House profits dropping and some owners in negative equity

The housing data company says residential real estate has reached a turning point and the softening in values could have plunged more than 500 first home buyers into negative equity, with mortgages larger than what their homes are now worth, assuming they had a 20% deposit and had not paid back any capital.

The report shows across the country the average profit on properties being resold is dropping. The median resale profit for a house was $366,000 and for apartments $196,750.

In terms of losses, houses had a median of $25,000 and apartments $74,000.

CoreLogic senior property economist Kelvin Davidson says, however, most home owners are still getting a price well above what they originally paid – ranging from a gross profit of more than $500,000 in Auckland and Tauranga, more than $450,000 in Wellington, about $400,000 in Hamilton, and just over $300,000 in both