Praneeta Mahajan
Hamilton, February 27, 2024
With the property market in the residential sector showing signs of slight improvement and reports highlighting the contribution of first-home buyers as the biggest contributors to the market through 2023, the market sentiment has shown improvement and optimism.
The rural property market, on the other hand, recorded a slight fall in January, with sales of both farms and lifestyle blocks in decline according to the month-on-month comparison of sales from December 2023.
The experts, however, are hopeful that even though the month-of-month numbers show a drop, there has been positive movement in the lifestyle segment when compared to January 2023 statistics, signalling that the markets are faring better than the numbers same time last year.
Word of Experts
Shane O’Brien, Rural Spokesman for REINZ said, “The number of sales of Lifestyle properties is back slightly from December 2023, primarily because much of the month was taken up by holidays but the number was up on the corresponding period in 2023 signalling a continued improvement in the market following trends in rising activity in the residential market across much of New Zealand.”
“A reduction in the sale of bare land properties was not unexpected, as buyers weigh up increased building costs and timelines along with a reduction in the number of blocks available as developers work through new government policies on developing productive land.”
“Although the volume of sales was only back slightly on the same time in 2023, it is a marked reduction in the total sales recorded for the same period in 2022, being back close to 50% by volume across New Zealand.”
What the numbers say
In the rural sector, the ongoing slide in sales has affected all farm types, with dairy farm sales halving in the last year, dropping from 86 over the three months to January 2023 to 43 in the three months to January this year. Finishing farm sales dropped from 100 to 69 over the same period, grazing farm sales declined from 102 to 55 and horticulture properties dropped from 21 to 9.
According to the report issued by the Real Estate Institute of New Zealand (REINZ), there were 91 fewer lifestyle property sales (-7.2%) for the three months ended January 2024 than in the three months ended December 2023.
Overall, there were 1,166 lifestyle property sales in the three months ended January 2024, an increase from the 1,127 lifestyle property sales for the three months ended January 2023 (+3.5%), and 1,257 lifestyle property sales for the three months ended December 2023.
In the year to January 2024, 5,273 lifestyle properties were sold, a decrease of 1,017 (-16.2%) from the year to January 2023. Lifestyle property sales totalled $5.79 billion for the year to January 2024.
Median Price dips
The median price for all lifestyle properties sold in the three months to January 2024 was $950,000, which was $80,000 lower compared to the three months ended January 2023 (7.8%). The median price for Bare Land Lifestyle properties sold in the three months to January 2024 was $420,000, which was $44,000 lower compared to the three months ended January 2023 (–9.5 %). The median price for Farmlet Lifestyle properties sold in the three months to January 2024 was $1,060,000, which was $110,800 lower compared to the three months ended January 2023 (–9.5 %).
The positives
On the plus side, Nine regions had an increase in sales compared to January 2023, with Manawatu-Wanganui (+19 sales) and Nelson/Marlborough (+19 sales) showing the greatest increases. Auckland (-50 sales) and Waikato (-8 sales) saw the greatest decreases in sales in the three months to January 2024 compared to the three months to January 2023.
Sales increased in three regions compared to the three months to December 2023. In five regions, the median price of lifestyle blocks increased between the three months ended January 2023 and the three months ended January 2024. The most notable increases were in Wellington (+19.4%) and Southland (+11.3%), with the largest decreases in Gisborne/Hawkes Bay (-25.8%) and West Coast (-13%).
The median number of days to sell for lifestyle properties increased by 13 days in the three months to January 2024 compared to the three months to January 2023, reaching 65 days. Manawatu-Wanganui (55 days) had the shortest number of days to sell in January 2024. The West Coast had the longest number of days to sell (84 days).
Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.
