OneRoof's Property Rich List reveals where the wealthy buy in Rotorua. Photo / Felix Desmarais
OneRoof's Property Rich List reveals where the wealthy buy in Rotorua. Photo / Felix Desmarais
The region's richest are paying about 163 per cent more than the average property value in Rotorua's most expensive suburb, Lake Tarawera, new data shows.
In its annual Property Rich List, OneRoof and its data partner Valocity looked at how the growth of property values has tracked over the pastfive years within the top 1 per cent of the market.
In Rotorua, Lake Tarawera took the top spot with a 163 per cent - or $2,678,667 - difference between the top 1 per cent and the average property value.
The overall average value in the lakeside suburb was $1,648,000 but the average for the top 1 per cent of homes - the most expensive properties - was $4,326,667.
But Sunnybrook had the biggest gap between the top 1 per cent and the average property value at 344 per cent.
The suburb's overall average property value was $778,000 but the average value of the top echelon was $3,457,143.
Harcourts Rotorua director Wayne Pamment. Photo / Supplied
Harcourts Rotorua director Wayne Pamment said Lake Tarawera was a beautiful spot and highly desirable for the wealthy.
Pamment said Lake Tarawera had a wide range of sizes and quality homes from the traditional Kiwi bach to the "incredible elevated homes with all the bells and whistles".
There was not "too much movement" in sales but when a property sold it received "fantastic" results, including family baches that had been owned for generations.
The top 1 per cent of the market was performing "incredibly well", particularly in Ōhope Beach, he said.
"We have seen strong demand up until March and April this year for the top 1 per cent.
"We have had some record sales in the Ōhope market up to $4.5m. That was unheard of a few years ago. We have hit some new caps.
"We have not seen that horsepower in the market before."
Covid had played a part in strong demand for the top of the market sales as people sought a better work-from-home lifestyle at the beach or by the lake, he said,
"We have seen a lot of money coming from outside of the region."
Pamment said there was a wide range of buyers in the top 1 per cent of the market.
That included families who had released equity from large agricultural or horticultural businesses, or strong businesses with strong bank balances that had performed well over Covid, he said.
"We see a full range of people and it is not always who you think.
"It is not always chief executives of big companies. Many have worked hard and built portfolios or businesses and they want to live out the second half of their lives somewhere beautiful that meets the goals and dreams they had always had."
Rotorua Professionals McDowell Real Estate principal Steve Lovegrove. Photo / Andrew Warner
Rotorua Professionals McDowell Real Estate principal Steve Lovegrove said in the past five years Rotorua had become a destination for wealthy people from outside the city who were eyeing up premium lakeside properties.
"There are a lot of people who see it as a place of leisure."
Lake Tarawera, in particular, had "stunning, natural beauty".
"Over the last five years the rules have changed for investors and there has been a small percentage of people who have chosen to invest in significant properties in a recreational area like that.
"There has been quite a lot of transition of wealth assets from providing rental to providing a little bit of luxury.
"There was a word once going around called the mansion effect. That is exactly what has happened in the last five years.
"For the more well-to-do in the market, it has become more noticed."
Lovegrove said buyers in the top 1 per cent of the market had been high-level executives looking for peace and quiet, or successful farmers, looking to retire.
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Heath Young. Photo / Andrew Warner
Managing director of the Realty Group Ltd, which operates Eves and Bayleys, Heath Young said well-located and well-presented bluechip properties near water tended to do well in most property markets.
"Since 2020, this market has been strong due to New Zealand being locked down, low-interest rates, buyers securing holiday homes versus travelling internationally and also buyers willing to pay a premium for well-built or renovated property rather than try and build themselves with all the issues impacting on construction over this time.
"Typical buyers have been a huge mix of business owners, farming families, locals and out of town and international buyers."
Property Brokers regional manager for the Bay of Plenty, Simon Short, said in the past five years the market had gone "gangbusters" across New Zealand.
"There has been some record sales at places like Lake Tarawera and Lake Rotoiti. But as we progress into a flatter market there may be a degree of vulnerability to some extent as those markets were surplus to requirement with many operating as baches or holiday homes."
Jacqueline O'Sullivan, principal and business owner of Ray White Rotorua, said Lake Tarawera was pretty exclusive and people buying for status would probably look there or nearby Lake Okareka.
People pay what they have to in order to get into certain locations, O'Sullivan said.
"The hidden gems are still the same that they have always been. Those are the locations like Lake Tarawera, Lake Okareka, Lake Rotoiti."
Valocity's head of research James Wilson. Photo / Fiona Goodall
Valocity's head of research James Wilson said it was often people seeking secondary or holiday accommodation who bought property within the top 1 per cent of the Rotorua market.
"That differed to larger main centres where there may be a higher proportion of high-end properties that transact differently to the rest of the market around them."
Since 2021, the Bay was only one of four regions - including Hawke's Bay, Marlborough, and Otago - that saw the top 1 per cent outstrip the value growth of the bottom 10 per cent and "bucking the national trend".
"This is potentially due to all areas where the top 1 per cent typically represent luxury properties, often purchased as secondary households by those who live elsewhere."
Additional reporting - Catherine Masters
Top 10 settled sales in 12 months to end of May 2022
Nov 1, 2021 Te Akau Rd, Okere Falls $4,650,000
Nov 1, 2021 Whangamoa Drive, Okere Falls $3,330,000
Sep 1, 2021 Gemini Place, Kawaha Point $2,250,000
Jul 1, 2021 Gemini Place, Kawaha Point $2,000,000
Feb 1, 2022 Koutu Rd, Kawaha Point $1,845,000
Nov 1, 2021 Wattle Grove Rd, Lake Okareka $1,785,000
