AFTER years in the doldrums, New Zealand's luxury home market has come back to the fore with wealthy buyers snapping up so much prime property that top-quality homes are now in short supply. This has changed the face of the high-class real estate market, which is now driven by the vendor, rather than the buyer. And with owners desperate to get value for money, they are increasingly ''trading up'' - swapping their house plus the cash difference - for a more expensive home, to get added value for relatively little cost. Real estate agents say this is happening because, while there was little difference in the style between a NZ$1 million (about HK$4.2 million) and $2 million home in the mid-1980s, the difference now was vast. Prices now were also more realistic, which has enabled buyers to avoid financing homes with high interest loans. The highest quality homes in the traditionally up-market areas of Auckland - Remuera, St Heliers and Parnell - are being sold for between NZ$1.5 million and NZ$2.5 million. Compared to Sydney, these prices represent excellent value with A$2 million being enough to buy a modest waterfront bungalow in Sydney, while the same money could buy a big house, with garden and pool, in the Auckland's best areas. But lower prices have led to a dwindling supply, which has forced many wealthy buyers to build, rather than buy. There have been a number of ''tear downs'' in Auckland, with fine homes being demolished to make way for specially designed homes. Asian investors have been quick to take advantage of the favourable conditions, with several quality homes being bought by emigrants from the region. A Taiwanese buyer recently bought a classic colonial home in Auckland's waterfront suburb of Orakei. He then promptly knocked it down and built a luxurious modern house.