Cotality’s latest Pain and Gain Report shows across the country 12.2% of resales were at a loss, the highest level since mid-2013 as as a soft market, long hold periods, and firm buyer expectations continue to shape seller outcomes.
The numbers were also up from just 0.7% of resale losses in the fourth quarter of 2021 – the height of the last property boom.
The median loss was $50,000 and in Wellington 15.8% of properties made a loss, in Hamilton it was 15.5%, Tauranga 10.8%, Dunedin 10% and Christchurch, just 5.5%.
While gains remain substantial for 87.8% of resales, at a median of $270,000, apartments and major centres, such as Auckland and Welington have the highest loss rates, with Queenstown
Lakes continuing to outperform
That gain was down from the late-2021 peak of $440,000 but still higher than anything recorded before late 2020.
The figures are consistent with property values still being down significantly from their peak in many areas, as well as buyers holding most of the pricing power.
Rather than a slump, it has been a gradual drift downwards for resales since early 2022,” Kelvin Davidson, Cotality chief property economist says.
Nearly nine in every 10 sellers still achieved a gain in the three months to September, with the size of those gains remaining substantial even though they are now at a five-year low.
When viewed against the median hold period for gains of 9.5 years, the effective annual return equates to about $28,400.
Davidson says that context is important. “The resale performance of property is not weak in an absolute sense, but the figures highlight the role of time in the market. Longer ownership provides a much greater likelihood of securing a capital gain.”
It remains one of the clearest indicators of whether it will sell for a profit or a loss, he says. The median hold of 9.5 years is the longest in the series dating back to the mid-1990s. For a loss, it was 3.7 years.
The timing of a purchase and the length of ownership were crucial. “Three-and-a-bit years ago places a buyer at a point in the cycle when prices were extremely high and mortgage rates were already rising. Anyone who bought then and has since faced a change in circumstances is more exposed to selling at a lower price than expected.”
Houses outperform apartments
Standalone houses continued to outperform apartments in the third quarter, although both property types softened.
House resales had an 11.4% loss rate, up from 9.8% in the second quarter and the highest level since mid-2013.
About 36.2% of apartment resales were made at a loss, up from 34.5% in the second quarter and the highest level since early 2012. Only about 64% of apartment resales achieved a gross profit.
Davidson says the performance gap reflects long-run market behaviour rather than signs of distress.
“Apartments tend to record smaller long-term capital gains than standalone houses, so they carry a higher chance of a loss if resold into a weaker market. That’s normal for this part of the market and there’s no evidence of widespread fire-sale behaviour.”
Auckland and Wellington remain the softest of the main centres
Both Auckland and Wellington went through strong growth during the boom period, so more recent buyers paid top prices and are now more vulnerable.
Auckland’s larger pool of apartments also contributes to its higher loss rate, although that reflects long-run performance rather than short-term weakness,” Davidson says.
Median resale gains in dollar terms remained varied. Tauranga recorded the largest nominal gain among the main centres at $352,000, followed by Auckland ($338,000) and Wellington ($330,000).
Christchurch remained the most resilient of the major centres in relative terms, with 5.5% of resales made at a loss in the three months to September, albeit a smaller median gain ($265,000) than some other areas.
Regional insights
Markets outside the main centres continued to show mixed results, with solid resale dollar figures and a reduction in the proportion of resale losses across some North and South Island markets.
Queenstown Lakes remains the standout, with only 2.4% of resales made at a loss in the third quarter and a median gain of $486,000. “Queenstown has limited supply and deep demand, which helps preserve values even when activity slows.”
Invercargill also strengthened, recording 2.6% loss-making resales, down from 3.9% in the second quarter. Davidson says it benefits from its affordability appeal and therefore steady buyer interest, giving it a level of resilience not seen everywhere.
Nelson showed the weakest performance among the key South Island markets, with loss-making resales rising from 8.5% in the second quarter to 14.1% in the third quarter.
Pain won’t immediately disappear
The share of loss-making resales is expected to remain elevated in the near term, given the subdued market backdrop with outcomes to hinge on values, household sentiment and the volume of stock for sale.
“Even if sales activity improves, values remain well below their peak and listings are still high by past standards,” Davidson says.
“Vendors may need to meet the market, but gains will remain substantial for those who have held for a long period. Most owner-occupiers won’t see a cash windfall, as equity generally rolls straight into the next purchase unless they’re downsizing or moving to a cheaper location.”
“Property resellers may fare better in 2026, although a rapid turnaround looks unlikely.”
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