$4m resale gain on Remuera mansion among Auckland's biggest property winners

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.

The Stirling St, Remuera, property which rose in value by millions over three decades. Photo/ Jason Oxenham

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 it 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 past 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 onto it for 5 to 7 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 Thames-Coromandel 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 after it was bought just over one year earlier.

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

Apartments 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.

Elsewhere, just 0.8 per cent of Wellington homes sold for a loss last quarter, while 0.9 per cent of Dunedin homes sold for a loss and 10 per cent of Christchurch sellers took a hit - the worst result among main cities.

Biggest winners

The five Kiwi homes sold for the greatest gains between October and December last year, according to CoreLogic data:

• 4 Stirling St, Remuera: bought for $200,000 in 1988 and sold for $4.1m in November for a $3.9m gain.

• 40 Curran St, Herne Bay: bought for $1.1m in 1989 and sold for $4.8m in November for a $3.7m gain.

• 37 Brilliant St, St Heliers: bought for $2.3m in 2002 and sold for $6m in November for a $3.7m gain.

• 17 Grampian Rd, St Heliers: bought for $844,000 in 2003 and sold for $4.5m in October for a $3.7m gain.

• 11a Rota Place, Parnell: bought for $917,500 in 2002 and sold for $4.5m in November for a $3.6m gain.