Market recovery signs emerge
New Zealand’s property market is hinting at a recovery, with resellers beginning to experience a slight improvement after a lengthy downturn.
CoreLogic NZ’s latest Pain & Gain report for the fourth quarter of 2024 revealed that 91% of properties resold during this period fetched more than their original purchase price, a slight increase from 90.1% in the third quarter.
This level of profit-making sales remains significantly lower than the highs experienced during the post-COVID boom, where over 99% of properties sold for a gain. This indicates that while the market is not yet booming, it is showing early signs of stabilisation.
These findings align with the latest release of the CoreLogic Home Value Index (HVI), which also pointed to signs of market stabilisation. The HVI reported a marginal decrease of 0.1% in January, continuing a five-month trend that may indicate the market is approaching a potential recovery phase.
Seller dynamics
Gradual gains for resellers
“While profits are down from the peak, most property resellers continue to see gains,” said Kelvin Davidson (pictured above), CoreLogic NZ’s chief property economist. “The latest increase in the frequency of resale profits supports other indicators that the market may have found a floor, largely due to recent mortgage rate falls.”
Challenges remain despite improvements
Davidson also noted that despite the uptick, the overall market conditions are still challenging.
Property values are approximately 18% below their peaks, and an excess of listings is keeping buyers in a favourable position, maintaining subdued selling conditions.
Financial insights and buyer behaviour
Growth in profit margins
In Q4 2024, the average gain on resold properties increased to $289,500, up from $279,000 in the previous quarter, though still well below the late 2021 peak of $440,000. Meanwhile, the median resale loss held steady at $55,000, consistent with the range seen over the past two years.
The importance of holding periods
Davidson, who recently noted the favourable conditions for first-home buyers in 2025, stressed the importance of holding periods, revealing that profitable properties in Q4 2024 were typically held for a median of nine years, up from 8.6 years in the prior quarter.
This suggests sellers are waiting longer, possibly due to cautious market sentiments.
Cautious optimism for the future
Looking ahead, Davidson anticipates that lower mortgage rates may slightly boost house prices in 2025, which could improve conditions for resellers.
However, the CoreLogic economist warned, “But any turning point for house prices won’t be sudden or strong, and lingering weakness in the labour market alongside an abundance of listings should mean finance-approved buyers continue to see good opportunities.”
For further details, read the full Pain & Gain Report.
