‘Those $14m-$16m house listings won’t happen again until next year’

After a quiet winter in Auckland’s blue chip suburbs of Remuera and Parnell, smart vendors are getting realistic about price, agents have told OneRoof.

One of the suburb’s top agents, Terry King, of Remuera Register, said the top end of the market was sluggish, although others told OneRoof that some big deals were done off-market and that there had been a “flight to quality”.

“People have difficulty seeing they’ll get a good price for their house, and they won’t sell because they can’t see other big sales,” King said.

He noted that, with one or two exceptions, today’s big sales numbers are maxing out nearer to $8 million than eight figures.

“Those $14m, $15m, $16m house listings won’t happen again until next year, people are saying they’ll leave it until then,” he said.

“Buyers are also unsure, thinking ‘if I don’t have to do it now, I’ll wait.’ Those two things have compounded."

King said that buyers are doing the math on, say, $5m houses that might need another $4m of work done, and asking “is this the place I want for $10m?”

Ray White Parnell agent Ross Tierney said savvy vendors were aware of global economic forecasts, so were prepared to meet the market and get deals done now.

“They’re knowledgeable, they've got friends off-shore and are having conversations. The forecast isn't great," he said.

“Vendors who are willing to meet the market, they're not interested in long settlement times, they want the money now, and they are making good money.”

Tierney said the popular houses, the ones that were attracting offers, were the ones that “people can just move into and not have to do anything. We get 10 offers on those. The ones with work to do are not so well received.”

Tierney had recently concluded three sales of $6m-plus. “For one property, we had five offers around $6m. We had multiple offers for properties around $7.1m to $7.6m,” he said.

An apartment in Remuera that recently sold for more than $12m under the hammer. Photo / Supplied

“These houses were getting 150 people through from all walks of life – expat Kiwis from Australia and United Kingdom, Singapore and locals upsizing and downsizing with lovely places to sell.”

Interest in the properties in the $5m to $10m price bracket had picked up after a slow winter. “We’ve been pleasantly surprised. They are definitely new people [buyers] into the market, figuring it out," he said.

“In Parnell we’re getting people from Herne Bay and Ponsonby seriously looking. Buyers are just looking for beautiful real estate, rather than suburb,” said Tierney.

King agrees: “The houses that have sold have something that makes them stand out – a large piece of land, a major renovation, a location or it’s a work of art.”

OneRoof analysis of settled sales in Parnell and Remuera found just six homes that have sold for $10m-plus so far this year, although several big deals have been struck in the suburbs that have yet to settle, including a mansion on Victoria Avenue, in Remuera, that sold for more than $24m and a penthouse apartment on Remuera Road that sold under the hammer for $12.77m.

Last year, there were 12 settled sales of $10m-plus in Remuera and Parnell.

Ray White Epsom agent Ross Hawkins said that $5m-plus buyers, who were not reliant on bank funding, were still active, albeit not at the same pace as last year.

Bayleys Remuera agent Gary Wallace: “Property above $10m is still moving. There are quite a few buyers getting residency and they have $5m to $10m to spend.” Photo / Supplied

“It feels like volume is down, but the buyer interest definitely seems to be pretty good,” he said.

“People are taking longer to make decisions, the FOMO is not there so they’ve got more time to look around. We’ve got to work like we did in the old days, it’s back to normal.”

Hawkins said that a lot of the high-end activity was not visible to the market, with a lot of property listings, and eventual sales, happening completely off-market.

“It’s that tall poppy syndrome. People don’t want to be seen to be doing well, which makes sense when other people are struggling and having a hard time. There are still some good things in the pipeline,” he said.

Bayleys Remuera agent Gary Wallace, who with wife Vicki, closed the deal for more than $24m on the Victoria Avenue mansion, said that while the total market had dropped, market share at the upper end had picked up.

“There’s a flight to quality. People know that a legacy property will be theirs for the next 10 years, so, like in the Gucci shop, if it fits you, you splash out,” he said, with properties being shown in the $7m, $8m and even $10m price range might have up to 20 highly qualified buyers through.

“Property above $10m is still moving. There are quite a few buyers getting residency and they have $5m to $10m to spend.”

That said, King noted the market pause had not reached the level of 1990, when the delayed impact of the 1987 stock market crash caught up with New Zealand’s property market.

“The market was at a stop. The banks were making people sell houses but no one was buying, banks were pressuring people to sell at any price. It’s almost like that, but we can still find the buyers who can understand the value,” he said.