Buyers gain pricing power
The resale performance of residential real estate has slightly deteriorated through the first quarter of 2024, according to CoreLogic.
CoreLogic’s latest Pain & Gain report revealed that the proportion of properties resold for more than their original purchase price dropped to 92.9% in Q1 2024 from 93.5% in Q4 2023.
The median gain decreased to $302,500 from $315,000, while the median resale loss increased to $50,000 from $46,000.
Market factors impacting resale performance
Kelvin Davidson (pictured above), chief property economist at CoreLogic, attributed the softening resale performance to broader market trends.
“We’ve seen flattening property values since the end of 2023, as a result of stretched affordability, high mortgage rates, and the rise in available listings on the market,” Davidson said. “These factors are all working together to swing the market back around for buyers.”
Despite the decline, he noted that the proportion of profitable resales remains high.
“The share of properties being resold for a gain is still reasonably high at more than nine in 10, and resale profits have been hovering around the $300,000 mark since Q2 last year,” Davidson said.
Resales across regions
Davidson described the performance across main centres as mixed.
Tauranga ($417,000), Wellington ($405,000), and Auckland ($388,000) recorded the largest gains in Q1 2024. Conversely, resale property pain was highest in Auckland, with 10.5% of resales below the original purchase price, up from 9.2% in Q4 2023.
Hamilton, Wellington, and Christchurch also saw increases in loss-making resales, while Tauranga and Dunedin showed improvements.
Median hold period
In Q1 2024, the median hold period for profitable resales reached a new record of 8.8 years, surpassing the previous record of 8.6 years in Q4 2023.
“In a softer market, it’s no major surprise that people need to hold longer for those gains to accumulate,” Davidson said.
Wellington had the longest hold period for resale gains at 10.9 years, followed by Dunedin, Christchurch, and Auckland at 9.3 years each.
Outlook for sellers
Davidson highlighted a less positive outlook for sellers due to ongoing affordability pressures and high mortgage rates.
“Looking ahead, we expect an underwhelming upturn for sales volumes and house prices in 2024,” he said. "In that environment, and with available listings on the market quite high, the outlook is arguably better news for buyers, but less positive for sellers.”
Click here to read the CoreLogic media release and access the Pain & Gain report.
You can also compare the latest results with the figures from the previous quarter.
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