PHOTO: CoreLogic NZ
The proportion of properties being resold for a profit was 99% in the three months to June 2021 – this is the highest on record, up from 98.9% in the first quarter of 2021.
The size of the median resale gain recorded for the period was $347,500.
CoreLogic’s Chief Property Economist Kelvin Davidson said the extraordinary gains are a stark contrast to the housing market crash predictions made in mid-2020 at the height of COVID-19’s first wave.
In the 25-year history of the data series, he said there’s never been as many resellers, in proportional terms, making gross profits from real estate sales.
“The strength and resilience of the market reflects the support measures for the wider economy that were put in place by the New Zealand Government alongside very low mortgage rates, which have pushed property values sharply higher.”
“The current level of ‘pain’ in the market is more like being tickled with a feather than a serious cut,” Mr Davidson said.
Given the move back to COVID alert level four it’s no surprise that the Reserve Bank (RBNZ) has chosen to delay an increase to the official cash rate (OCR) today. Our Chief Property Economist Kelvin Davidson shares his view here ????https://t.co/2hY8DXImor#rbnz #propertymarket pic.twitter.com/sdEwjnyRHT
— CoreLogic NZ (@CoreLogicNZ) August 18, 2021
Key findings for Pain & Gain, June Quarter 2021
- Nationally the proportion of properties being resold for more than the original purchase price (i.e. a gross profit or “gain”) in Q2 2021 was 99.0%
- The size of the median resale gain recorded for the period was $347,500.
- New Zealand property values have increased 24.8% nationally for the year to July 2021.
- For those who have owned a property for seven to 10 years a resale profit is almost inevitable.
- Strong resale gains have been replicated across each of the main centres and provincial markets as well as houses and apartments and by owner occupiers and investors.
- The main drivers for the record resale gross profits are tight listings and low mortgage rates.
READ THE FULL REPORT HERE: PAIN & GAIN REPORT
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