Almost one in three residential properties sold in New Zealand now sells for more than $1 million.
Figures from the Real Estate Institute of NZ show 14,776 properties sold above the seven-figure threshold in the first half of 2021, about 32% of all residential property sales.
By comparison in the first half of 2019 fewer than 5,000 properties sold for more than $1m – 12% of the total sales in that time.
A $1m price tag has gone from being a relatively uncommon sale – about one in eight – to something much more run of the mill, moving many properties out of the reach of the average first home buyer in the process.
Even if first home buyers can come up with a 20% deposit – a whopping $200,000 – the $800,000 mortgage is about 7.5 times the average household income of $107,000.
A debt-to-income ratio of five is considered the upper limit of what is manageable.
To achieve that with an $800,000 mortgage would require a household income of $160,000.
Rising tide lifts all regions
While Auckland still has the lion’s share of $1m+ sales – about 67% in the first half of 2021 – other regions, in particular Wellington and Waikato have also been increasing their share of big sales.
In all parts of the country, the number of $1m+ sales have at least doubled and in most cases tripled since 2019.
The biggest increases have been in Marlborough (up more than 500%), Manawatu-Whanganui (463%), Taranaki (372%) and Waikato (340%).
Things have been much more measured in the wider South Island, with the number of sales in the Otago region merely doubling and Canterbury having a 173% increase.
At the top end of the market, the number of houses going for more than $3m and $5m has quadrupled since 2019.
Almost 600 properties fetched at least $3m in the first half of 2021, up from 142 in the equivalent period in 2019 and 192 in the first half of 2020 (a lockdown impacted figure).
Of those 100 sold for more than $5m. Auckland accounts for 85% of these sales ahead of the Otago and Bay of Plenty regions.