Some may have thought Auckland’s streets were paved with gold but, as recent data indicates, more Kiwis may be betting on the Bay.
As luxury property agents look to recent OCR adjustments to rebuild confidence in ultra premium ($5 million plus) market, REINZ data suggests Auckland’s loss is the regions’ gain, Caleb Paterson of Paterson Luxury Real Estate asserts.
“Figures show a considerable shift in regional demand with Queenstown and Bay of Plenty picking up a share of the very top end of the residential market, potentially at the expense of Auckland.
Ultra-high net worth buyers will often have very specific requirements… this may be the space for a helicopter landing pad where they can take off without aggravating their neighbours or… a property where they can build an indoor horse arena.” – Caleb Paterson
“The Bay of Plenty’s ultra-premium property market has proved resilient in recent months. Total sales have decreased by 19 per cent since 2020, however sales in the $5m+ price bracket have increased by 6% over this period and they have seen a significant 20% lift between 2023 and 2024.”
Auckland’s share of the high-net-worth home buyer market is shrinking, he said. In 2019, 82% of New Zealand sales over $5 million occurred in Auckland. However, by 2024 this figure had dropped to less than three quarters, at 73%. Auckland’s $5m+ sales fell by 14% over the past year.
Paterson confirms that, while the national market has seen a decline in total sales, the high-end property sector has experienced greater impact. The data reveals that, in 2024, only 152 properties valued at $5 million or more were sold across New Zealand, a 55% decline from 2021. The total market recorded 72,484 sales across all price points, marking a 19% decrease from a 2021 peak.
“While the $5m+ market makes up only around 1% of the total market, this could represent a noticeable migration of wealth out of the country’s commercial centre,” he says. “Based on current data, at least $415 million worth of homes valued at $5 million or more have been sold in Queenstown over the past six years, 28% of these were in the last year alone. At least another $180 million have been sold in the Bay of Plenty over the same period.”
While the last quarter of 2024 had the lowest sales volume for the year, early indications are that the ultra-premium segment in Auckland has bottomed out but it will see a resurgence over the coming year, Paterson says. This would be a welcome return to growth following a ‘nightmarish’ period where over 40% of multimillion dollar homes were withdrawn from sale due to a lack of buyer interest.
“If we are seeing signs of an exodus from Auckland or simply a sharp increase in the number of high net worth families populating regional New Zealand from overseas or other parts of the country, a wealth transfer of this level may have repercussions for businesses in all three regions [Bay of Plenty, Queenstown and Auckland], particularly if it continues on its current trajectory.”
While noting an influx of luxury homes brought on and then withdrawn a few months later as the market stalled, Paterson advises that many homes have re-entered the market over the summer matched by steady levels of buyer interest.
“Looking at our current listings, every single property has had an increase in engagement and viewing over the past month.”
OCR adjustments have had a positive impact on the luxury market.
“Buyers of multimillion dollar homes are less dependent on accessing lending but they are seeing the drop in interest rates as an economic confidence signal and this is now manifesting as an increase in enquiry in this part of the market.”
Paterson Luxury Real Estate offers an advocacy service for the uber-wealthy, identifying houses that are not on the market and offering to purchase them. This type of concierge service is widespread in North America but has not been adopted at the same level in New Zealand, Paterson adds.
“Ultra-high net worth buyers will often have very specific requirements for their family or holiday home. This may be the space for a helicopter landing pad where they can take off without aggravating their neighbours or a requirement from one of our existing clients who is looking for a property where they can build an indoor horse arena.
“Other clients are looking for the most premium house on the street or some may want the worst house that they can transform into the most luxurious. The buyers will typically pay 10-15% above market rates to purchase something that is not advertised for sale.”
