Most homeowners are continuing to make healthy profits when they sell their houses, despite the market for resales showing further signs of weakness.

CoreLogic's pain and gain survey indicates 98.1 per cent of properties resold in the three months ended June (Q2 2022) made a gross profit or gain on the previous purchase price.

That was a one-point decline on the March quarter.

In dollar terms, the median resale gross profit fell to $370,000 from $418,000 in the March quarter and the record high of $440,000 at the end of 2021.

The median gross loss rose slightly to $40,000.

CoreLogic NZ chief property economist Kelvin Davidson says the results don't come as too much of a surprise, given the effect of recent interest rate increases and a surge in new listings have had on prices.

"We must put these figures into context and that is they're still historically strong, which reflects the fact that home owners tend to hold property for seven or eight years on average, which locks in gains even as property values weaken over the short-term," says Davidson.

"Nevertheless, the turning point has arrived and for owner occupiers this isn't typically a cash windfall unless they're downsizing or moving into a cheaper location."

Davidson says sellers often needed the entire profit, and then some, to move into their next property.

The survey indicated that the properties sold for a profit had been owned for a median of 7.6 years.

Meanwhile, loss-making re-sales were for properties that were held for a median period of 1.3 years, down from 2.1 years in the March quarter.

It was unlikely that these sales were because the owner was "stressed", given the current strength of the labour market, Davidson says.

The losses were most likely associated with a sudden change in personal circumstances, he said.

The median gross profit for a house was $366,000, while the median gross loss, which occurred in 1.5 per cent of sales, was $25,000.

Apartments sold for less profit ($196,750) and had much higher instances of being sold for a loss (12.6 percent), reflecting the volatility associated with the property class.

Across the country, extra weakness was an emerging trend in the main centres, most notably Auckland, Wellington and Hamilton, which saw the proportion of resale losses increase to 3.6 per cent, 2.6 per cent and 2.2 per cent respectively.

"Again, these are low figures, but they signal a turning point for previously very strong markets," Davidson says.

Looking ahead, one area of concern would be first home buyers who purchased towards the end of 2021, when prices were at their peak, Davidson says.

"Assuming a 20 per cent deposit was used, and no principal has been paid back, 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."

Further weakening in the resale performance data was likely to continue into 2023, given that property prices have been trending downwards, Davidson says.

"However, with unemployment still low and long-term growth expected to return at some stage, genuine forced sales remain few and far between with borrowers willing and able to ride out the downturn."

-RNZ.