Park ’n rise: $4m for sellers after 30 years

Pair among sellers cashing in on years of red-hot price rises

An Auckland couple pocketing almost $4 million in gross profits from the sale of their Remuera mansion are among thousands to win big on the housing market recently.

House sellers typically collected a record $213,000 profit on the resale of individual homes during 2019’s last three months, the latest Pain and Gain report by analysts CoreLogic found.

None did better than the owners of a four-bedroom Stirling St home, which made a $3.9m gain over three decades.

They paid $200,000 for the property in 1988 and sold for $4.1m in November — but also appear to have spent money building and renovating on the site — CoreLogic said.

Housing had been so profitable over the last three and a half years that at least 95 per cent of people who sold made gross profits, CoreLogic senior property economist Kelvin Davidson said.

“Such a long period of strength has only been seen on one other occasion in the past 20-25 years, from 2004 to 2007,” he said.

The windfalls were driven by a decade of skyrocketing house prices that almost guaranteed a gross profit for anyone who bought a property and held on to it for five to seven years, Davidson said.

And the gains seem likely to only keep growing.

While Auckland house prices had been in a slump early last year, they were now racing back towards record highs with Westpac chief economist Dominick Stephens tipping annual house price growth to hit 10 per cent by mid-year.

OneRoof editor Owen Vaughan said homes were selling $1m above council valuations in some cases.

“That’s quite a reversal of fortune for the city’s housing market: last winter vendors were worried their homes would sell under CV,” he said.

Among the houses to sell for the biggest gains, all had been held for more than 15 years.

The second biggest gain after the Stirling St home was by a Herne Bay mansion on Curran St and a St Heliers home on Brilliant St.

Both homes sold for a $3.7m gross profit after their owners had held on to them for 30 years and 18 years, respectively.

The biggest disaster on paper was a home on Patui Ave in the ThamesCoromandel District that sold for a $395,000 loss after being owned by the same person for 14 years.

Another home, on West End Rd in Herne Bay, sold for a $392,000 loss just over a year after being bought.

Yet losses remained the exceptions. In Auckland during the final three months of 2019, sellers reaped a total profit from resales of $1.3 billion compared to $17m in losses.

Nationally, profits totalled $3.7b compared to $34m in losses.

Apartments were riskier investments than houses. Eleven per cent of apartments across the country sold for losses compared to just 3.8 per cent of houses.

They also fared worse in crises with up to 50 per cent of apartments selling for losses in the years straight after the Global Financial Crisis.

Are you sitting on a gold mine? Find out in the OneRoof Property report in Monday's Herald