John Greenwood, who heads lifestyle & waterfront special projects for Bayleys, called off the auction of 3 coastal properties in December for the lack of genuine enquiry – and immediately started fielding calls about them.
Come February, sales of all 3 were negotiated.
Mr Greenwood said there was a change in the air after international politics played heavily in the last quarter of 2016 on decision-making to use surplus money buying luxuries like a holiday home in New Zealand.
“Buyers in the coastal market like to see some stability of the financial markets before entering into the purchase of bigger luxuries like a holiday home or second home, and tend to withdraw from making a decision or using their surplus funds until they can see 2 years of stability in the markets.
“With the events of Brexit & Trump offshore, and also the Australian banks tightening up on lending into the Auckland market, the enquiry basically disappeared in November & December.
“This resistance was across the board, from $1.5 million to $6 million the call was the same. However, in February the enquiry really jumped, with a very positive attitude to New Zealand’s position in the world and the state of the economy, all 3 of my withdrawn auction properties selling by negotiation in February in the price range of $2-2.5 million, and enquiry in this range has been stronger than ever from local buyers.
The enquiry in the higher bracket, however, is still very slow, with almost no enquiry locally over the $3.5 million level.”
The international market
“The media frenzy after the US elections, about Americans “flooding here in their droves” just wasn’t real. Yes, enquiry was happening, but in reality no noticeable real enquiry came out of the US until February.
“European enquiry, however, was quite strong, with buyers actually committing last year to coming to New Zealand specifically looking at lifestyle properties, and in February they came and had budgets in the $20 million-plus range.”
Mr Greenwood said Napier & Hawke’s Bay appeared to be the Europeans’ places of choice as they saw the infrastructure, the fact that there is a hospital (not one in the Bay of Islands or Queenstown) and that the towns have a well presented residential presence.
As for the American, he said enquiry had picked up, buyers were committing to coming and they had specific briefs: “Their budgets are from $5 million upwards, so hopefully this will give some impetus to the higher end of the market.”
Attribution: Agency release.