The Pain and Gain Report

PHOTO: The Pain and Gain Report

CoreLogic New Zealand’s latest Pain and Gain Report for Q4 2020 found profit-making residential property resales between October and December increased to 98.4%; 20 basis points higher than the previous record of 98.2% in Q4 2005.

This national median resale gain equated to $276,000, with a median hold period of 7.3 years. On the flipside, 1.6% of resales in Q4 2020 were made below the original purchase price, or a median resale loss or ‘pain’ of just $25,000.

The Pain and Gain Report is New Zealand’s only regular analysis of specific property resales and how they compare to the home’s previous purchase price.

CoreLogic’s Senior Property Economist, Kelvin Davidson, says “This is the highest and most consistent share of properties being resold for gross profits than at any point since at least the mid-1990s when CoreLogic began recording data for this series. The strength in profit-making resales is a reflection of a long and strong growth cycle that has been spurred on by the recent unprecedented surge in values in the final few months of 2020.”

Mr Davidson says a similarly strong result was seen across both houses and apartments. “Houses recorded 98.7% of resales at a gain, up from 97.5% in Q3, while 90% of apartments resold for a gain, up from 87% in Q3. Apartments have historically shown lower resale-for-profit figures than houses, but this sector was also robust in Q4, with profit-making resales higher than typical figures in the past.”

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