Million dollar home sales at 07 levels

Property

Barfoot sales of NZ$1 million homes return to pre GFC levels, with Herne Bay and Devonport topping the price charts

1st Aug 12, 3:26pm by Amanda Morrall

By Amanda Morrall

Sales of Auckland homes priced over NZ$1 million have returned to pre-global financial crisis levels with the seaside leafy suburbs of Herne Bay and Devonport topping the price charts, Barfoot & Thompson reported Wednesday.

Wendy Alexander, CEO of Auckland largest real estate agency chain, said 424 homes over NZ$1 million were sold in the first half of this year, a 38% increase on last year's numbers, matching records for the December - June period in 2007.

In contrast, only 51 homes valued at over NZ$2 million were sold in the first six months of 2012. While sales for NZ$2 million-plus homes in Auckland are up on last year's numbers by 36, Alexander said it was still below the peak in 2007 when twice as many were sold in the first six months.

Alexander said renewed vigour in the million-dollar home market was being driven by overall recovery in the property market, on top of Auckland's growing reputation internationally.

"While this trend to more homes selling for more than a million dollars is assisted by a general rise in prices, more significant contributors are the growth of Auckland into a world class city and a growing preparedness by high-earning people to invest in their lifestyle."

Demand is coming from a cross section of markets including the suburbs, the central business district, beach-facing suburbs and lifestyle blocks. Alexander said home buyers were building anew or rebuilding on existing land to take advantage of the land values.

More established areas west of State Highway 1, including Western Springs, Mt Albert, Blockhouse Bay, Hillsoborough, Onehunga and Mt Eden were proving especially popular, she added.

Barfoot agents have sold 155 homes (worth $1 million or more) in these suburbs, a 63% increase on last year's numbers.

Herne Bay remains in first place for the most expensive suburb with an average sale price of NZ$1.35 million in the first six months of the 2012. Devonport (last year's fifth place finisher) comes in at second place with NZ$1.16 million while Epsom moved from number seven to three with an average price tage of NZ$1.06 million.

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18 Comments

by jh | 1st Aug 12, 5:51pm 1343800271

This applies to Auckland:

''While the other boom states have been driven by mining exports, Victoria's boom has been driven by high immigration,'' Birrell says. ''This created a buoyant economy, thanks to a rapidly-growing people servicing sector and migrant servicing sector.''

In other words, Melbourne is growing for the sake of growing, racing towards a population of 5 million, using other people's money. Just how big is that great sucking force from the south? Enormous. In the 2008-09 financial year, Victoria imported $70.2 billion in goods and services. It produced only $34.5 billion in exports, less than half its imports, a deficit of $35.7 billion.

Western Australia, by contrast, had exports of $94 billion in 2008-09 and imports of $42.8 billion, a mammoth $51.2 billion surplus. The equivalent of 70 per cent of that surplus ended up in Victoria as deficit spending. No wonder West Australians are in a state of outrage.

''Melbourne now requires increased financial assistance . . . to pay for its city building to keep up with all this population growth,'' Birrell says. ''Victoria's biggest export industry, by far, is education. But the boom in the overseas student industry is not going to last for long because of the federal government's crackdown on the vocational training industry.''

A great sucking force can be felt around Australia

by Your Landlord | 1st Aug 12, 9:28pm 1343813320

Incorrect jh. Auckland has much industrial and digital activity within its boundaries, not to mention the productive building sector.

Both Melbourne and Auckland will thrive and be positive influences on their respective nation's economies.

by moa man | 1st Aug 12, 9:40pm 1343814055

'digital activity within its boundaries', sounds like it's right up your alley, YL

regards

by Your Landlord | 1st Aug 12, 9:48pm 1343814531

I have invested in the digital economy moa man. But the returns were minimal compared to my usual investments.

Seems to me the more digital an industry the lower are the profits.

by Esprit | 1st Aug 12, 10:10pm 1343815834

Tell that to Sam Morgan!

by Your Landlord | 2nd Aug 12, 8:54am 1343854443

The same Sam Morgan who can't raise money for a fibre link?

by Your Landlord | 2nd Aug 12, 8:58am 1343854688

And what about Facebook then?

by Stephen Hulme | 2nd Aug 12, 10:07am 1343858820

productive building sector.

For Whom?

by Your Landlord | 2nd Aug 12, 10:30am 1343860216

For people like you and me Stephen... people who work in the industry, people who want to buy a house, people who want to rent a house.

by Stephen Hulme | 2nd Aug 12, 10:36am 1343860590

Unfortunately it is non-productive for me - the material prices are not reflective of acceptable free-market pricing but what I would consider a ringed price - NZ produced product sold in Australia is cheaper than here.

by Your Landlord | 2nd Aug 12, 10:39am 1343860786

If the industry doesn't build the houses, where are we going to live?

It must be productive, or we would all choose an alternative, whatever it is

Caves? Who knows...I don't.

by Stephen Hulme | 2nd Aug 12, 11:36am 1343864180

I have no problem with houses being built - just the practice of gouging the buyer - we need to consider making provision for legislation similar to The Racketeer Influenced and Corrupt Organizations Acts for building material costs.

by Stephen Hulme | 2nd Aug 12, 11:41am 1343864491

by David George | 2nd Aug 12, 9:29am 1343856554

Thanks for the link JH and the similarities with what's going on in Auckland are downright scary.

''Melbourne is a parasite economy,'' says Bob Birrell, the doyen of immigration and population studies in Australia. ''Increasingly, the fiscal dividend from Australia's mineral boom is having to be distributed to Victoria to pay for the needs of Melbourne's population boom. That's why the Victorian Premier, John Brumby, is constantly having to go cap-in-hand to the federal government for assistance.'' And Auckland? How does it stack up in the import/export balance? High immigration, failing port and industry, an economy increasingly based on $2 shops, taxi drivers, massage parlours and dog grooming and their hand constantly out to the rest of the country to fund it's infrastructure. The Government are obsessed with getting mining, farming, forestry, fisheries etc to get bigger - more efficient - more productive; industries that are already internationally competive and/or with limited upside potential. They seem to completly ignore the elephant in the room - the dismal performance of our largest city.

by speckles | 2nd Aug 12, 10:04am 1343858652

Agree and the stats. back you up however that population group has political influence.

by speckles | 2nd Aug 12, 10:04am 1343858656

Agree and the stats. back you up however that population group has political influence.

by scarfie | 2nd Aug 12, 9:05am 1343855123

Everyone had better jump in quick before they miss out and house prices leave them behind and destined to be tennants forever!

by SK | 2nd Aug 12, 9:46am 1343857583

Too late for Herne Bay and Westmere.

You should have given that golden advice a few years ago.

(without the hilarious sarcasm)