With the mega-wealthy taking over Sydney’s harbourside enclaves, paying NZ$100 million for the privilege of a water view, the merely well-to-do are being forced out into the city’s outer suburbs.
In Auckland, the mega-wealthy and well-to-do have a different kind of problem: not enough homes that suit both their needs.
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Ray White Remuera agent Steve Koerber had a client who had a premium $30 million offer on his house but rejected it because he didn’t know where else he would go, and another client had an offer just shy of $20 million who went out shopping but couldn’t find anything else so decided to stay put.
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“He said at the time, ‘Steve, in 10 or 15 years’ time if I just stay here it’s probably going to be worth $60 million.’”
The offers show the buyers in that price range are out there and are on the hunt, Koerber says, who is also seeing big demand for properties in the $4 million to $6 million range.
“I’m running an auction next week in that range and I wouldn’t be surprised if there’ll be five, six, seven underbidders who miss out. They’re looking for quality property and they’ll push the prices up of other properties in that range.”
While many buyers in the next level down, in the $1 million to $3 million market, are drawn to Remuera for the double grammar school zone, those in higher brackets often send their children to private schools and want Remuera because it’s a great neighbourhood.
Buyers are often so determined to get into Remuera that they’ll borrow more money to do so.
The perception from clients is Remuera is of similar cost to somewhere like Grey Lynn, Koerber says.
“We get the comment all the time that in Grey Lynn you buy a renovated bungalow for $3 million and it’s on a postage stamp and you’re elbow to elbow with your neighbours whereas at least in Remuera for $3 million it might be a bit of a do up but the sections are bigger.”
Koerber just sold a do-up at 28 Ridings Road in Remuera for $4.788 million (a stellar $5567 per square metre and more than $1 million over CV). “A sale like that sends a few shockwaves around the market because it’s a pretty high sale price.”
Record do-up: 28 Ridings Road, in Remuera, sold for $4.788 million. Photo / Supplied
Pene Milne, of New Zealand Sotheby’s International Realty, Auckland central, says most high wealth people try hard to be in their chosen suburb but might broaden their search area if that helps achieve the sort of home they want, but they don’t broaden it a lot and may try to stretch themselves financially to secure the property they want.
“There’s a lot of people with kids at private schools so the school zone doesn’t impact them, so they’ll buy in Herne Bay just as happily knowing the kids can go to the private schools in Remuera. You’ll find them all over the city. They could be in St Heliers or Westmere.”
Auckland’s suburbs have diverse homes and there’s a wide range of buyers at the upper end of the market seeking quality suburbs like Remuera, Parnell and Epsom, but far fewer buyers in the $20 million range.
“There isn’t that volume in the same way you might get in Sydney.”
Kellands agent Martin Dobson, who sells mainly in Herne Bay and St Marys Bay, says wealthy people from the eastern suburbs often come his way to downsize.
St Marys Bay is popular because of the smaller sites and because it is central with views of the marina and the harbour bridge, and because it’s close to motorways, there’s easy access for people to get away to their beach houses.
Prices are strong, he says, with not much around for under $3 million.
A ferry ride away in Devonport, Bayleys’ Linda Simmons says entry level in the suburb is mid-$1 million with the mid-$2 million to mid-$3 million price bracket very active. The top bracket is around $5 million but there aren’t many of those properties around.
People move to Devonport not for schools but for Devonport itself: “It’s the beaches and it’s a little village and it’s how New Zealand used to be. It’s full of beautiful homes because it hasn’t been infilled and (with the heritage lay across the area) there’s such strict restrictions on playing with properties.”
The problem is not people being forced out but people coming in, with Simmons saying agents are being inundated with queries from expats coming home.
“They’re ringing and writing from where they are, saying ‘we’re coming home, can you find us a home, here’s our brief’. They keep in touch then the next time you hear from them, they say, ‘We’re here, we’re in quarantine, we’ve got two weeks.’”
Expats, however, are finding that finding finance is tough even if they held good jobs overseas, Simmons says.
“If they’ve left a job in the UK to come here, they [the banks] don’t count any of the historical income.”
