The number of properties selling for $2 million and above has dropped sharply, new figures show.
Analysis of settled residential sales in the 12 months to the end of September highlights the sudden change in housing market this year, and identifies the areas where the appetite for expensive homes has shrunk.
OneRoof and its data partner Valocity found that the number of $2m-plus sales in New Zealand peaked at 1759 in the three months to the end of December, but dropped to just over 1000 in the first quarter of this year.
The number $2m-plus sales in second quarter of this year dropped to 816 and then fell again to 607 in the three months to the end of September. The fall from market peak was a staggering 65%.
Start your property search
The research found that the bulk of $2m-plus sales over the 15-month period were in Auckland, with Greater Wellington accounting for the next biggest share of the top end market.
The top end of the market in Auckland peaked in the last three months of 2021, with 1353 properties in the city selling for $2m and above. However, the overall market slump, fuelled by tighter credit conditions and rising interest rates, has curbed appetites for expensive property purchases this year, with number of $2m-plus sales in Auckland in the third quarter of the year down 67% from market peak.
The number of $2m-plus sales in Greater Wellington hit 91 in the last three months of 2021 but has fallen 73% to 24 in the three months to the end of September this year.
The analysis also identified the locations with the highest share of properties valued at $2m and above. Top of the list is Queenstown-Lakes, with $2m-plus homes accounting for 29% of the territorial local authority's total housing stock. Second is Auckland, where $2m-plus homes account for 12% of total housing stock, followed by Thames-Coromandel (11%) and Waikato (10%).
Nationwide, 5.7% of residential properties fall into the $2m-plus category.
The Auckland suburbs with the highest number of $2m-plus homes were Remuera (5433), Mount Eden (3403) and Epsom (3147), all of which are in or substantially in the city's prized double grammar zone.
“Auckland and Queenstown Lakes are where we see the bulk of that $2m-plus stock,” says James Wilson, head of valuations at Valocity.
“You do see little coastal pockets of $2m-plus properties elsewhere. But we're not going to get international buyers suddenly saying, ‘We're going to put all our money somewhere else’.”
Within Auckland, 9173 of the 65,452 $2m-plus homes are lifestyle properties, 2369 are apartments, 784 are units or townhouses, and 2574 are home–and-income properties.
An aerial view of homes in Remuera, in Auckland. The suburb has the highest number of $2m-plus sales in Auckland. Photo / Chris Tarpey
Valocity director of valuations James Wilson: "What was $2m ten years ago, is now $10m." Photo / Fiona Goodall
Many outlying areas known for either holiday homes or lifestyle properties feature in the Auckland data. The one with the highest number of $2m-plus homes is Omaha, with 728 properties, followed by Whitford 624, Karaka 612, and then Oneroa (Waiheke) with 529.
Some lower socio-economic suburbs also show up in the data. For example, Glen Innes has 115 $2m-plus properties, Avondale 111, Massey 108, Henderson 100, Panmure 98, Papakura 70, Papatoetoe 47, Manurewa 28, Glenfield 19, Takanini 18, Favona 16, and Ranui has 14.
“One thing that comes out of this [data] is just how many of those suburbs that have a median value over $2m now,” Wilson says. “If I compare that to before this property cycle, so that I think back about eight years, there were only a handful of suburbs in Auckland that had a median value of across $2m.”
Wilson says one standout from the data for him is how much the New Zealand market has “internationalised” over the past cycle. Even during the pandemic when the borders were closed to overseas immigrants.
“Did we see demand for high-end property drop away because of the fact that borders were closed? No, we saw the complete opposite. Kiwis invested heavily. You saw a massive surge in demand for especially high value coastal property. Kiwis [were] returning home, or at least their capital was returning home to pick up an asset in their home country.”
The other clear trend to emerge from the data was how what used to be the domain of Auckland’s central rim suburbs, has moved to the northern and southern fringe. “That wealth effect is moving outwards,” he says. “What was $2m ten years ago is now $10m. And so if you're a buyer in the $2m to $3m club you're looking at the fringes now.”
It also indicated that people are looking for larger landholdings, says Wilson.
