Demand in Rotorua's million-dollar post-Covid-19 lockdown market has led to the sale of about a dozen properties already this year.
Despite new analysis of Rotorua's property market showing a slight drop in sales above $1 million in the first half of 2020 compared to last year, local agents are reporting"strong activity" in the $1 million market.
Professionals McDowell Real Estate Rotorua principal Steve Lovegrove said the company sold a property above $1m in the Hamurana area last week.
Lovegrove said there had been strong activity in the market for lifestyle blocks on the lakefront.
However, he said it had not been as easy to get on the $1m property ladder post-lockdown and people were typically buying subject to the sale of their previous homes.
Professionals McDowell Real Estate Rotorua principal Steve Lovegrove. Photo / File
Lovegrove said there was a flow-on effect into the upper-end market when a buyer in the $500,000 price bracket sold their home for one in the $700,000 bracket and that owner bought into the $1m market.
"Typically, buyers are people who are upgrading."
He said it would be interesting to see if there would be an increase in those property types if owners sold because of the impacts of Covid-19. This could create more supply than demand, he said.
Professionals McDowell Real Estate Rotorua lifestyle and rural salesman John Bellerby said the company sold eight homes in the $900,000 to $1m price bracket between February and July.
"We are getting good money for the vendors because the supply and demand are favouring the vendor," he said. "I can't see that changing given the low-interest rates."
Professionals McDowell Real Estate Rotorua lifestyle and rural salesman John Bellerby. Photo / Supplied
Bellerby said there had been lots of inquiries after lockdown from people outside Rotorua.
"They are seeing value in the area ... There is a lot more happening now [in the million-dollar-plus bracket] than there was three years ago."
Tremains Rotorua sales manager Megan Davies said the market had risen to meet demand and premium properties were now a strong part of the company's portfolio.
Davies was careful not to compare large lifestyle properties with residential but said Tremains had two auctions reach more than $1m.
She said both were lakefront properties though not right on the lake - one at Okareka for $1.3m and another was a "fiercely contested" Te Ngae Rd property which sold pre-auction for $1.1m.
"In early 2020 before Covid hit, one sold $980,000 and a further three in the high $800,000s since lockdown. We certainly have seen our average listing value increase."
The Real Estate Institute of New Zealand's Million Dollar Price Report showed 11 properties sold for more than $1m in the first half of 2020 - down from 24 recorded in the first half of 2019.
Reinz chief executive Bindi Norwell said sea and lake views continued to be a driving factor in million-dollar-plus properties sold in the Bay in the last six months.
Reinz chief executive Bindi Norwell. Photo / File
Norwell said many of the top sales were on Spencer Rd in Lake Tarawera.
"While on the face of it, the number of million-dollar-plus sales has fallen when compared to the same period last year, in actual fact the percentage of million-dollar-plus properties has actually increased."
A total 17.3 per cent of all sales in the Rotorua District were over the $1m mark compared to 12.9 per cent for the first half of 2019.
"Part of this uplift in top-end property sales can be attributed to pent-up demand post lockdown," Norwell said.
"But it's also underpinned by some strong fundamentals including low-interest rates and the temporary removal of LVRs which has made it a great time to purchase for both first-time buyers and investors."
Meanwhile, OneRoof/Valocity's figures showed 12 residential and lifestyle properties settled for million-dollar-plus in the first half of 2020, down from 30 last year.
Valocity director of valuation and innovation James Wilson. Photo / File
Valocity director of valuation and innovation James Wilson said luxury high-end sales had been plateauing for some time, before the onset of Covid-19.
"However, since Covid-19 has occurred, we have seen an increasingly cautious mindset being adopted among owner-occupiers in the mid-to-high $1m price brackets, who have adopted a wait-and-see approach."
OneRoof editor Owen Vaughan said the data showed there had been a slowdown in properties selling for more than $2m.
OneRoof editor Owen Vaughan. Photo / File
"It seems to be these properties are owned by people who aren't going to make rash decisions unless they are under pressure," he said.
"If you can afford to hold on to your property to get a premium price you're going to do it."
Reinz: Rotorua's top five sales in first half of 2020
241 Spencer Rd Lake Tarawera $2,300,000
85 Spencer Rd Lake Tarawera $2,125,000
165 Spencer Rd Lake Tarawera $1,755,000
175 Okere Rd Okere Falls $1,730,000
132 Spencer Rd Lake Tarawera $1,605,000
Source: Real Estate Institution of New Zealand
OneRoof: Rotorua's top five sales in first half of 2020
