By Joyce Yu
You sell something for $800,000, far more than you paid for it years ago. By any sensible measure, that’s a gain. So why does it feel like a loss?
Because at one point, briefly, it was “worth” a million.
This is anchoring: measuring every decision against a reference point that no longer exists. The peak price stops being a market observation and becomes a personal benchmark, suddenly selling at a good enough price feels like accepting a $200,000 loss that only ever existed on paper. The anchoring bias shows up everywhere in financial decision making.
Our latest case study follows David and Margaret, newly retired with a mortgage-free Auckland rental. At the 2021 peak it was worth close to a million; today it’s $800,000, and that million dollar figure is the thing they can’t let go of.
But there’s a second, quieter cost: waiting. Holding the property isn’t free. Factoring in maintenance, and it needs to grow around 4% a year to keep pace with a balanced investment portfolio. That’s the opportunity cost, a number you don’t get invoiced for, which is why it’s so easy to ignore.
None of this means selling is right. The point is to notice what’s shaping the decision before you make it.
The below case study works through the maths: the break-even, the maintenance overlay, and what each path could actually pay you in retirement.