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New Zealand Lifestyle Property Market Sees a Decline in Sales Activity
The Real Estate Institute of New Zealand (REINZ) recently released data revealing that 1,256 lifestyle properties were sold between February and April 2023, compared to 1,792 the previous year – marking a 29.9% decline in sales volume. In addition to this, there were 100 more properties sold between March and April 2023, compared to February and March.
Shane O’Brien, Rural Spokesman at REINZ, states that this decrease in sales activity is not unique to just one market sector, as it’s an issue being faced across much of New Zealand’s neighbouring lifestyle property markets. The decline in sales volume can be attributed to the increase in interest rates and broader economic conditions affecting many potential buyers.
Uncertainty in the Market Affecting Most Sectors, Including Lifestyle Property
Despite strong numbers at open homes and enquiries on listings, many buyers are taking a ‘wait and see’ approach, rather than jumping in with both feet amid interest rate spikes and uncertainty surrounding the upcoming elections in the later part of the year. This general uncertainty is impacting most market sectors, including the commercial, rural and lifestyle property markets.
Median Prices for Lifestyle Properties Vary Across Regions
The median price for all lifestyle properties sold between February and April 2023 was $975,000, which was $102,000 lower than the previous year’s figure, marking a decrease of 9.5%. Of the different types of properties sold, the median price for farmlet lifestyle properties was $1,112,500, and for bare land properties, it was $390,000.
The Gisborne/Hawkes Bay (+17.6%) and Taranaki (+8.5%) regions saw the biggest increases in median prices for lifestyle properties, while the Bay of Plenty (-22.2%) and Wellington (-19.9%) experienced the most significant decline in prices.
Impact of Recent Policy Announcements
The subdivision of productive land and recent policy announcements have started to impact the bare land market’s flow onto the market. There are fewer listings and corresponding sale numbers across New Zealand.
Steady Enquiry from Auckland Buyers
Many South Island agents report that they are receiving steady enquiries from Auckland buyers looking to make a lifestyle change, particularly in Canterbury and Central Otago markets.
Regions Recording Increases and Decreases in Sales
Manawatu-Wanganui recorded an increase in sales compared to April 2022 with two more properties sold. Northland and Auckland have experienced the biggest decrease in sales between February and April 2023, compared to the same period in 2022, with -110 and -96 respectively. However, nine regions recorded an increase in sales compared to March 2023.
Longer Wait Time to Sell Lifestyle Properties
The median number of days to sell a lifestyle property increased from 43 in 2022 to 67 in 2023, marking an increase of 24 days – making Auckland and Canterbury the fastest-selling regions in April 2023, while Gisborne/Hawkes Bay and Otago (87 days) recording the longest time on the market.
