House sale gains hit record high

PHOTO: Sold sign outside house (file picture). (Source: rnz.co.nz)

The resale gains on houses have hit a record high, but may be at or close to their peak.

CoreLogic’s latest “Pain and Gain” report, which compares a property’s sale price with the previous price, shows that 99.1 percent of properties resold in the three months ended September made a profit.

That was marginally higher than the June survey with the median gain on sales rising to $363,000 from $355,000. The median resale loss rose to $35,000 from $30,000.

CoreLogic chief economist Kelvin Davidson said “It’s certainly been a ‘seller’s market’ in the past nine to 12 months, with the supply/demand balance tight and mortgage rates low”.

Houses sold during the quarter had been held just over seven and it was almost “inevitable” that sellers had made considerable capital gains, although in many cases they were only on paper, he said.

“It’s also important to note that for many owner-occupiers, a resale gain does not generally equate to a cash windfall, unless they’re downsizing or relocating.”

In the major centres, Wellington returned the highest “gain” with a median resale profit of $555,000.