Ra-ra-Rawene
Earlier this year OneRoof broke the news that Jason Statham's Kiwi crib had sold for $28 million as part of a $56m deal that saw the owners of two very expensive Auckland homes swap keys and suburbs. The sales of the modern mansions on Rawene Avenue, in Westmere, and Ronaki Road, in Mission Bay, have just settled, and that got me thinking about price leaps at the top end of the market.
The four-bedroom trophy home on Rawene Avenue, which Statham famously rented while he was filming The Meg in Auckland, was built by rich-lister Sharon Hunter and former Tauranga mayor Tenby Powell.
The pair had secured two side-by-side sections on the tightly held street and then briefed Ponting Fitzgerald Architects to create a luxury house on the 1978sqm waterfront site.
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It is a standout property. Ponting used concrete cast in rough cedar for the walls, fine steel joinery for the windows, and crafted cedar for the ceilings and finishes. Ponds that start at the front of the house weave through the property, finishing at the 17m infinity pool that hovers over the water.
Hunter and Powell sold the house at the end of 2020 for $17.68m, which means it jumped in value by more than $10m within the space of four-and-a-half years. That's unusual because the house is essentially the same one Hunter and Powell built and sold, and Auckland's average property value grew by just 4% over the same period.
British actor Jason Statham in The Meg. Statham rented the Rawene Avenue home while he filmed the shark thriller in Auckland. Photo / Supplied
The house was built by rich-lister Sharon Hunter and former Tauranga mayor Tenby Powell and designed by Ponting Fitzgerald Architects. Photo / Supplied
To get a 60% price leap outside of a hot market would typically require a complete overhaul of the existing property and lots of value-adds, including pools, tennis courts, extra land, and helicopter pads etc (like what Anna Mowbray and Ali Williams are trying to create a few houses along on Rawene Avenue).
OneRoof reporter Catherine Smith, who broke the $56m mansion swap story, was as curious as I was, and asked for insight from some of the country's leading prestige agents, including Bayleys' Sarah Liu, who stitched the deal together with colleague Nick Gilbert.
Here's what they had to say (good advice for any rich-listers looking to double their money):
Liu said the Rawene Avenue house was one of the best in Auckland and was located on a prime site. "The land value for the 2000sqm waterfront site is $15m to $16m and the 739sqm house would cost $20,000, $25,000 even $30,000 a square foot to build. But the key thing is that in some buyers’ eyes, a house is so special, they just want it. That's when prices go out the window.”
New Zealand Sotheby's International Realty agent Pene Milne: "I can’t imagine trying to build that house now, with today’s construction costs." Photo / Fiona Goodall
New Zealand Sotheby's International Realty agent Pene Milne, who has sold many luxury homes in the area, knows the house well. She worked with Hunter and Powell in 2006 when they were trying to buy the land. She told OneRoof the site was one of a kind.
“They [Hunter and Powell] had the vision. We had to get three owners to sell to create that site. All the other sites on Rawene, apart from the one on the end [owned by Anna Mowbray and Ali Williams] are long, narrow sections.
“I can’t imagine trying to build that house now, with today’s construction costs and the earthworks that went into it. It’s hard to know what those replacement costs would be today. Since I did the deal for them in 2006, there has been a build-up of appreciation for the street. It’s the most magical spot. It was phenomenal what Tenby and Sharon did.”
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She added: “The first waterfront home I sold on Rawene was in 2002 for $2.2m. It was unheard of then, but it seems very cheap now.”
Barfoot & Thompson agent Paul Neshausen, who deals with trophy estates in Auckland's Eastern Bays, told OneRoof that "sophisticated buyers" at the top end of the market rarely concerned themselves with the seller’s profit margin. "Their focus is on a legacy and a lifestyle, and these special houses resonate on an emotional level. What they’re looking for is identity, aspiration, a sense of belonging to an elite enclave," he said.
"Yes, there are good suburbs, but we’re talking about micro-markets – that house in that particular street. People don’t just buy a home, they buy a narrative that they want to be part of, and they’re willing to pay for it.
"It’s not financial; it’s aspirational, it’s status, and these buyers believe in long-term growth. They’re not fussed about the economy or what’s happening this year or next year. In ten years, they know the property will sell for significantly more than they paid for it."
Buy, buy, buy
The start of the month brings a whole heap of housing market stats, including from OneRoof. Looking at the direction of travel on prices, you could be forgiven for thinking that there was blood on the floor. Not to minimise anyone's pain or discomfort from selling at a loss, but the sales data does point to a vigorous market, driven by youngish first-home buyers, which is surely a good thing.
Barfoot & Thompson, Auckland's largest real estate agency, announced this week that sales for May were up 27.3% on April's tally, and up 17% year-on-year. Getting 1072 house sales across the line when values are dropping (the agency's median sale price for May was down 0.6% on April and 8% year-on-year) suggests the market is reaching a tipping point. Vendors know what they have to do to meet the budgets of those who are active in the market.
Barfoot & Thompson sales for May were up 8% annually. Photo / Fiona Goodall
Homeowners who put up the sale sign with realistic expectations are going to be in a better position than those who are holding out for Covid boom prices, no matter what segment of the market they are in.
That's more important than ever, with stock levels still at record high levels. Barfoot & Thompson noted this week that an extra 1855 homes hit the market in May (it's highest new listings tally for the month since 2016), bringing total listings at the end of May to 6083. On OneRoof, there were just over 13,000 homes listed for sale in Auckland at the time of publication. That's a lot to choose from.
Independent economist and OneRoof columnist Tony Alexander has been making this point for some time now. New Zealand is firmly in a buyer's market, and buyers have time, price, and interest rates on their side.
"Is it all doom and gloom? Definitely not. This is almost exactly the environment tens, if not hundreds, of thousands of young couples have been dreaming of since house prices started soaring in the 1990s. Listings are plentiful, mortgage rates are at or near cyclical lows, investors in net terms are leaving the market, the Government is ensuring more development land and intensification zones are available, and there is little competition from net migration."
- Owen Vaughan is editor of OneRoof.co.nz. You can contact him with any property tips or story ideas at [email protected]
