Agents highlight new appetite for luxury property in New Zealand

Luxury houses at the top end of the real estate market in New Zealand are selling fast but analysts are warning that the renewed interest in multi million dollar properties does not mean a recovery.

The latest figures from the Real Estate Institute show that 166 luxury properties were sold in central Auckland in January and February, up from 130 in the same period last year.
Although this is still well below the 268 million dollar properties sold in the same two months in 2007 at the height of the property boom, it is a significant trend, according to Bayleys agent David Rainbow who specialises in luxury homes in Remuera
He said it has been the best start to a year in a long time. He sold three pieces of prime real estate worth $12 million in two days in the past month as the economy continues to bounce back from recession. One property, on Remuera’s Upland Rd, sold for $4 million on its first day on the market.
Research in Australia predicts a 10 to 15% rise in the cost of prestigious homes and some hope that the same could happen in New Zealand. But experts are cautious as Australia is widely regarded as having weathered the global economic downturn better than New Zealand.
But agents are convinced buyers are now out there. In Parnell for example, Bayleys agent Gary Wallace said sales of $4 million plus properties were thin on the ground in the past couple of years but last month he sold three properties worth $10 million in 10 days.
Agent Michael Boulgaris said he has also seen an increased interest in multi million dollar homes. He recently sold a five bedroom Georgian style mansion on Lammermoor Drive in St Heliers for $8 million, the highest price reached in Auckland’s eastern suburbs since the start of the recession.
He has also noticed an increase in international buyers, particularly the Chinese, wanting to buy million dollar homes. Returning New Zealanders are also seeking luxury properties.
But despite the agents’ optimism, analysts say an increase in top end sales would not necessarily translate to a recovery in the market as a whole. James Young, director of Auckland University’s real estate research unit, said market growth tends to be driven by first home buyers.
Quotable Value research director Jono Ingerson said sales for the top 10% of houses amounted to 10% of total sales in 2008 but fell to less than 8% last year