All 13 regions are showing dramatic reductions in sales volumes from the levels of two years ago, data shows
The New Zealand lifestyle market has continued to cool down, with the latest Real Estate Institute of New Zealand (REINZ) data showing a 27.8% drop in the number of lifestyle property sales for the three-month period ending Oct. 3 (1,242) compared to same period the prior year (1,720).
In the year to October, 7,247 lifestyle properties were sold – that’s 29.4% fewer than the 3,016 sold from the equivalent period 12 months ago, and down 54% on the volume of sales achieved during the same period two years ago. The value of lifestyle properties sold for the period was $9 billion for the year to October.
The median price for all lifestyle properties sold in the three months to October 2022 was $1,015,000. This was up 7.7% compared to the $72,750 in the three months ended October 2021. During that period, bare land lifestyle properties sold for the median price of $470,000 – $1,000 higher compared to the three months ended October 2021 (0.2%). Farmlet Lifestyle properties sold, meanwhile, for the median price of $1,190,000 – down $12,469 compared to the three months ended October 2021 (-1.0%).
The “significant reduction in sales strongly mirrors the situation being experienced in the residential market,” said Brian Peacocke, rural spokesman at REINZ. “So, what is driving the reduction? Clearly, among the raft of influencing issues, one of the major factors is inflation and the resulting increase in the official cash rate, which is driving up interest rates. Issues relating to the levels of equity, cash flow and serviceability for potential borrowers are being heavily impacted by the increasing interest rates, which in turn are heavily impacting sales volumes across the country.
Lifestyle property sales across regions
Only two regions recorded a lift in sales compared to the three months to October 2021 – Taranaki (+7 sales) and Southland (+3 sales). The biggest decreases posted, meanwhile, were from Canterbury (-147 sales) and Waikato (-103 sales).
The median price of lifestyle blocks rose between the three months ending October 2021 and the three months ending October in 12 regions, with West Coast (+79.6%) and Canterbury (+30.1%) the most notable examples. Auckland (-5%), meanwhile, saw the biggest decrease.
Lifestyle properties sold for six median days more in the three months to October than in the three months to October 2021, sitting at 56 days. Southland posted the shortest number of days to sell in October 2022, at 37 days, while Bay of Plenty recorded the longest number of days to sell, at 70 days.
“Seven of the 13 regions across the country are showing a drop in sales volumes from last month, 12 of the 13 regions are showing a drop from 12 months ago, Taranaki being the only exception,” Peacocke said. “Finally, 13 out of the 13 regions are showing dramatic reductions in sales volumes from the levels of two years ago.”
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