Almost half of houses have doubled in value since their owners bought them

More than 47 per cent of homes nationwide are now worth at least double the price their owners paid for them, new Homes.co.nz analysis reveals.

One in three properties have doubled in value since they were purchased, while one in ten properties, or 11 per cent, have tripled in value.

The nationwide trend could be seen in most of the main centres.

More than half (50.83 per cent) of Wellington properties had doubled in value, while nearly half (47.99 per cent) of Tauranga properties had.

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In Hamilton and Dunedin more than 40 per cent of properties had doubled in value, at 43.83 and 44.13 per cent respectively.

But in Auckland the figure was lower. Just 29 per cent of properties had doubled in value since purchase, while in Christchurch only 8.7 per cent of properties had.

Homes.co.nz chief data scientist Tom Lintern said the numbers were likely to be conservative as the analysis only included properties which had a sales history on homes.co.nz.

“For some areas, we only have sales histories back to the year 2000, or similar, and any property bought before this date would appear in the 'no sale available' bucket but would almost certainly have doubled in value too.”

The lower figure in Christchurch reflected the less frenzied housing market in that region, he said.

“In Auckland, although fewer properties have doubled in value, these are increasing from a much higher base meaning that Aucklanders have also generated significant equity in their homes.”

Lintern said the analysis was prompted by signs the market was finally starting to slow and could be nearing the end of the current cycle.

“We thought we’d step back and provide some context for homeowners who may be worried about the value of their property taking a dip.

“While many homeowners will know the value of their home has increased, it might come as a surprise to many just how much wealth had been generated in this way.”

Infometrics principal economist Brad Olsen said the widespread capital gains were also contributing to stronger spending levels.

Rising house prices were ensuring that households remained upbeat about the future, with their main asset having increased significantly in value, he said.

“With a third of houses having doubled in value since they were bought, there’s a strong foundation to support household confidence.

“This in turn is keeping spending levels high in the economy – a stronger economic position generally means stronger spending intentions.”

But one of the side effects of this growth in property values was that fewer properties were available for sale which added further price pressures to the market, Olsen said.

“Usually, with these levels of capital gains, more people would sell and try to realise that gain, and turn it into cash.

“But with the bright-line test extended to five years a few years back, these capital gain figures highlight the large amounts of tax people stand to owe if they do sell within the bright-line test time frame.”

People would probably want to sit on their investment until the bright-line period had passed, he said.

Homes.co.nz’s latest figures had the median price at above $1 million in Auckland and Wellington, at $1.21m and $1.14 respectively.

Tauranga and Hamilton’s median prices were now over $750,000, at $892,000 and $790,000, while Christchurch and Dunedin had median prices of $601,000 and $629,000.