The percentage of residential property sales made at a loss hit a 12-year high in the third quarter (Q3) of this year, according to property data company Cotality's latest Pain and Gain Report.
Cotality found 12.2% of resales in Q3, excluding new properties being sold for the first time, were sold for less than their previous purchase price, leaving their vendors with a loss.
That's up from a peak of just 0.7% of loss making resales at the height of the last property boom in the fourth quarter (Q4) of 2021, and means loss making sales are running at their highest levels since the second quarter (Q2) of 2013.
Conversely of course, 87.8% of resales in Q3 this year were made at a profit for their vendors, although that was the lowest level of sales making a capital gain in the last 12 years.
Loss making resales were greatest in the Auckland Region, where nearly one-in-five (19.3%) of resales were made at a loss in Q3 this year.
Around the other main centres, the percentage of resales making a loss in Hamilton was 15.5%, Tauranga 10.8%, Wellington 15.8%, Christchurch 5.5% and Dunedin 10.0%.
Across the entire country, the median loss on properties that sold for less than their previous purchase price was $50,000, while the median capital gain on those that sold for a profit was $270,000.
In Auckland the median loss was $75,000, and the median gain was $338,000.
The differences in the size of capital losses and gains was also reflected in the length of time properties had been owned for before they were sold.
The median length of ownership for properties sold at a loss was 3.7 years, while the median length of ownership for properties sold at a profit was 9.5 years.
It should be remembered that selling expenses such as agency commissions and legal fees would have increased the size of the losses and reduced the size of the gains on most sales. These can have have a significant impact on the total loss or profit made by the vendor when a property is sold.
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61 Comments
These resale for losses I see everywhere about Auckland......hundreds of thousands being lost, or about to be, as the population comes to the realisation that the Ponzi is broken and faulty, beyond repair. The NZ housing market crash, is now on par with the 1970s crash.
All the Spruiker Landlords, are now stinky bagholders.......and very, very, very slow to read the room!
1970s experiened a 40% decline in values - where are you seeing that? Got any examples you could post?
You could try this chart on max timescale:
https://fred.stlouisfed.org/series/QNZR628BIS
(I'm not agreeing or disagreeing with gecko)
Fascinating - thanks IO.
Yes the major cities of NZ, has seen more than -40% losses in REAL terms since 2021.
Remember if property is not beating inflation, its going back in real value. Property has been the worst of all inflation hedges.
Inflation loss, plus numerical losses, have been significant.
Burn baby burn.
It’s not really a loss as someone made the profit out of it when it sold higher. It’s essentially a zero sum game. Which is why we really need to stop treating it like the asset we do. Let’s take it back to Maslow’s hierarchy and treat it as a necessity
It’s not really a loss as someone made the profit out of it when it sold higher.
That depends. If we have had 25% loss in purchasing power since 2020 and someone sold at 25% higher than 2020 then they haven't made any real profit as they are getting the same level of purchasing power as when they bought.
Rents down
Tenancy vacancy up
Falling capital value
Businesses closing, unemployment rate stilling climbing.
Who in their right mind would think property investing is a good idea? The days of doubling the value of the house are well and truly over. Take that incentive away and spruiking is a lame duck.
Residential property is a great investment - the issue is NZ.
Not long after the Covid stimulus hit, Auckland and Sydney property prices were within touching distance. Fast forward to late 2025 and Sydney is nearly 2x Auckland, currency adjusted.
So, it's not residential property - it's a growth and competence story. Our politicians and leaders are lower quartile, the dregs unable to get out. We are insular, myopic, no risk appetite and stripped of talent who have fled the country. I hear provincial towns like Timaru and Oamaru have been gutted, boarded up husks of their former vibrant selves.
I hear provincial towns like Timaru and Oamaru have been gutted, boarded up husks of their former vibrant selves.
Both cities have great commercial and cultural histories in their respective right. Oamaru is highly underrated for its heritage.
There was a ZB talkback discussion recently (I listen when I'm on a long drive so don't shoot me) where a caller said one, or both, had a huge number of shops boarded up. Also, a new supermarket that specialises in produce near the best by date??
These towns were built on meat works and they have mostly closed.
had a huge number of shops boarded up
This is most small to medium sized town centres in NZ. People would rather go to a mega center with big box retailers 5 mins out of town than pay for parking to trawl past vape shops and stores catering for boomers.
What shops cater to boomers? Very few boomers are dumb enough to vape...
The shops are boarded up because there is virtually no discretionary income anymore. Very few were buying their 85 inch plasma from provincial high streets.
What shops cater to boomers?
In small towns? Independent retailers. Oh, and banks, the post office, basically anything boomers don't like doing online.
The shops are boarded up because there is virtually no discretionary income anymore. Very few were buying their 85 inch plasma from provincial high streets.
I live in a small town and travel through many others. It's almost a universal phenomenon that the old town centres are dying and this is being supplanted by big box retailers out of town, or online purchasing.
Or just listen to talk back for your world views.
When did I say I listen to talk back radio for my world views? I spend >50% of the year out of the country, I actually do have an idea what happens abroad and can compare that to what I see at home with a degree of accuracy few have.
Banks were pulling out of provincial towns years ago.
When did I say I listen to talk back radio for my world views?
About 4 posts up.
I spend >50% of the year out of the country, I actually do have an idea what happens abroad and can compare that to what I see at home with a degree of accuracy few have.
I fluctuate between 25-50%. Although sometimes I'm gone for a year or two.
I see the same problems playing themselves out across most developed nations. Which you'd have to expect, because they're all running the same fundamental model.
With so much of the world coming ahead over the past half century or so, those in the first world are going to suffer a decline in relevance/relative prosperity.
Investment should be about yield not speculation. Price and owner greed in the current economy is the problem. Every future taxpayer that has left will highlight this as a major reason for departure.
Bring in the universal land tax to stop speculation. Reduce income tax to stop punishing working.
Investment should be about yield not speculation
Investment is about trying to end up with more than you started with.
And speculating on the future should really factor into investment decision making. Otherwise you'd invest in Kodak in the late 90s due to solid regular business and profits, only to have digital photography shunt it to zero a decade later.
Otherwise you'd invest in Kodak in the late 90s due to solid regular business and profits, only to have digital photography shunt it to zero a decade later.
Over the past 12 months Kodak's share price up 34%. That's far better than the NZX index and the Aotearoa Ponzi over the same time period. NZX Index up only 7% over past 5 years.
Yeah but you omitted that it's lost 90% of it's value over 30 years, and it's primary historical reason for being doesn't really exist anymore.
Conversely of course, 87.8% of resales in Q3 this year were made at a profit for their vendors
Congrats 🍾🎉
Hey Greg, can you factor in inflation, selling costs and tax please? Be good to know what % made an actual real profit...
If you factor in the rent they were paid (or rent they didn’t have to pay for homeowners), I suspect most made a profit. But over the last 4 or so years the profit has been terrible compared to almost any other investment.
Reasons why I think the NZ Ponzi is over. I’m not talking an absolutes here. Just the general theme.
- There are so many more sexier and convenient options to invest in from your phone. Sharsies, crypto, gold/silver.
- Having someone live in your investment is full of snakes and ladders. The tenants have way more rights these days and their attitude towards landlords isn’t full of respect in generations prior.
- The stigma attached with being a landlord. Many look at landlords like a leech extracting life out of the economy, making themselves rich on the backs of the poor.
- Our plummeting birth rates. Our best and brightest leaving for better opportunities being replaced by third world migrants. The top 3 out of 5 surnames over the last 5 years have been Indian surnames. I’m not saying Indians can’t be successful, they may not be willing to participate in the ponzi and have different ideals.
The ones holding on to this “just being part of the cycle” are either 50+ and thinking the good old days are just around the corner and don’t think very deeply about what have been the factors surrounding this incredible run property has had, and the naive who bought at the wrong time.
Just waiting for things to
Be back on track….
Green shoots....
'Tis a bad season for the hopium crop
So if there is no money in property anymore where does that leave NZ and our economy?
Anyone got any better ideas than property investment?
There's plenty of New Zealand companies out there crying out for investment capital, for a start.
That doesn't necessarily mean that they're a good investment.
Of course. But in aggregate, the country will be much richer if we prioritise productive investment over endlessly chucking money into residential property.
You may have to do some due diligence, but least you don't have to talk to any real estate agents while you do so.
But all the real estate agents are jumping ship to business broking!
Being highly productive in your labour employed job. Paying off your mortgage so that we collectively reduce our private debt vs gdp figure (which is incredibly bad and unless resolved will prevent the country from ever experiencing future growth/prosperity).
ie avoiding debt speculation and paying down existing debts.
ie living sensibly and within ones means.
ie not what we've done the past 20 -30 years.
That would be a great start.
So if there is no money in property anymore where does that leave NZ and our economy?
The amount of financial contraction we've had with high interest rates and flat or negative values has only been fairly minimal, so it's safe to say the vast majority of our economy isn't running on property.
Just you know, the part where we slosh money around to think we're wealthier than we are.
"The amount of financial contraction we've had with high interest rates and flat or negative values has only been fairly minimal, so it's safe to say the vast majority of our economy isn't running on property."
You may wish to factor in time to that equation....if there is no alternative source of credit then over time the economy will continue to decline (unless of course the state determines to invest and create those funds)
There is an alternative source of credit. It's just not as cheap.
What alternative would that be?
Credit at higher interest.
Is already available but not subscribed to the required level and carries a higher risk of default. You may also point to ag or business credit but those dont (currently or recent historical) provide the levels required either.
Claiming minimal damage when real house prices are still falling is a bit premature. Like checking the beach at the low tide mark on a king tide day and saying it hasn’t eroded much.
The slosh of property wealth is still evaporating and it’s forcing a much needed rethink.
And let’s be real an OCR in the fives wasn’t high
Claiming minimal damage when real house prices are still falling is a bit premature
However you want to slice it, it appears property only makes up a small component of our overall economy. Low sales volumes, lower sales prices, and it's not like the country fell over. People are just complaining we're not getting continually wealthier like it should be a guarantee.
No slicing is required to view real house prices, just click the link.
Again let’s be real Pa1nter. You’re completely underplaying the property market’s tentacles on the economy by only mentioning sales, and you know this.
Its very interesting that most property crashes, as we have, take 6 years on average, to bottom out.....
So more crash to enjoy in NZ, in 2026 and 2027.
Again let’s be real Pa1nter. You’re completely underplaying the property market’s tentacles on the economy by only mentioning sales, and you know this.
If the oft repeated reckon is this is an economy centred on the property market, the effect on unemployment and overall economic activity doesn't match with that assertion.
This is because property takes up more peoples' attention than anything else.
property only makes up a small component of our overall economy
Actually, you made the claim that housing is only a small component of our overall economy. Can you quantify it?
Unemployment is still climbing, while also muted by the exodus of kiwis bailing overseas. The broader economic fallout does actually match a house heavy economy. The OCR is being slashed deeper than forecasted to try and get things going again..
Actually, you made the claim that housing is only a small component of our overall economy. Can you quantify it?
That's what we're doing by determining how big the ramifications from a housing downturn are. Or we can just look at stats of what our economy is comprised of.
The broader economic fallout does actually match a house heavy economy.
Or say, one that had a couple of years of over stimulation to combat a global medical event.
Or we can just look at stats of what our economy is comprised of.
Statistics usually help. In this case though, they won’t save real house prices from falling further.
Or say, one that had a couple of years of over stimulation to combat a global medical event.
You can click on the link again to see where that stimulus flowed into
COVID 2020, the biggest wealth transfer in history.
15% of gdp is actually not small.
A capital loss..... How will the generations of Lords of the land exploit their tenants. How will they afford trips overseas every year. Oh the humanity
Negative leverage coming to a town near you.
That comment smells of cynicism, anger, envy and desperation.
How dare you take this away from him.
This is the big one, as it has been foreseen.
Rubbish.
It's just a point of view that differs to yours. To paraphrase Lange..." you can smell the over leverage on your breath".
That comment "also" smells of cynicism, anger, envy and desperation.
You can smell text on a screen? Perhaps they served you the wrong mushrooms for brunch.
In conclusion, if you want to make money in property, play a long game (10+ years). Short-term gains are rare nowadays. Short-term pain seems to be the general theme with this market.
I agree - property is currently a long term game and unfortunately many posters on this site overlook that. We are not in a period for flippers.
I also agree, there is currently not the yield for the traditional mum and dad investor. . Those investors getting a good yield are prepared to look at properties where they can put an additional 80m2 1-2 bedroom home or subdivide and move on a larger home. They are taking advantage of more relaxed planning rules; the traditional mum and dad investor holding one or two properties is likely to be a thing of the past for some time.
Yes, especially if a capital gains tax is introduced. I do worry about future housing supply if a CGT gets the green light.
The long term gain requires population growth. That is no longer guaranteed like it was in the past.
And plenty of good paying jobs which is looking less and less likely.
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