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  • Writer's pictureReal Estate Today - New Zealand

Availability of Luxury Homes Sees a Sharp Decline


For the second year in a row, both luxury house and luxury unit transactions decreased.


For Auckland, houses that sold for more than $5 million were considered to be luxury houses, and units that sold for more than $3 million were considered luxury units. In Wellington, where sale values are smaller, the condition for luxury houses was at least $3 million and the condition for luxury units was at least $2 million.


National

The pandemic led to a boom for New Zealand’s property market and resulted in a record number of luxury homes sales across the country.


The last two years, however, have seen an almost complete reverse of the explosive growth experienced between 2019 and 2022. As the market recovers, it is possible that the shortage of properties will create competition for New Zealand’s finest homes


New Zealand sold 141 luxury houses and 49 luxury units in 2023 with both property types dropping by 60 per cent from their respective peaks in 2021.



Because luxury houses saw a more significant growth jump between 2019 and 2021, their sales sit only slightly below what it was in 2020. On the other hand, luxury unit sales in New Zealand are being pushed back to 2018 levels.


Auckland remains to be the dominant source of sales for both property types, with 88 per cent of all luxury house sales and 80 per cent of all luxury unit sales.


Within this ten year time frame though, what stands out is the luxury house market in Wellington, which grew by 7.5x to steal 8 per cent market share from Auckland. In comparison, all other markets only grew by 1.5-1.7x across the same ten years.



Auckland

Auckland transactions for both luxury houses and luxury units peaked in 2021.  


Since then, both have dropped by 61 per cent to end with 120 houses above $5 million sold and 39 units above $3 million sold.


For luxury houses, this means transaction levels sit just below 2020 levels, but for luxury units, this means transaction levels dropped all the way back to 2018.


With such a large share of New Zealand’s luxury market, it’s no surprise that the trends we are seeing in Auckland mirror that of the country as whole.


Remuera is the overwhelming favourite suburb for luxury houses with 26 houses sold in 2023. The runner up, Herne Bay, sits with seven houses sold, while Epsom follows close by with six houses sold.


In comparison, luxury unit sales seem more evenly distributed across suburbs in Auckland. Parnell leads with five units sold in 2023, Remuera follows with four units sold, then Milford, Kohimarama, and Papatoetoe cap the top five with three units sold each.


Wellington

Wellington ended 2023 with 17 houses sold above $3 million.


This is a slight increase from 2022, but still almost half of the peak reached in 2021, when 32 luxury houses were sold.


Luxury unit sales in Wellington reached its peak of 20 units in 2020 then stayed there until 2022. Last year, sales dropped in half to just 10 units worth more than $2 million sold.



Mount Victoria, Wadestown, and Kelburn share the top spot for suburbs with the most luxury house sales in Wellington. Seatoun follows with two luxury houses sold.


Luxury unit sales in Wellington are concentrated in Te Ara that sold three units above $2 million in 2023. Oriental Bay, Wellington Central, and Ranui are the only other suburbs with luxury unit sales.


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