Bayleys predict robust recovery in NZ's lifestyle property market this year
The Bayleys Rural Insight report outlined several key trends shaping the lifestyle property market.
Despite a slow start, market recovery is gaining momentum, buoyed by strong migration and ongoing constraints in housing supply.
These factors are expected to drive price increases over the next couple of years.
Recent data from REINZ revealed that, while sales activity slowed in the three months ending January with 1,390 lifestyle properties sold, a decline from the previous period, there was a significant year-on-year increase of 17.3%, indicating a robust longer-term market recovery.
Challenges with high inventory
Although there is a high volume of properties on the lifestyle property market, this abundance has led to reduced urgency among buyers, making it difficult to maintain their attention.
The lifestyle property market is experiencing steady demand for high-quality lifestyle properties across various price points.
However, buyer sensitivity to any perceived shortcomings in properties is on the rise.
Vendor expectations and pricing
A significant challenge remains with vendors setting price expectations above the current market rates.
The Bayleys report emphasised the necessity of honest appraisals, backed by recent relevant sale evidence, to set realistic expectations that are essential for successful transactions.
Future influences and connectivity
Interest rates are a pivotal concern for buyers, with recent reductions by the Reserve Bank and the anticipation of further decreases. The trajectory of these rates is likely to be a primary influence on the market in the short term.
Additionally, improved connectivity and the ongoing trend of remote working are enabling a broader range of buyers to consider lifestyle property ownership, expanding the geographical areas of interest due to reduced sensitivity to commute distances.
Regulatory watch
Lifestyle property owners are keeping a close eye on government regulatory changes and investment priorities.
Particularly, zoning regulations and the availability of infrastructure to support development on urban fringes are areas of focus for stakeholders in the sector.
The combination of a recovering market, evolving buyer behaviours, and strategic economic factors sets the stage for an interesting year in New Zealand’s lifestyle real estate sector, Bayleys said.
Access the Bayleys rural market report here.
