- Luxury home prices have dropped significantly, with some suburbs seeing declines over $500,000.

- Auckland’s Totara Park experienced the largest drop, with values falling $1.2m.

- Despite the slump, some areas like Omaha and Queenstown-Lakes suburbs have reached new value peaks.

The cost of buying a luxury home in New Zealand has tumbled by more than half a million dollars in some suburbs, new OneRoof research has found.

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House values in the country’s wealthiest neighbourhoods have suffered significant drops since the post-Covid property market peaked three years ago.

The slump has almost halved the number of suburbs with an average property value of $2m or more.

For those looking to bag a mansion at a “bargain” price, the drops in house values will be welcome news, with buyers now able to make the step into a prestige suburb without breaking the bank.

The average drop at the top end of the market was $370,000, although OneRoof found 12 suburbs where the average property value had fallen by more than $500,000.

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The biggest fall was in Totara Park, in Auckland’s eastern fringe. The average property value in the suburb has dropped $1.2m from a peak of $2.7m, mostly because of a flood of lower-value townhouses hitting the market there.

Unfortunately, the same cannot be said for the next biggest fallers identified by the OneRoof research. House values in Oriental Bay, Remuera and Kelburn fell by more than $600,000, with market forces – i.e. buyers unable or reluctant to pay peak prices – the likely cause.

Prices in New Zealand’s most expensive suburb were not spared either. The average property value in Herne Bay, in Auckland, dropped $556,000, from $4.2m to $3.6m, since market peak in February 2022. However, recent trends suggest bargain-hunters should get in fast, with house values in the suburb rising 3.7% in the last three months.

The analysis found a clutch of suburbs that had defied the slump and risen in value in the last three years. The average property value in the wealthy beach town of Omaha reached a new high of $2.9m in January, up from its previous peak of $2.8m in 2022.

Also hitting new peaks in the last 12 months were the Queenstown-Lakes suburbs of Arrowtown, Lake Hayes, Kelvin Heights, and Wanaka, although property values in all four have slipped since November (Omaha values, on the other hand, jumped 5.5%).

Herne Bay is New Zealand's most expensive residential suburb, but the average property value there has dropped $556,000 since market peak. Photo / Chris Tarpey

House values in Wellington’s most expensive suburb, Oriental Bay, have fallen by more than $600,000 since market peak. Photo / Getty Images

Herne Bay is New Zealand's most expensive residential suburb, but the average property value there has dropped $556,000 since market peak. Photo / Chris Tarpey

Omaha’s average property value has hit a new peak of $2.902m. Photo / Dean Purcell

The OneRoof analysis looked at property values in suburbs with 10 or more settled sales in the last 12 months. Of the 1161 covered, 38 – 3.2% of the total – had an average property value of more than $2m. That is 30 more than five years ago, but at market peak, the number of $2m-plus suburbs was 73 (which is still only 6% of the total analysed).

Thirty-one of the 38 $2m-plus suburbs are in Auckland. Most were waterfront suburbs although some could be found in the city’s lifestyle fringe. Thanks to Queenstown-Lakes, Otago was the region with the next biggest concentration of expensive homes, but the analysis also found one apiece in Northland (Langs Beach); Waikato (Tamahere); and Wellington (Oriental Bay).

The analysis also looked at the gap between the top and bottom of the housing market. The price difference between the most expensive and the cheapest suburbs was smallest in Hamilton - only 91% ($550,000). Three other locations, all in Auckland, have similarly small gaps: Franklin (98%) Papakura (97%), and Waitakere (95%).

The gap is widest, however, in Auckland City, where the difference between Herne Bay and Auckland Central was $3.1m.

The gap between the top and bottom of the housing market has changed in recent years, sometimes for the better, and sometimes for the worse. The gap has closed by more than 150 percentage points in Whangarei but widened by more than 100 points in Auckland City.

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