New Zealand Pain & Gain Report October 2017 | 5 © Copyright 2017. CoreLogic NZ Limited (CoreLogic) and its licensors are the sole and exclusive owners of all rights, title and interest (including intellectual property rights) subsisting in this publication including any data, analytics, statistics and other information. All rights reserved. Nationwide, properties that sold at a loss in the June quarter had been owned for a median of 6.7 years down, from 8.0 years for the prior quarter. This means there is a larger share of shorter-term loss-making sales in Q2 and may indicate people who most recently bought at high prices are selling to avoid potential further losses. This could be a sign of market fatigue – i.e. the growth has been so exceptional that the recent slowdown weighs on buyers minds who don’t think that gains can be continued. The hold period for properties sold at a gain hardly changed over the last two quarters – from 8.1 in Q1 to 8.0 in Q2. This is typical of the last few years and probably reflects the normal hold period for people moving onto their next home. Auckland hold period is lower in general (6.5 years), but this doesn’t affect gains given exceptional growth in Auckland. The median hold period for those Auckland sales realising a loss has dropped to only 1 year (from 2.3 years in Q1 2017), as it has in Hamilton too. This means half of all properties that sold at a loss in these cities in Q2 2017 were held for less than 1 year and again reflects the fact that values have slowed down or dropped in some places, which may have affected those buyers who bought, expecting capital gain. Once gains weren’t realised, coupled with mortgage interest rates increasing over the same period, owners may have chosen to sell out, rather than risk holding on and potentially experiencing further loss. It is worth noting that the sample size in Hamilton is very low so the measure can be very volatile (less than 20 properties per quarter for the last six quarters). Median Hold Period Pain Gain New Zealand 6.7 8.0 Auckland 1.0 6.5 Hamilton 1.0 7.5 Tauranga 4.1 7.7 Wellington 8.1 9.1 Rest of NI 9.0 8.5 Christchurch 3.6 10.4 Dunedin 4.7 7.2 Rest of SI 6.6 7.6 Median Hold Period