Safe as houses: big profits despite fewer sales

Queenstown is one area that has experienced no property sale losses in the past two quarters. Photo / Mark Mitchell

Property owners popped $640m in the bank from sales over a three month period despite a cooling market with fewer sold.

The new data from CoreLogic from the last quarter of 2017 showed there was still healthy profit to be made from property.

The company's Pain and Gain report shows Aucklanders snapped up the largest gains in the country with a median profit of $370,000 per sale.

This was up from $360,000 in the previous quarter.

Nick Goodall from CoreLogic said the number of properties sold at a loss also continued to fall.

"Capital gains have slowed down dramatically but those that are selling are pocketing pretty hefty wads of cash," he said.

"It's not surprising because we have had such great growth."

Other parts of the country enjoyed property gains - although not as large as those pocketed by Auckland sellers.

The median gains made per sale were $206,500 in Hamilton,$227,500 in Tauranga, $200,500 in Wellingon and $135,000 in Christchurch.

The third quarter of 2017 saw an increase in the number of properties sold at a loss but this has dropped back again.

Goodall said the data showed New Zealand was at "a historical low" for properties selling at a loss. Queenstown was the only area that had no recorded losses with profits jumping from $339,000 to $357,000 in the final quarter.

"It is the second quarter in a row that there's been no property bought and then sold at a loss in Queenstown," Goodall said.

"That is exceptional growth."

Owner occupiers took a bigger slice of the pie than investors with owner occupiers taking 330m nationally and investors pulling in $223m.

There were fewer sales in the last quarter of 2017 but millions were still made. Photo / Richard Robinson

This was more due to the fact there were more owner occupier sales in that quarter said Goodall.

The data also revealed apartments were still a bigger risk than houses with 10 percent of apartments nationwide selling at a loss, compared to 4 percent of houses.

Property type played a greater role in determining profits or losses in the final four months of the year compared to the previous quarter.

"Apartments are still behaving quite differently than houses and proving that expectation that apartments can be a bit more of a risk," Goodall said.

"You can pay over the odds and then have to sell at a loss."

Goodall said any market fatique that had set in was concentrated in the apartment segment.

New Zealand's largest real estate agency Barfoot and Thompson said this month house prices in Auckland had "rebounded" from the holiday period slump.

Managing director Peter Thompson said March had seen the highest number of residential property sales in the super city in the past year.

Meanwhile, despite the cooling off of house prices in most parts of the country home affordability is stretching further out of reach in a few regions, a report has found.

Northland, Hawke's Bay and Central Otago have seen house prices rise over the summer quarter according to the latest Massey University Home Affordability Report.

House prices in Northland increased by $25,000, Hawke's Bay $29,950 and Central Otago $53,500.

Prices in the Central Otago Lakes region have soared with the average now 15 times the average annual wage, compared to Auckland where that ratio is 13.1 times.

Report author associate professor Graham Squires said the mixed results across New Zealand meant it was too early to say if declining affordability was long term.

"While the situation is changing from quarter to quarter, it is clear that New Zealand home affordability is still a national and regional problem in the short and medium term."

The latest QV House Price Index data shows values rose just 1 per cent on average across the Auckland region in the year to February.

Andrea Rush of QV said prices were still high and out of reach for many "but there are now a number of suburbs where values have dropped back and have homes for sale under the $500,000 range."