Lifestyle market update
Over the past six months, most regions in New Zealand have seen a year-on-year increase in the median sale price for lifestyle properties, along with relatively shorter selling periods.
The average sale price of lifestyle property in most regions peaked last spring, but values have now started to ease back.
There’s no denying that the realities and long tail of the global pandemic have influenced – and continue to affect – the lifestyle property sector.
Rolling lockdowns and realising an urban home’s shortfalls for schooling and working from home for extended periods, the need for social distancing and a desire to be more connected to the land saw lifestyle property take on new appeal.
For some owners of lifestyle property, a mindshift also occurred with a reordering of priorities and a need to be closer to family in urban areas.
Enquiry levels for lifestyle property were up, people were selling, buying and moving when they could, and prices reflected increased activity.
While the attraction and dream of lifestyle living continues for many, there have been some fundamental and structural changes in the market.
The pandemic continues to have a sting in its tail, there’s interest rate pressure and tighter lending criteria on the back of the high inflation environment, and this has started to have an impact on sales volumes of lifestyle properties recently.
Days-on-market have generally increased, we’re seeing more conditional contracts being negotiated and, while deals are still progressing and being concluded, things are taking a little longer to come together.
While the latest Real Estate Institute of New Zealand (REINZ) statistics show a slowdown in lifestyle property activity compared to the prior year’s March quarter, we need to remember how far the lifestyle market has come in recent years and the enormous growth that has occurred.
According to REINZ, the value of the lifestyle market has almost doubled, and the number of transactions grown by 26 percent since March 2019, pre-pandemic.
Those fortunate enough to have entered the market through that period, will be enjoying the benefits of country living and with the work-from-home concept now well-embedded in corporate and business culture, together with the cost of fuel impacting a daily commute, living the lifestyle dream takes on new meaning.
So, while the market may be easing, we expect lifestyle property will remain reasonably resilient as a desirable asset class given the advantages it offers, and the limited amount of lifestyle-zoned land around the country.
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