Bayleys news & articles

Joining the million dollar club

Tags: Residential Residential Views

While million-dollar Auckland suburbs are now commonplace, and there are a handful with an average selling price of more than $2 million, the rest of the country has hovered beneath that figure. Until recently, that is.

Aside from three Wellington city suburbs and one in Christchurch, Queenstown-Lakes District is the only other place in New Zealand with $1 million plus averages, and the halo effect has also been felt in nearby Arrowtown (at $1,366,295 on 77 sales over the past 12 months), Lake Hayes (at $1,195,458 on 56 sales) and Wanaka too (at $1,108,797 on 228 sales).

But they won’t be alone for long. A clutch of other suburbs in various regions look set to join the million-dollar club.

Do they represent a good opportunity to buy and benefit from a healthy capital gain? Certainly, if lifestyle factors are the motivation for any house purchase, the up-and-coming suburbs will tick that box, too. There’s a commonality across many of them – beaches, sea or lake views, and good access to outdoor experiences. For a buyer who wants to enjoy themselves while they wait for their home to increase in value, these hotspots certainly deliver.

As you would expect, the first suburbs nudging the million-dollar mark are in Tauranga:

• Mt Manganui at $885,662

• Bethlehem at $872,677

• Omokoroa at $861,853

These are the ‘lifestyle’ lovelies of the Bay of Plenty. Mt Manganui is an iconic resort suburb with its long white surf beaches and north-facing beach-front properties, while Omokoroa sits on a sea-encircled headland with marine activities aplenty. Bethlehem boasts an array of homes with executive-style homes on larger sections, clear favourites at the upper price bands.

If the annual median price rise for the Bay of Plenty for the past year of 10.1% is applied to the year ahead, those three areas may not reach the $1 million mark by next summer, but with growth predicted to continue, it could well be the summer after.

Classic holiday spots also feature strongly in the next wave of areas close to the million-dollar mark. Some of these have become sought after as permanent residences, perhaps by retirees, while a big slice of the action is still coming from city folk heading out for their holidays. For example:

• Russell in the Bay of Islands at $847,520

• Waihi Beach, in the western Bay of Plenty, at $828,010

• Mapua, near Nelson, at $813,659

• Mangawhai Heads, north of Auckland, at $794,830

• Lake Tekapo, in the South Island’s Mackenzie country, at $764,000

In Nelson, Stepneyville sale prices are sitting at $847,520 on 22 sales. With its panoramic views over Tasman Bay towards the Takaka Hills, the suburb sits between the city centre and Tahunanui Beach.

Many of the regions experiencing strong growth have attracted working age families and retirees keen on an improved lifestyle free of city traffic chaos. But a key driver is also property affordability. Some city migrants may sell their modest Auckland three-bedder for $1 million and spend the same amount on a larger, better home in the regions. But many home-hunters split the difference, choosing a better home close to schools, shops and amenities, but one that costs less than their city abode. They are probably not flocking to the pricier regional suburbs.

So while regional hotspots like the Waikato, Whangarei and Hawke’s Bay have been growing, they are still some way off having million-dollar suburbs. The closest they get are:

• Flagstaff in Hamilton, at $805,188

• Whangarei Heads (more of a bach destination) at $723,029

• Poraiti in Napier at $700,289

If you’re looking for indicators of areas that will see good property price growth, look for a good beach or picture-postcard lake close to classic kiwi lifestyle attractions and not far from city-style amenities. Sounds a bit like the whole of New Zealand!

Related articles