5.3%.

Apartments’ tendency for less capital growth over time (even in a boom) means they’re always more susceptible to a gross loss at resale. The share of resales made for a gross loss always tends to be higher than for houses, and this remained the case in Q2 2026, at 45.2% – or a touch less than 55% made for a profit.

This was the weakest resale performance for apartments since Q3 2010, when the ‘pain’ figure reached 48.2%.

Davidson says resale profits will not be cash windfalls for many owner - occupiers, instead that new equity will generally just go back into the next purchase and with economic uncertainty still high and buyers having the pricing power, it’s difficult to see resellers faring too much better for a while yet.