PHOTO: Auckland, New Zealand. FILE
An Auckland property that recently sold for $300,000 less than its purchase price two years ago has made headlines this week, but it’s far from the biggest loss a seller has experienced this year.
The Māngere East property, sold in a mortgagee sale for $490,000, had last been purchased for $750,000 in March 2022.
Nick Goodall, Head of Research at property firm CoreLogic, revealed that the largest loss this year was a Remuera apartment, which sold for $1 million less than its previous purchase price. The apartment fetched $5.5 million on April 12, after being bought for $6.5 million in March 2018.
Goodall described it as a high-end property, with limited demand for apartments of that caliber. “It’s one of those cases where the buyer intended to hold the property long-term, but circumstances changed, and the market wasn’t favorable when they needed to sell.”
He noted that high interest rates this year have further reduced the pool of buyers willing to spend such large sums on apartments.
The second-largest loss involved a house on Ngaio Street, Ōrākei, which sold for $1.95 million after being purchased for $2.71 million just three years earlier, resulting in a $760,000 loss.
In third place was a Hill Road, Palm Beach home, which sold for $1.24 million, losing $660,000 from its purchase price of $1.9 million just two years ago.
Goodall pointed out that most of the top five losses—including properties in Ventnor Street, Seatoun, and Dornoch Place, Papakōwhai—were homes bought at the market’s peak in late 2021 or early 2022.
“The market was booming at the time, and some buyers might have paid slightly inflated prices. As interest rates rose, it became harder for them, possibly due to changes in their income or financial situation.”
Real estate agents talking up the Auckland housing market – ‘the market has finally turned a corner’
Steve Goodey, a property investor and coach, echoed these sentiments, saying that losses often stem more from the seller’s circumstances than the type of property. He cited an example of a Wellington home where one agent listed the seller’s desired price at $1.7 million, while another had it at $700,000 for a mortgagee sale.
“Big losses usually occur when the vendor is forced to sell due to circumstances like mortgagee sales, divorces, or bank issues,” Goodey said.
SOURCE: RNZ
Auckland 2024 Supreme House of the Year