Buyers take control

Turbulence has again hit the property market, this time shifting in the favour of buyers.

Residential real estate resale performance has deteriorated in the first quarter of 2024, according to CoreLogic’s latest Pain & Gain report. Stretched affordability and high mortgage rates are the likely cause, the report says, as increased house listings put pricing power into the buyers’ hands.

CoreLogic reported that the proportion of properties resold for over the original purchase price in quarter one dropped to 92.9% from 93.5% in quarter three last year. Further, the median gain dropped from $315,000 to $302,500, and the median resale loss jumped from $46,000 in quarter four of last year, to $50,000.

Chief Property Economist Kelvin Davidson cited many contributing factors to the shift. “We’ve seen flattening property values since the end of 2023, as a result of stretched affordability (and low gross yields), high mortgage rates, and the rise in available listings on the market. These factors are all working together to swing the market back around for buyers,” Davidson said.

He says that although the market is swinging around, sellers are still profiting from properties resold. Christchurch, alongside Hamilton and Dunedin, delivered resale profits in the $275,000-$300,000 range.

“Of course, hold period plays a key role here. Anybody who has owned for the typical seven to eight years will almost inevitably sell for a gross profit. It’s also important to point out, though, that this isn’t always a cash windfall. Many owner-occupiers will simply be recycling the new equity into their next purchase,” he adds.

To read the full report, visit the link: www.corelogic.co.nz/news-research/reports/pain-and-gain-report.