4 | New Zealand Pain & Gain Report July 2017 © 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. Across New Zealand, 3.7% of all property resales over the March 2017 quarter transacted at a gross loss. This is a slight drop from the prior quarter (4.2%) and is a continuation of the longer term downward trend since 2011. This is unsurprising when you consider the growth in values that the NZ Property Market has gone through over that period - as prices increase it becomes less likely that a property will sell at a loss. We’re still not at the same low levels reached in the lead up to the previous peak of the market from 2004 to 2007, suggesting that the recent growth hasn’t been as strong and/or as widespread as that growth cycle. National Overview 1997 2002 2007 2012 2017 5% 10% 15% 20% 25% Nationally there was over $26m in realised losses over the quarter with a median value of $20k per sale. This is dwarfed by the amount gained from properties sold at a profit, which totalled $3.9b at a median gain of $167k per sale. Nationwide, properties that sold at a loss for the quarter had been owned for a median of 8.0 years compared to 8.1 years for properties sold at a gain. This similarity is somewhat surprising as we’d expect those sales experiencing loss to have happened over a shorter period, given typical growth over the long term. In Auckland, where growth has been so significant over the last four years, the hold period for resales at a gain is much longer than those at pain. Those sales where losses were experienced did so over a shorter period - only 2.4 years compared to the median for those achieving a gain at 6.9 years. Hamilton, Wellington and the Rest of the North Island are unique for having longer hold periods when realising a loss. All three were at a median hold period of roughly 9.5 years - which is when the property market previously peaked. This may indicate parts of the market, or types of properties, that have not experienced the same growth over the last few years to regain value lost through and since the Global Financial Crisis (GFC). Median Gross Loss/Profit Total Value of Loss/Profit Pain -$20,000 -$26,318,951 Gain $167,000 $3,883,923,396 Q1 2017 Q4 2016 3.7% 4.2% 6.5 5.1 7.4 9.4 9.5 6.7 9.6 2.4 6.7 7.4 10.1 9.0 9.3 8.6 7.2 6.9 REST OF SI DUNEDIN CHRISTCHURCH REST OF NI WELLINGTON TAURANGA HAMILTON AUCKLAND Pain Gain Proportion of total resales at a loss Median Hold Period