10% of Auckland Residential Properties Sold at Loss in Q4 2023, with Apartments Hit Hardest

Date Published: 8 February 2024

Key Facts

• 10% of Auckland residential properties sold in Q4 of 2023 were sold at a loss.
• The percentage of properties selling at a loss in main centres ranged from 3.5% in Christchurch to 10.0% in Auckland.
• Carterton had the highest rate of loss-making sales outside main centres at 18.2%, while Timaru had the lowest at 0.7%.
• Nationally, 6.7% of sales were made at a loss in Q4 2023, a decrease from 7.6% in the previous quarter.
• Apartments were more likely to sell at a loss than standalone houses with 25.8% versus 6.1% respectively.
• The median loss on sold apartments was $36,000, while houses recorded a higher median loss of $45,000.
• The selling price exceeded the purchase price in most sales, with a median gain of $303,000 for houses and $147,989 for apartments.
• The length of ownership greatly affected the likelihood of making a profit or loss; loss-making properties had been owned for a median time of 2.3 years compared to 8.5 years for profitable sales.

Article Summary

Contrary to the popular belief that residential property always brings profit, the report from CoreLogic reveals that 10% of properties in Auckland were sold at a loss in Q4 of 2023. Main centres had varying rates of loss-making sales, with Christchurch recording the lowest at 3.5% and Auckland the highest at 10%. Beyond these centres, Carterton had the highest percentage of loss-making sales with 18.2%, while Timaru registered the lowest at 0.7%.

Nationally, there was a slight decrease in loss-making sales (6.7%) in Q4 2023 compared to 7.6% in the third quarter. However, this is significantly higher than the market peak in Q4 2021, when only 0.7% of residential sales occured at a loss. The report further reveals that apartments were more susceptible to losses than standalone houses, with over a quarter (25.8%) of apartments selling at a loss compared to just 6.1% of houses. Yet the median loss for houses was higher ($45,000) than that for apartments ($36,000).

A key factor determining the likelihood of a sale resulting in a profit or loss was the duration of ownership. Properties sold at a loss typically had a shorter ownership period (median 2.3 years) compared to those sold for profit (median 8.5 years). This might suggest that financial hardship, possibly due to increased mortgage interest rates, led owners to sell their properties prematurely and incur losses.

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