Hey big spenders
How NZ’s rich are splashing out in a Covid world
Kiwis’ offshore spending has dropped by billions of dollars, leaving more money in their pockets to spend at home. Now that New Zealanders can’t travel overseas, we find out who’s benefiting from all that spare cash.
Estate agents in popular beach spots can’t quite believe their postCovid luck. Used to mid-winter lulls as Kiwis escape to warmer climates, business is at a summer-busy level. Their main problem is they can’t get enough stock.
When beach houses do come on the market, interest is high and vendors often receive multiple offers, driving prices up. Kiwis with money in their pockets and nowhere to go are opting for a slice of heaven by the beach instead.
Like estate agents, retailers and businesses emerged from lockdown wondering what business in a pandemic-threatened world would look like. Since then, some industries have done surprisingly well; others are “cautiously optimistic”.
Reserve Bank figures show creditcard spending in New Zealand in June was $3.5 billion, just 3 per cent lower than June 2019. Overseas billings on New Zealand-issued credit cards was well down — $230 million, 59 per cent lower than June 2019.
Last year, New Zealand business travellers and holidaymakers spent $6.53b while travelling overseas, and holidaymakers spent nearly $1.9b on flights. It’s that unspent cash that New Zealand businesses hope Kiwis will spend at home.
And it appears they are. Kiwis blessed with chunks of disposable income are forking out thousands of dollars on motorhomes and caravans — a Wellington couple recently paid $650,000 for a luxury RV — beach houses, watches and jewellery, furniture, new and good second-hand cars, collectible art, luxury goods and home renovations.
Omaha estate agent Di Balich says inquiries from Aucklanders escalated after level one and the market has remained buoyant, helped by low interest rates.
“Everything that is coming on the market is getting snapped up.”
Kiwis are looking for a place to holiday locally with family and some buyers are looking for a bolt-hole close to Auckland in case the pandemic causes New Zealand to go into lockdown again, Balich says.
She thinks Covid has caused people to rethink their lives. Some buyers have brought forward their “10-year plan” to buy a place by the beach and edge towards retirement. Others have realised they can work some days from home, or a beach house, rather than commute to the office every day.
Whatever the reason, Balich is busy. She sold three Omaha properties in nine days recently and most properties are selling between 35 per cent and 60 per cent above council valuation.
This week a three-bedroom, one bathroom bach at Omaha, close to the beach but with no sea view, sold for $1.56m at auction. Five bidders were after it. The sale price was more than $500,00 above council valuation.
Whangamata Real Estate principal Murray Cleland says the market hasn’t slowed, even during lockdown. Rare beachfront properties will fetch $4.5m to $5m.
Sales are strong throughout the town, he says, as people opt to work from places such as Whangamata for a few days and go back to town when they need to.
“People realise that with modern communications you can actually sit here and watch the waves roll in and do your work.”
Harcourts, which has offices in Pauanui, Tairua, Whangamata, Cooks Beach, Whitianga and Coromandel, reports the same trends. Harcourts
Pauanui co-owner Alyce Rowe says sales have been exceedingly strong: “Since lockdown it’s really gone nuts. We’re experiencing sales volumes that are normally summer sales.”
Motorhome and caravan sales have also benefited from the new normal. New Zealand Motor Caravan Association CEO Bruce Lochore says like other industries, dealers were nervous post-Covid.
Instead, sales of motorhomes and caravans “exploded,” he says. As a result, he’s signing up about 150 new members a week to the association and expects to reach 100,000 in the next few months.
New buyers are paying between $70,000 to $80,000 for an ex-rental, to $200,000 to a $350,000 for more upmarket models.
Zion Motorhomes owner Jonas Ng says his sales have increased by 50 per cent.
Ng has sold more than 40 new RVs since May, some of them worth about $250,000.
One couple paid $650,000 for a top-of-the-range model. He has 200 more RVs on order from Germany, expecting demand to remain high while the borders are closed.
The new and second-hand car market is also holding its own. Statistics New Zealand figures show registration of new and ex-overseas car registration last month were only slightly lower than in June 2019.
New-car registrations for June are down by nearly 1400 but those in the industry say the lack of new rental-car sales has affected that figure.
The luxury end is not doing badly, either. In June, seven new Bentleys were registered, three Aston Martins, a Ferrari, two Lamborghinis, a McLaren, 159 BMWs, 209 Mercedes, 97 Land Rovers, 168 Audis and 93 Lexus and 68 Teslas. A new six-figure McLaren 765LT was ordered during lockdown, yet to arrive.
Winger Subaru at Greenlane branch manager Praveen Menon says clients are spending money on upgrading their cars or buying new with money set aside for overseas travel.
“New-car sales are up, which we weren’t expecting.”
He’s also detected that people are spending carefully, buying a latemodel BMW or a second-hand Maserati rather than a new model.
In Nelson, bespoke jeweller Benjamin Clark and his partner Amy Cunningham came out of lockdown wondering if their business, Benjamin Black Goldsmiths, would survive. But the past two months have been their best and busiest since opening in 2013, with higher sales than Christmas.
One of their most popular sellers are handmade silver, gold and platinum signet rings, often to mark special birthdays. They are now exporting the rings to Australia and setting up a new website to help handle the demand.
Graeme Thomson was also wondering if he would need to shut his antique jewellery shop in Parnell when the pandemic hit. He had a few items for sale on his website and was encouraged by how much business he did.
“I was really surprised that people will buy things without seeing them. I’m now getting an online shop.”
Post-Covid, Thomson is not selling the same number of items but customers are spending more.
“Instead of spending $5000 on a ring, they’re spending $10,000.”
Marcus Alexander, of About Time in Remuera, also kept up sales of vintage and collectible watches, particularly Rolex, during lockdown.
He had expected that online sales would drop away once the shop reopened. “They never did, they just kept going.”
For now, his business hasn’t been affected by Covid. His client base, mainly men and often buying their second, third or fourth watch for a collection, has remained firm. Nor has he had anyone coming in to sell a watch due to Covid hardship.
Art, too, is tracking well, with rare or collectible art fetching record prices post-lockdown.
International Art Gallery director Richard Thomson says the gallery held three online auctions during lockdown with prices reaching higher than expected levels.
A postponed auction held in May exceeded price expectations by 20 per cent, with $1.5m worth of paintings sold. Another auction this month was similarly successful.
Works by artists such as Banksy, Gordon Walters and Don Binney are fetching record prices, he says.
After weeks in lockdown staring at the cracked bathroom tiles, New Zealanders got busy giving their homes a facelift.
Although the value of building consents in May this year was down to $161m compared with $215m in May 2019, those in the industry say new exemptions to the Building Act mean low-risk buildings, such as sleep-outs, sheds and carports, won’t need consent in the future.
In June, Kiwis spent $5.76b on retail goods. One of the largest rises was for furniture, hardware, DIY supplies, appliances and recreational goods, an increase of $310m (24 per cent ) compared to June 2019.
Plumbing World marketing manager Sarah Vining says sales in June were up on last year and website traffic was up by 60 per cent.
Popular products are freestanding baths and coloured tap wear in gold, copper or black, following European trends.
“People can’t go off to Fiji or Europe so they’re investing back into their homes.”
Bunnings has also noticed increased demand for DIY power tools, paint — particularly for kitchen bench tops and cupboards — storage products, lighting, plants and landscaping products.
Registered Master Builders chief executive David Kelly says there has been an upsurge in inquiries about renovations and extensions.
Part of that business was driven by people wanting to work at home more permanently.
“It’s all very well working off the kitchen table but after a while that gets quite frustrating.”
Refresh Renovations global CEO Lal Meyer says inquiries for project management of household renovations are up 30 per cent on this time last year and the value of the work is up by 20 per cent.
Kiwis have also been pampering themselves after lockdown. Cordis, Auckland, PR executive Aia Jawad says locals have been treating themselves to high tea with their families, weekend “vacations” and luxury treatments at the hotel’s Chuan Spa.
Real Housewives of Auckland star and champagne importer Anne Batley Burton and her husband Richard had planned to leave Auckland last month to spend a couple of months at their house in France. Instead, they plan to do road trips through New Zealand, staying at exclusive spots such as Huka Lodge.
Batley thinks Kiwis are ready to party after lockdown. Each year she holds a Champagne Lady Ball to raise money for the New Zealand Cat Foundation and is normally chasing contacts to buy the $175 tickets.
Instead, this year’s October ball at the Northern Club sold out almost immediately and Batley has a list of people “desperate to come”.
Her sales of Jacquart champagne and fine imported wines are well up, too.
“I’ve sold over double what I would have done this time last year.”