The Auckland property market went "crazy" in the last few weeks of 2019, with an agent reporting a $9 million sale for a high-end Auckland property.
While the agent could not reveal the address of the property because of confidentiality clauses in the deal, she said the sale was locked in between Christmas and New Year.
"It's gone crazy," the agent, who didn't want to be named, said. "December was manic and all the signs are there for January, there are so many listings coming on."
She added that her new listings for January and February were sitting in the $4 million price bracket.
Start your property search
It follows the November sale of a mega-mansion for $14.5m on the Mahurangi peninsula to Kiwi expats, and another of $12m at Omaha Block Access Rd, Leigh, to financiers Hugh and Carmel Fisher. Last year, two properties in St Heliers sold for just over $10m each, while just three others reached $9m.
The top end of the market's strong finish came after a near-year long slump.
Across the country, sales in the exclusive $3m-club dropped from 427 in 2018 to less than 400 last year (394) across the country, according to Real Estate Institute of New Zealand (REINZ) figures.
While nowhere near the New Zealand 2016 peak of 11,661 million-dollar plus properties sold, nationally figures are starting to climb again, last year reaching 10,869. Outside Auckland, last year 475 more million dollar properties sold than in 2018, to reach a total of 3211.
The top end slow-down was mostly in Auckland, where million-dollar sales across the city were down 4.6 percent on the year before, the third consecutive year of decrease. At the market peak in 2016, 9634 Auckland properties sold for more than $1m, last year's figure was 7658.
The hit came hardest in the higher priced sales which have still not recovered from the 2017 slowdown. Then, Auckland sales over $3m peaked at 478 sales, with just under 94 sales over $5 million. Last year that was down to only 323 sales over $3m, and a mere 59 over $5m.
The top end is growing in other parts of the country, albeit from lower bases. In the Bay of Plenty, $3m sales went from 8 to 13 last year, mostly in Mt Maunganui.
Bayleys’ Bay of Plenty chief Simon Anderson says the demand for the top-end properties will continue to increase this year as there are a lot of people with big cash in the region, driven by a growth in large businesses that are bringing in high income staff.
Anderson also noted an increase of buyers from Auckland, who are moving to the region for the lifestyle and are working remotely.
“People are seeing Tauranga as a nice place to live with hospitals and school and it’s a good lifestyle choice,” he says.
He says there’s been a huge demand for sections bigger than residential, but not quite country lifestyle-sized, with a substantial 400 sq m plus homes, mostly less than 10 years old.
However, there is an "absolute shortage of listings” that fit the description, as more buyers are confident to borrow heavily with the current low interest rates.
In other expensive markets, Otago - mainly Queenstown, Wanaka and environs - $3m plus sales stalled, but $1m sales grew 14.3 percent. In Wellington, million-dollar sales were up 27 percent to 963, and there were even 16 $3m plus sales.
Auckland real estate agents are confident the total 2019 figures do not reflect the last quarter of the year, which picked up after a very slow start.
Premium chief operating officer John Hastings said that after a couple of years of hesitating, his North Shore vendors were finally ready to move, as business mood improved. He expects January and February sales figures will show much better sales than the same period last year.
Across Takapuna, Belmont and Milford, REINZ says that 39 properties sold for over $3m , another 7 in Devonport and Narrow Neck.
Premium agent Jelena Freeman said that they had their best December ever, across all price points, including a sale she made of $6.6m in December and another for $5.8m in January. And she says her high-end professional vendors are now confident in the economy and ready to move.
“People got sick of not moving. I feel a positive emotional shift, people making the decision to do something with their life,” she says, adding listings with $3m to $5m price tags are moving. Almost all the sales are to locals, with perhaps 10 percent [of buyers] coming back from overseas.
In high-end Remuera, where 66 properties sold for more than $3m and 16 for over $5m, Bayleys agent Gary Wallace said the flat spot of 2019 became a self-fulfilling cycle, as vendors wanted to identify their next purchase before committing to list their home.
“So if it was not there, they sat. We need activity from both buyer and seller to stimulate the market,” he says.
“We’re comingout of the holidays with multiple offers on properties, very much stimulated confidence and people getting on with their lives. There’s a lot more confidence in the $4m to $5m market.”
Ray White Remuera agent Steen Nielsen says that while there isn’t the hype in today’s market as there was in 2016 when people moved quickly for fear of missing out, last year’s buyers were more relaxed and in no hurry to purchase, as they didn’t expect prices to go up while they thought about it.
He says coming into February, there are far more purchasers than sellers, but buyers are seeing some urgency now. Neilsen says that properties now come to auction with multiple bidders that only 8 or 12 weeks ago would have had just one – leisurely – buyer, and that perception will become the new reality.
Fellow Ray White agent Steve Koeber says that at the beginning of the market, buyers were cautious to commit in the $3m to $3.5m market as they were afraid the properties might lose value, so stayed on the sidelines.
“Then that sideline got crowded, and they started to jump in,” he says. “March to September was like a huge Mexican standoff. But in 10 years’ time, people will look back and say ‘I wish I’d bought then’. ”
Koeber says that now the market is crying out for listings in the $3m to $5m range, and expects that buyers will likely include Kiwis heading home from Asia in the wake of Hong Kong unrest and coronavirus, replacing the foreign buyers of yore.
“I have an expat Kiwi with a $4.5 m budget who has been searching for 18 months, desperate to buy. That sort of person will drive the market.”
end
