"Weaker, but not weak" – property resellers are still turning reasonable profits despite market softness
Around nine out of 10 residential property resales in New Zealand turned a profit in the first quarter of 2025, according to the latest Pain and Gain report from Cotality (formerly CoreLogic). While that figure is slightly down from the previous quarter (91.1% to 90.8%), the data suggests the property market is continuing to stabilise.
Chief property economist for Cotality NZ Kelvin Davidson noted that house prices are still sitting 16% below their early 2022 peak. While prices are slowly coming back up, Davidson said we’re not likely to see a pandemic-era style boom anytime soon.
“The expectation for the wider housing market is that we’re starting to see a little growth coming through, particularly off the back of lower interest rates,” Davidson told NZ Adviser.
“As house prices slowly turn around, we anticipate that the resale performance of property will also pick up slightly - though not necessarily quickly.”
Profit still the norm, though short-term resales are risky
The report showed that although resale profitability has dipped from the COVID-fuelled boom – when over 99% of resales were in the black - the current rate is still strong by historical standards. Median profits sat at $280,000 in Q1, down slightly from $298,000 in Q4 2024, but well above pre-2020 figures.
In contrast, the median loss for those who sold below their purchase price was $50,000, down slightly from $55,000 the previous quarter. Resellers who held their properties for longer reaped the greatest rewards, with the median hold period for profit-making sales sitting at 9.1 years.
Davidson said that longer hold periods are key to profitability, as resellers who brought at peak prices 2-3 years ago will inevitably have made a loss. This is particularly the case in Auckland, where 14.2% of resales made in Q1 2025 were for less than what was originally paid, and the median hold period for gain was 10.1 years.
“In past cycles, we’ve seen 20-30% of sales made for a loss,” he said.
“Prices in Auckland are still relatively low compared to their peak, and it’s not unexpected that resellers are getting less than what they paid, particularly if they had a short hold period. If you’ve held for 8-10 years and ridden out those few cycles, you’re much more likely to have made a profit.”
Despite lower hold periods yielding losses, Auckland still continued to deliver high median gains at $356,000, with Tauranga ($362,500) and Wellington ($339,500) also performing strongly. Davidson said that the market is far from weak, even if we don’t see a sharp rebound.
“The fact is that most resales do still make a profit – over 90%,” he said.
“The profit is also still quite significant, the median for Q1 is $280,000. It’s not the case that resellers are really battling – I call it ‘weaker, but not weak.’ We’ve seen interest rates falling as signs that the labour market might have bottomed out and unemployment has peaked, so we may see more confidence coming through and house prices lifting a bit.”
Investors holding steady, opportunities for FHBs
Despite speculation about investor pullback, the report suggests relative stability. Investor resales made at a loss dropped slightly to 9.5%, while median profits reached $292,000 - higher than the $275,000 recorded by owner-occupiers.
There’s no indication of a mass investor exodus or forced sales. Instead, lower mortgage rates appear to be supporting cashflow and investor sentiment, helping to avoid panic buying.
An ongoing balancing act is likely to define the year ahead. With listings still high and lending restrictions like LVRs and DTIs still in place, price growth is expected to remain modest. Additionally, slow-growing house prices and lowering interest rates will inevitably be good news for the first-home buyer segment.
“In the housing market, there are always two sides to it,” Davidson said.
“A strengthening position for sellers simply means a weakening position for buyers. We’ll see the market pick up, but without a boom as there are still restraints.”
“There is a growing view that price growth may not be as strong as what we’ve seen in the past,” he said. “The government is pushing really hard on land supply and housing supply up, and interest rates won’t keep falling.
“Conditions are in place for a slow and steady uplift in values, which should continue to support profitability for resellers over the remainder of 2025.”
