More than 40% of first quarter apartment resales were sold at a loss with almost one-in-five Auckland residential sales loss making

Apartment owners and investors are the most likely to suffer a loss when selling a residential property, according to property data company Cotality's latest Pain & Gain Report.

It found 41.1% of the apartments resold in the first quarter (Q1) of this year were sold at a loss compared to their previous purchase price, while 13.7% of the properties sold by investors were loss making.

Overall, 12.2% of all the residential properties sold in Q1 were sold for less than their previous purchase price.

That figure has been increasing since late 2021 when less than 1% of residential sales were made at a loss.

The main determinant of whether a property sells at a profit or loss appears to be how long it has been owned for.

The median length of ownership for loss making properties was 4.2 years, while the median length of ownership for those that sold for more than their previous purchase price was 10 years.

The median loss of those properties that sold for less than their previous purchase price was $54,000, while the median gain for those that sold for more than their purchase price was $285,000.

Those figures do not take into account any selling expenses, with agent's fees alone averaging around $25,000, nor do they allow for any money owners have spent on improving a property prior to its sale, both of which would likely increase the overall loss or decrease the gain on a sale.

There were significant regional differences in the trends with the north/south divide that's evident in the wider property market also showing up in the Pain and Gain Report.

Almost one-in-five (19.9%) of the residential properties sold in Auckland in Q1, and 16.7% of Wellington sales were loss-making, compared to 13.1% in Hamilton, 9.6% in Tauranga, 7.9% in Dunedin and 4.7% in Christchurch.

Wellington had the highest resale loss at -$86,120, followed by Auckland -$77,000, Tauranga -$50,000, Christchurch -$32,000, Hamilton -$30,000 and Dunedin -$15,000.

The table below shows the losses and gains in each of the main centres in Q1.