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Luxury property in New Zealand taking a pounding

The upmarket Auckland suburb of Remuera is among those with the steepest price falls. The figures show it is almost at the bottom of 41 suburbs ranked according to how far their average sale prices have in May compared with the same month in 2007.

Remuera has seen a price fall of almost 20% and the only area to fare worse is Central Auckland where the median price plummeted more than 27%.

Other locations with a large price fall include Levin, down 18.18%, Onehunga in Auckland, sown 14.19% and Manurewa in Manukau, down 12.83%.

The Nelson suburb of Stoke has, however, proved to be the exception with property prices rising 3.66%. It has always been a popular location because of its climate, schools and relatively affordable properties.

Pukekohe also saw price growth with values up 1.51% with Wellington Central also making a slight gain and Papakura staying static.

Developers of new luxury property are also reporting a steep drop in prices. Cornerstone Group has reduced the price on its luxury Sentinel apartments in Takapuna. The penthouse in the 30 storey block has been reduced by almost $500,000 and other apartments are down by $180,000.

However, some are hopeful that the non luxury apartment property sector could be the first to recover. According to Kellands Real Estate agent Blair Watson sales have increased in the past few months as more first-home buyers choose to invest in sky-high homes.

'As soon as people realise it's a fair market, and they get good value for their money, places like this are flying out the door,' he said.

'Apartments in the $500,000 and under market are going extremely well. First-home buyers have their deposits and they're ready to go,' he added.