Photo: RNZ / Marika Khabazi
Rising interest rates and the cooling housing market are beginning to bite for homeowners looking to sell, as more houses are sold at a loss.
Property research company CoreLogic's latest pain and gain report shows 4 percent of property sold in the final three months of last year went for less than the original price paid.
It compares to just over 3 percent for the third quarter of 2022.
CoreLogic chief property economist Kelvin Davidson said most of the properties sold at a loss were bought and sold within 19 months on average, which indicated rising interest rates had begun to hurt.
"A change in an owner's financial situation could be behind a short hold period - and at the moment, rising interest rates would be a clear candidate for driving some of these sales," he said.
Other factors such as divorce or death could also drive unexpectedly short hold periods, Davidson said.
The trend was most visible in Auckland, with nearly 7 percent of those who resold their homes in the fourth quarter doing so at a loss.
Despite the rise in loss making sales, Davidson said most people continued to make money from sales. Owner-occupiers' median profit was $313,000, compared to $343,500 for investors.
The combined median resale gain of $328,000 was down from the peak of $441,000 in the fourth quarter of 2021.
However, Davidson said any gains would be quickly eroded - given the high prices for houses - unless owner-occupiers were looking to move somewhere cheaper or downsizing.
Looking ahead, he said it remained a buyers market.
"The housing market still faces significant challenges, especially with unemployment set to rise this year, and as new and existing borrowers face up to the possibility of mortgage rates up to 7 percent."
