housing market

PHOTO: Auckland. FILE

New sales data indicates that the luxury housing market is experiencing a downturn, with some affluent New Zealanders relocating their wealth and businesses to Australia.

Caleb Paterson of Paterson Luxury recently sold a 440-square-meter, five-bedroom, four-bathroom luxury home in Dairy Flat, a northern suburb of Auckland. He didn’t disclose the exact sale price but mentioned it was between $4 million and $5 million. The owners decided to sell their entire property portfolio to retire in Australia.

“They believe retiring in Australia will be better than staying here,” Paterson told Newshub.

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Paterson reported selling seven similar properties this year, with four clients not only moving to Australia but also transferring their businesses there.

“They’re moving about $50 million worth of equity from our economy to Australia’s,” he said. “Their long-term plan involves shutting down their companies here, leading to some closures.”

New Zealand doesn’t track occupations or net assets when people emigrate, so there’s no data to corroborate Paterson’s observations. However, annual migration statistics reveal that many Kiwis are leaving, with Australia being a popular destination.

“At least half are heading to Australia,” said Infometrics principal economist Brad Olsen. “Despite tough economic times globally, New Zealand’s current situation is prompting more people to move across the ditch.”

The housing market, including the luxury segment, is mirroring these challenging times. New data from the Real Estate Institute of New Zealand shows a 26 percent drop in Auckland sales of homes worth $4 million or more in 2023. Nationally, sales have decreased by 30 percent compared to 2022. Real estate agents also report more listings and longer selling times.

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Ollie Wall of Wall Estate Agents, which deals with the high-end market in areas like Auckland’s Herne Bay, noted, “Demand hasn’t decreased, but buyers are more discerning and taking their time to decide. The fear of missing out has diminished.”

Wall is currently marketing a 900-square-meter Herne Bay home bought for about $23 million, with an additional $7 million spent on renovations. The owners have now relocated to Queenstown.

Wall hasn’t noticed a significant trend of wealthy individuals leaving. “My clients are always on the move globally. Interestingly, we’re also seeing an influx of wealthy Kiwi expats returning for the lifestyle.”

While rich Kiwis, Australians, and Singaporeans can buy property in New Zealand, there aren’t many other wealthy foreigners moving in as investors. The New Zealand Government introduced the Active Investor Plus visa in September 2022, allowing foreign nationals to live, work, and study in New Zealand with an investment of $15 million. Since its introduction, 81 visas have been granted, including some for family members. In 2024, there have been 16 applications, with six granted, all from Hong Kong.

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According to premium real estate agents like Paterson, this situation presents a prime opportunity for buyers to enter the luxury home market.