New Competitor In The Luxury Market Comes All The Way From New Zealand
Not familiar with Auckland, New Zealand? Many people aren’t. But this picturesque island nation is garnering some serious attention. That’s because it just overtook Toronto as the world’s hottest luxury market.
New Zealand has a relatively lax attitude towards foreign buyers, and the prices of luxury homes are much more affordable than those being sold in larger cities like New York or Los Angeles (and the gorgeous natural scenery doesn’t hurt either).
It’s not just investors purchasing these homes though. The country’s strong economy and job growth has spurred immigration and has become an attractive option to expats looking for a second home.
As a result, sales of million dollar homes in Auckland have tripled over the past three years. The harbour city of just over a million people recorded 63 per cent annual growth in $1 million-plus home sales, reported The Wall Street Journal. “In Auckland, $1 million—the entry point for luxury here according to real-estate agents—would buy a three-bedroom, solar-powered eco home south of the city with district views.”
If Auckland has suddenly become an appealing city to you, you should know that New Zealand’s central bank recently imposed a rule that requires at least a 30% deposit for investment property loans in an effort to restrict a glut of foreign buying. And, pending legislation would heavily penalize investors who flip their property with two years of buying it. That being said, it a reasonably affordable and absolutely stunning place to purchase a second luxury property.
Even though it slipped to second place, Toronto’s luxury market continues to thrive and saw an extraordinary 48 per cent growth in year-on-year luxury home sales. Estates here stayed on the market for an average of 28 days last year, with strong governmental and investment systems, immigration and quality educational institutions playing key roles in keeping the market competitive.