How the other half live: What’s going on in the mansion market?
For most of us, mansions are houses we see and wish we could afford, but never will. But despite their desirability, mansions and luxury real estate are not immune to the ebbs and flows of the property market.
According to an analysis of Real Estate Institution of New Zealand figures by Paterson Luxury Real Estate, only 152 properties valued at $5 million or more changed hands in 2024, down from 335 in 2021.
However, real estate agents say a lull in the market might soon come to an end.
What exactly is a mansion?
Terry King, owner of Remuera Real Estate Register, said it was hard to define exactly what made a mansion, a mansion.
However, his interpretation was that a mansion was a house less than 1% of the population could afford to buy, or properties over $20 million. To the other 99%, a mansion was “something that will always be like a dream in the sky”, or unattainable.
Additionally, the word mansion encapsulated the house and its premium features, such as a tennis court or swimming pool.
“It’s not just the price of the house, it’s what houses cost to maintain. When you have a house that is worth a lot of money, then to keep its value as an asset, you need to have considerable funds each year to reinvest in the upkeep of the property,” King said.
How long does it take to sell a mansion?
At present, houses on the market around the $20m mark were taking about 18 months to sell, King said.
Graham Wall, of Wall Real Estate, agreed: “Everything takes twice as long to do, to sell an expensive house these days.” The exception, however, were houses that were “perfect” without buyers needing to spend any money on fixing or upgrading them, Wall said.
He recently sold a 10-12 year old, perfectly maintained house in Mission Bay for “well over $20m” in just 10 days. “We probably could have sold it two or three times over. There was plenty of buzz for this house.
“You can sell a house like that in any environment. That’s how easy it is when you’ve got a great house.”
Meanwhile, King was marketing a Remuera property with a $32m price tag, which had been on the market since February 2024. He described it as “the nicest house in Auckland”, having been upgraded and added to since it was built 110 years ago.
“It’s like moving into a house that is almost new, when in fact it is 110 years old.”
What caused the lull?
Asked why the property wasn’t selling, King said it came down to “the state of the world at the moment”. There had been a lot of “nervousness” before and after the US election, regarding how Donald Trump’s presidency might impact the market.
“Anything that happens in overseas financial markets affects New Zealand.”
Wall added that a lack of urgency was to blame, with people unwilling to buy luxury real estate unless it’s exactly what they want. If a house isn’t perfect or up to date with state of the art electronics, sellers could expect to be waiting some time for their property to sell.
When will things turn around?
King was hopeful that there would be some action in the market again soon, with unease following the US election “rapidly coming to an end”.
The $32m Remuera mansion he was marketing had received interest from people living off shore, which was encouraging. One person who contacted him on Monday would be flying into New Zealand to view the property next week.
“We feel very positive about what’s going to happen in the next year or so.” Wall said he was “dangerously optimistic” about an upturn in the market, encouraged by a recent drop in interest rates.
“The thing that could have quite a dramatic effect on high value real estate in New Zealand would be a relaxation of the government’s foreign buyer ban.”
Talks of the ban being reversed during coalition talks in 2023 were shut down by NZ First leader Winston Peters. However, at the party conference in October 2024, Peters hinted he could be willing to compromise should foreign buyers be willing to invest big money into New Zealand.
Wall hoped the ban would be be reviewed or included in Budget 2025, to be revealed on May 22.