Auckland real estate has always been its own bubble, and the upmarket central suburbs that make up the prized Double Grammar Zone are a bubble within the bubble.
Houses within the zone have always been worth more than those without because they allow access to two of New Zealand's prestigious and successful schools - Auckland Grammar School and Epsom Girls Grammar School.
Both are state schools and free - and it's this reason that real estate agents are optimistic about Grammar Zone house sales once the lockdown is lifted.
They believe there will be an increased push to secure property in the zone by parents who have had second thoughts about sending their children to private, fee-paying schools.
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Ray White agent Steve Koerber, who has specialised in this part of Auckland for more than 20 years, reckons the zone's housing market will have a “sizzling" May after little to no activity in April.
He says post-GFC, families who had been sending kids to private schools pulled them out to conserve cash flows and so needed to be back in zone. While some 35 percent of Remuera buyers are moving within the suburb, Koerber expects others to move into zone to switch their kids back to the two state schools.
“We are likely to see business-owners who live in big family homes outside the zone deciding to take the kids out of private schools. They'll be looking for something smaller, in Parnell for example,” Koerber says.
Carolyn Vernon, who heads Barfoot & Thompson’s Remuera branch, agrees.
"During times of economic constraint, families with children in private education will be reviewing costs. Moving to Grammar Zone suburbs means they can divert those costs without compromising on their children's education," she says.
Vernon predicts families from the Bays, Meadowbank, Ponsonby, Herne Bay or just outside Grammar Zone will drive demand for properties in Remuera, just as they did in 2008.
“They will look at it for the next two or three years. There are big decisions to be made. There are so many price points - you can still ‘downsize’ from a multi-million-dollar place.”
Vernon says there will be other buyers looking to purchase within the Zone - those who are looking for the financial security that the suburbs provide and those who already live within the zone but need to up-size so they can keep working from home.
Bayleys agent David Rainbow, who has seen plenty of property cycles in his 36 years in the business, says that unlike "flashy" suburbs such as Herne Bay, Remuera is more stable.
He thinks people’s experiences during lockdown might encourage them to look for properties nearer to schools so they’re not constantly ferrying kids around.
“Proximity will always be sought-after. We have survived without being in the car and a lot of people will look at their lifestyle differently,” he says.
Koerber expects there to be a surge of private inspections in Remuera and Parnell once the lockdown is lifted on April 28. “It will be a boomer in that first week,” he says, particularly from genuine buyers in the $1 million to $2 million price bracket.
“In the last two weeks, buyer enquiry has increased, especially from those who have already sold and have finance approval, which might expire in May. They’ll pay good money for a suitable home.”
The branch he works at already has a book of 75 listings with prospective buyers to set up appointments for property viewings next week.
However, Koerber says that after the initial post-lockdown burst, sales activity will drop off.
He expects total house sales in Remuera to average around one a day – or 360 a year, based on the GFC, when the number of sales in the suburb dropped to 391. “In 2002 and 2003, we saw record high numbers of 1001 and 973 - a frenetic 2.7 sales per day," he says.
He believes the second wave of buyers will have less urgency and will be looking for signs of market weakness before making an offer. However, he warns those buyers that when Remuera prices have dropped, they have done so very slowly and have a tendency to spring back quickly if the supply of new listings dries up.
“The best homes tend to hold their value,” he says.
