Here’s how high-end real estate is doing in 2022
The high end of the real estate market has not escaped the downturn unscathed, but activity is steady and high-end properties continue to fetch prices over $10 million, according to new figures.
Earlier this week, two listings with record asking prices hit the market, indicating confidence in this part of the market.
A listing is a six bedroom luxury home in Queenstown in a gated community with stunning views of Lake Wakatipu. It has a price tag of $35 million and could be the most expensive currently listed in New Zealand.
Another is a five-bedroom house in the Bay of Plenty on 5.9 hectares of land, with a practice green, tennis court, infinity pool and seafront views of the port of Tauranga. The owners want “well north of $25 million”.
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Agents marketing these properties are optimistic about their sale.
Figures from the Real Estate Institute show that the proportion of sales over $5 million fell to 0.4% in September, from 0.3% in the same period last year.
The institute’s chief executive, Jen Baird, says the proportion of high-end sales continues to rise each year, with the percentage of sales in the over $5 million bracket increasing by 0.1% per year since then. 2019.
But, as in other areas of the market, the percentage growth has slowed, she says.
“While the spike in prices may be indicative of inflation, it also suggests that this is a stable segment of the market and that current economic pressures have not wiped out sales of high-end properties. .”
As the market cooled, the number of sales in all price ranges declined, so the increase in the proportion of sales over $5 million suggests that the high end is holding up, a said Nick Goodall, head of research at CoreLogic.
This is a very different part of the market, driven by banked-up “movers” and largely insulated from issues such as the cost-of-living crisis, access to credit and rising interest rates, which are impacting buyers in the lower price brackets, he says. .
“There is a part of the population which has behaved well in recent years, and which is able to buy a prestigious property if the time is right for it, and which sees a property which corresponds to its requirements .”
There may be fewer high-end buyers, but there are also fewer properties for those buyers, which means luxury homes continue to sell even in a calmer market, he says.
So what kind of prices are high-end luxury houses commanding in today’s market?
CoreLogic analyzed tuned home sales figures for the 10 months to the end of October to uncover the most expensive sales this year. They discovered that the top five were all in Auckland, and all were over $12 million.
A five-bedroom home on the city’s prestigious Paritai Drive in Orakei took the top spot, selling for $20 million in May.
Built in the 1930s but recently refurbished, it sits on a 1289m² property, boasts waterfront views, an outdoor pool and spa, and four parking lots. Its last recorded sale price was $7.3 million in 2015.
The second most expensive sale on the list was a modern five-bedroom house with tropical gardens on Arney Road in Remuera. He left for $16 million in June.
Set in 1528m², the property boasts outdoor entertaining space, swimming pool and spa, wine cellar, four parking lots and is in the sought after double grammar area of the town. It last sold for $7.2 million in 2015.
A lifestyle property in Warkworth, on the outskirts of Auckland, was the third most expensive sale of the year at $13million in January.
Although there is a four-bedroom house with two on-site car parks, it is the 44,201m² section just off Whangateau Harbor that makes it appealing. It cost $2.5 million when it was last sold in 2006.
Rounding out the top five are two more Remuera properties.
One is a former convent, which has several buildings, with a total of 12 rooms, on a part of 2820m². The Victoria Avenue property sold for $12.3 million in July, after selling for $10.7 million in March last year.
The other is a five-bedroom heritage mansion on Remuera Road, which sold for $12 million in May. It is on a plot of 1774m², has an indoor swimming pool, a tennis court, three car parks, and a view of the port.
Peter Thompson, managing director of Auckland’s largest estate agency, Barfoot & Thompson, says the actual number of sales has slowed in the higher price ranges in recent months.
For example, his agency sold 37 homes for over $2 million in October, representing 5.9% of sales that month, and the lowest number of sales in the price category since. more than two years.
Prices have also fallen slightly, but the high end of the market is unusual because there are fewer properties available, so they are in demand when they come up for sale, he says.
“The big issue for sellers in this bracket is whether they are selling what they can buy in turn. Often sales are all about word of mouth and agents connect buyers with the type of property they are looking for when they come to market.
This means that eventual sale prices depend on negotiations, the people involved and their circumstances, as well as the property’s facilities, he says.
CoreLogic also identified the most expensive sales this year in Wellington, Christchurch and Queenstown.
In Wellington, a four-bedroom house on Marine Parade in Seatoun fetched the highest price. Although it’s not on a huge section, it’s right on the beach and has sea views. It sold for $5.9 million in March.
A five-bedroom house on Queen Elizabeth II Drive in Mairehau was the most expensive sale in Christchurch. It sits on a 6309 sq m section, seats seven cars and sold for $4.3 million in May.
And Queenstown’s best-selling was a five-bedroom house on a 16,824m² lifestyle block on Baird Lane near Lake Hayes. He left for $9.2 million in July.
The Queenstown market is well known for its exclusive luxury properties, and last year its most expensive sale reached $18.25 million.
Mark Harris, managing director of Queenstown-based New Zealand Sotheby’s International Realty, says the area is a desirable lifestyle destination and demand for its high-end properties remains strong.
Although the market is not like last year, there is still a lot of activity, and this year has seen reasonably large transactions, he says.
“Notable sales include four properties which cost over $7 million and an 18,000 hectare alpine resort which cost over $34 million. We also have some expensive sales being negotiated right now. »
He doesn’t think the area’s appeal to high-end buyers will diminish, particularly as borders reopen and Australians and expats return to the market.
Last year’s best sale was $22million for a house in the country’s most expensive suburb, Herne Bay in Auckland, while wealthy advertisers Anna Mowbray and Ali Williams paid the highest price of 2020 with $24 million for a waterfront property in Auckland’s Westmere.
But those sales are still far from the bar set by the most expensive property ever sold in New Zealand.
It was a cliff-top mansion on Paritai Drive in Auckland, which was developed by former Hanover finance director Mark Hotchin and sold to Chinese businessman Deyi Shi for 39 million dollars in 2013.