A modern, glass and steel mansion on Burwood Crescent, in Remuera, Auckland, sold for $20.6m in May 2023. The deal was brokered by Graham, Andrew and Ollie Wall, of Wall Real Estate.
The slump sapped enthusiasm at the top-end of town but 2023 will still go down as a record-breaking year.
Luxury residential sales have sailed along largely unscathed in the rarefied air at the very top of the market in what was a lean year overall for real estate.
As the rest of the market largely struggled to zing, a Queenstown deal was so big it smashed New Zealand’s house price record, snaring over $40 million for a 15ha-plus estate in the wealthy resort town.
Although the deal is yet to settle, it shatters the previous record of $38.5m paid for the mansion built by the disgraced financier Mark Hotchin in Auckland’s Ōrākei, a record which has stood for 10 years.
Those price tags are exceptionally large for New Zealand where the luxury market is better defined as anything from $10m up.
The data shows the number of sales in the $10m-plus category has dipped compared to the immediate post-Covid years when the overall market took off, says Wayne Shum, senior research analyst for Valocity, OneRoof’s data partner.
For the 12 months to August this year, there were 22 settled sales compared to 37 for last year and 29 in 2021.
“While potential buyers in this price band are not as bothered by credit conditions and the high cost of living as the rest of the market, increased borrowing costs do have some effect on their purchasing power,” says Shum.
But agents who work the upper echelons and made big sales this year, say these sorts of buyers generally have enough money they don’t have to worry about nuisances like interest rate rises and the credit crunch.
Johnathan Sissons, managing director of New Zealand Sotheby’s International Realty in Remuera, says there is plenty of disposable income around.
His office sold a mansion on Ronaki Road in Mission Bay in September for $11.5m – a five-bedroom, three-storey luxury house that had been rented for $5000 a week.
Sissons says while the $4m-$7m end of the luxury market has been quiet, the $10m-plus end has been active.
He points to the sale by his office of an Ōrākei boatshed as showing the health of the luxury market. Boatshed 15 not only fetched $2.05m, it had stiff competition.
While not a $20m house, Sissons says the people who bought and sold the boatshed are in that top level of the luxury market, and that at least six people made bids with two waging a “ding-dong” battle.
“Whilst it’s not a home, it’s an exorbitant amount of money to spend on a boatshed,” he says.
Luxury stock has been limited through the year but Sissons and other agents say once National began talking about reversing the foreign buyer ban, vendors in the $10m-$20m bracket sat up and began to have conversations with agents about possibly selling, some of them in order to buy in other locations.
Sissons says these are not downsizers so much as people wanting to buy bases in other places, such as London where they have adult children, or other holiday destinations at home and abroad.
They no longer need the big family home which comes with too much upkeep – there are grounds, tennis courts, swimming pools and multiple bathrooms to attend to at the upper end of the market.
“They are looking at not having all their eggs in one basket and having Waiheke, Queenstown, possibly an international property, as well as an Auckland base.
“The people that are selling, they have money and they have options – there are no distressed sales at all.”
The Queenstown record-breaker was sold by Hamish Walker, director of Walker & Co, who is not revealing where the property is. He’s not expecting to match the sale price any time soon, but says he has other sales on the horizon in the $10m-plus category.
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Sales in the Queenstown luxury market have slowed this year compared to the post-Covid days in 2021, he says, but the market picked up in August. He thinks this is because of more certainty coming out of Auckland and eastern Australia where clearance rates were over 60 per cent compared to only 10 or 15 per cent a year ago.
Queenstown gets a lot of buyers from Auckland, Sydney and Melbourne who base their confidence on their own markets when looking at other places to buy in, Walker says. By September, a lot of contracts across the market were being put on properties that had been sitting around for a while.
“Certainly, that applies to the luxury market, too; a lot more inquiries and a lot more transactions happening.”
Demand will always be high in Queenstown because it’s so beautiful and land is in limited supply as the town is ringed by mountains, he says.
Graham Wall, the former record-holder who sold the Hotchin mansion in 2013, congratulated Walker on the record-breaking sale but says his agency, Wall Real Estate, still holds the Auckland record.
Wall and his two sons, Ollie and Andrew, have sold three $20m-plus homes in Auckland this year, including a designer mansion in Burwood Crescent, Remuera, and a Whitford mansion that belonged to a wealthy American entrepreneur said to have one of the world’s finest car collections.
The third, a waterfront mansion in Herne Bay which went for “well over” $20m, has a non-disclosure agreement attached to it so he could not reveal the address. At the time of writing, he was also expecting to close the deal on another waterfront Herne Bay property, which would likely fetch “way past $20m”.
Wall says properties have taken a bit longer to sell this year but in the pricey atmosphere of the upper echelon, the market is generally unaffected by other market forces.
“Ultra high-priced properties are selling for late tens, $20m and above. We haven’t seen any bargains.”
A reversal of the foreign buyer ban will “definitely” lead to sales over $40m in the coming months, he says, adding that doesn’t mean Chinese people and Americans are going to turn up and buy all the properties, but it does give the existing luxury market more confidence knowing there will be more buyers in that league.
Wall says buyers at the top end of the market want unique properties, and they often want new, sometimes knocking down the existing house to build again (Wall knows of a house being built in Auckland likely to cost $40m).
Gary Wallace, from Bayleys, sold a house on Aldred Road, Remuera, with a golden bathroom, for more than $12m this year, and another on Arney Road in the $9m-plus range.
He says there has been a bit of “indigestion” in the high-end market because of the political climate, but more optimism around by September.
Most buyers want a quality, private family home close to quality schooling in a safe neighbourhood, and while golden bathrooms are not specified, the Aldred Road one has been popular as it is tasteful rather than ostentatious.
Wallace says buyers lead busy lives and most are looking for turnkey homes so when a house is presented to a high standard “you get run over in the rush”.
The Arney Road home had more than 70 groups through – more groups than for a $3m home, he says.
Auckland’s rural fringe has also seen big sales, such as a “super mansion” on Goldflats Lane in Coatesville, which sold for $11.5m.
Agent Natalie Newton, of NZ Sotheby’s International Realty, says the higher end of the market doesn’t change that much and has been active through the post-Covid years – and is still active now.
High net-worth clients search for the right property and don’t require finance, generally wanting something ready to move into, she says.
“They like smart homes, they like a cinema, they like a swimming pool. Physically move-in ready and even turnkey is a real good option.”
Coatesville attracts people who want out of the rat race but still with good schooling nearby, and who also want to be close to the central city but with privacy and security.
Newton’s buyers are both locals and people from overseas. No matter who is in government, New Zealand is still seen as a beautiful place to come and live, she says.
“We’ve still got the most wonderful countryside. We’ve also got the way the New Zealand dollar is against the American dollar – it’s very attractive, but more than anything it is a stunning country to live in.”
Buyers tend to be self-made businesspeople who have worked hard, she says. They are high net-worth due to savvy business decisions, and they are highly educated in the property market: “You have to really be the top of your game to be able to sell to them”.
New Zealand’s stunning coastline also beckons those with deep pockets. James Doole, of Barfoot & Thompson, sold a retreat-style home on Tāwharanui Peninsula, for $13.25m, more than double its CV.
Doole says his year was busy with no shortage of interest in luxury coastal properties. People want trophy properties that can be passed down, he says.
“They buy it with their grandkids in mind and also their kids and families and futures and looking at Christmases and joint family things.
“We’ve got a list of buyers looking for those sorts of homes. It has to be right.”
Buyers often want a location like Matakana or Ōmaha, which are only an hour from Auckland, and while there is always expat interest, buyers are often couples with successful businesses as well as retirees.
“The downsizers is what we’d usually call them but sometimes they are upsizing. They’re looking to find somewhere for the whole family.”
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