Chancesare your home has made a profit in the last few years. But how much more will you add to your home if you renovate or rebuild? Property reporter Zoe Hunter unravels CoreLogic's latest Pain and Gain report.
A home in Ōtūmoetai that made nearly $2 million at resale topped CoreLogic's latest Pain and Gain report for the biggest profit made.
The Ngatai Rd home was originally bought for $720,000 about four years ago and sold in August this year for $2.7m.
It was one of the city's top five properties that made the biggest gain at resale in the last quarter.
"It was 100 per cent demolished as if they had bought a new section and completely rebuilt brand new," he said. "It is an incredible home with epic views to the Mount."
Tauranga residents who sold their home in the third quarter of 2019 made a median profit of $252,000 per property. The city's gross profit from sales between July 1, and September 30 was $117,856,567.
The median for Tauranga properties sold at a loss was $30,000, with a gross loss of $968,688.
Properties in the city that resold for a gross profit in the June quarter were held for a median 6.5 years, while houses resold at a loss were owned for a median 2.7 years.
CoreLogic senior research analyst Kelvin Davidson. Photo / File
CoreLogic senior research analyst Kelvin Davidson said generally when people made a profit at resale the money made goes straight into their next purchase.
Davidson said the holding period also played a big part in how much profit was made at resale.
"If you hold a property for a period of time you are guaranteed to sell it above the purchase price," he said. "Rising house prices create profits."
Tremains Bay of Plenty and Waikato general manager Anton Jones. Photo / File
Tremains Bay of Plenty and Waikato general manager Anton Jones said properties in the Mount had increased in value in the last few years.
"Pitau Rd is very popular and has seen some substantial gains," he said.
There was a lot of people adding extensions and refurbishing their homes in that area, he said.
However, he said the gains would not be as big in the next few years as the market changes again.
Simon Anderson, chief executive of Realty Group which operates Eves and Bayleys. Photo / File
Simon Anderson, chief executive of Realty Group which operates Eves and Bayleys, said renovations and time played a part in resale profits.
Anderson said the properties that made the biggest gains in the last quarter were in established areas that were sought after.
"There seems to be a real desire for the more established areas," he said. "Location in areas like Tauranga and the Bay of Plenty always come through at the end of the day."
Tauranga Harcourts managing director Simon Martin. Photo / File
Tauranga Harcourts managing director Simon Martin said there was a lot of costs involved when renovating or rebuilding a home.
"You have the capital gains as time goes on, especially in those areas where there is no land and the only movement is going to be in the prices going up," he said.
"Add to that value that has been added to the property through renovations and new builds."
Profits
Top five biggest profits
141 Ngatai Road, Ōtūmoetai Sold: 12 August 2019 Sale price: $2,715,000 Previous price: $720,000 Price difference: $1,995,000 Years held: 4.4
141 Ngatai Rd.
56b Campbell Rd, Mount Maunganui Sold: 6 July 2019 Sale price: $1,975,000 Previous price: $525,000 Price difference: $1,450,000 Years held: 6.3
6 Freeburn Rd, Pyes Pa Sold: 13 July 2019 Sale price: $1,500,000 Previous price: $350,000 Price difference: $1,150,000 Years held: 7.7
6 Freeburn Rd, Pyes Pa.
27 Seaway Terrace, Ōtūmoetai Sold: 9 August 2019 Sale price: $1,140,000 Previous price: $80,000 Price difference: $1,060,000 Years held: 34.8
27 Seaway Terrace.
52 Pitau Road, Mount Maunganui Sold: 14 July 2019 Sale price: $1,490,000 Previous price: $445,000 Price difference: $1,045,000 Years held: 16.3
