New Zealand’s super prime residential market update in 60 seconds.

Biggest trends

Wider residential market starting its recovery

Independent forecasters are typically predicting house prices will rise over the next two years. Strong migration and constrained housing supply are likely to continue to drive long-term price growth. In the short-term, price growth has been constrained by the impact of high supply of homes on the market for sale.

Interest rates the one to watch

The Reserve Bank has recently lowered interest rates, with further reductions anticipated over time. Interest rates remain a key pressure point for buyers so the future pathway for rates will likely be the main influence on house prices in the short-term.

Super prime properties tempered by softer market

The super prime market has faced a similar correction to the mainstream market. While super prime buyers are typically well capitalized, they often have wider interests such as businesses and investments that have been impacted by the cost of debt and wider economic outlook.

Outlook for the market

Auckland and Otago lead the way

Auckland and Otago (Queenstown-Lakes) were the most prominent regions for super prime sales. In most regions, super prime sales are clustered within key suburbs.

Water, water, water

Waterfront locations, water views and swimming pools are common features across super prime properties. Other features like tennis courts are less common than anecdotes would suggest. Some features show a substantial variation across the regions.

Super prime buyers often keep it local

While out of region and overseas buyers play a greater role in the super prime market than the mainstream market, analysis of buying patterns shows the buyers for super prime properties are often already living in the local neighbourhood.

View full report here.