New Zealand home resales at a loss hit highest rate since 2012

What happened

On Thursday in Wellington, Cotality reported that nearly one in six properties resold in the September quarter went for a loss, the most in 14 years. Those loss-making homes had typically been owned for a median 4.5 years, pointing to faster turnarounds than usual.

The typical loss was NZ$60,000, or $33,600, while the median gain on profitable resales was NZ$270,000. Homes that turned a profit had been held for a median 10.4 years, underscoring the value of time in the market.

Who is feeling the pinch

Apartments bore the brunt: 48% of apartment resales were under water in the quarter, compared with 22.5% for townhouses and 13.4% for standalone houses. Cotality added there were also fewer apartment deals during the period.

Kelvin Davidson, Cotality New Zealand's chief property economist, said, "Most buyers would not have purchased with the intention of selling again so soon, but circumstances might have worked against them, such as a family or job change, or financial strain brought on by previously sharp rises in mortgage rates." He also noted, "Apartments tend to deliver less price growth than other property types over time, so are always a little more vulnerable to losses."

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Why this is occurring

Cotality's data show New Zealand's housing downturn is persisting, with prices declining for seven consecutive months and now sitting at their weakest since late 2020. An 11-year-high unemployment rate, muted wage gains and elevated living costs are putting pressure on mortgage holders, which may be pushing some to sell earlier than planned.

According to Davidson, the decline has been milder than the post-global financial crisis period: back then, profitable resales slid from 98% in mid 2007 to 81% by early 2009. "Overall, the latest figures are not a sign of a fresh collapse," he said. "Instead, they reflect the large falls in property values already seen, with more sellers progressively just having to make a deal in softer market conditions as each quarter passes."

What this means for your portfolio

This market is rewarding patience: losses clustered among owners who held around 4.5 years, while decade-plus holders booked sizable gains. With profitability still at 84.2% but well off the 2022 peak, New Zealand housing has shifted from easy wins to selective outcomes, and holding period plus property type are doing more of the work.

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