REINZ says lifestyle block market is 'challenging' as sales decline to lowest level in two years

The malaise which has seen the housing market cool over summer also appears to be affecting the lifestyle block market, with sales volumes well down and prices flattening.

In the Real Estate Institute of New Zealand's latest report on the lifestyle property market, REINZ rural spokesman Brain Peacocke described the market as challenging, with loan-to-value ratio (LVR) mortgage lending restrictions affecting sales.

"All regions apart from the West Coast of the South Island have experienced significant reductions in sales volumes during January 2017, making this the lowest month for volumes over the last two years," he said.

The REINZ said 1959 lifestyle properties were sold in the three months ended January 2017, which was down 7.1% compared to the three months ended January 2016.

At the same time prices flattened, with the national median price hitting its record high of $583,000 in the three months to December last year and remaining unchanged in the three months to January this year.

REINZ's Regional Summary of Lifestyle Block Sales:

  • Northland / Auckland – reduced volumes with buyer uncertainty making it harder to get transactions across the line; often good initial response to new listings then interest tapers off; Government LVR rules are impacting on the market.
  • Waikato - a major reduction in sales volumes over recent months; listings in short supply but improving; Auckland purchasers remain active; strong subdivision activity in north Waikato.
  • Bay of Plenty - a 50 % drop in volumes over the last two months; strong prices for quality properties.
  • Hawke’s Bay / Manawatu / Wanganui / Taranaki – reasonable activity in the mid-price range with volumes holding closer to recent levels.
  • Wellington / Wairarapa – more consistency within the region with very strong demand in the Wairarapa where prices are lifting and some properties are selling within a week of being listed.
  • Nelson / Marlborough - a significant drop-off in sales volumes from previous months albeit prices remain strong.
  • Canterbury – some very strong sales at the top end of the market although stocks are limited; moderate activity in the mid-range and quieter at the lower end; volumes in total down considerably.
  • Otago – steady activity throughout the central region with strong prices in the Lakes district; reduced volumes but solid sales and prices around Dunedin.
  • Southland – close to status quo within the southern region with modest prices holding steady.

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6 Comments

Headline................ Good .......the market is correcting all round then .

The problem as i see it with lifestyle blocks is this,they buy vacant block for xx,build house on it for xx then try to sell it for xxxxxx.

I would think the problem is lack of supply. local listings have dropped from around 20 to 2 or so , and any thing desirable is sold before it hits the ads. Drop in price may be more to do with less desrable properties been sold.

We're looking at lifestyle blocks in the Waikato, there's no shortage of supply but the price expectation is pretty high from vendors. They've seen the rise and rise of property values in Auckland and Hamilton city and want some of the action. The starting point for something that isn't 100sqm or a drafty old workers cottage, has 3 bedrooms is minimum $650k

Here's some random examples of this disconnect:
http://www.realestate.co.nz/3010771
Listed for $749,000
https://homes.co.nz/app/homes/properties/6a2f90f6-df78-4a23-95bb-1962640...
Bought in 2012 for $480,000

This for me is probably worse as I'd class it as a flipper
http://www.realestate.co.nz/3010052
Listed for $700,000
https://homes.co.nz/app/homes/properties/c37d7481-ea49-4eb5-bd46-8e69d6d...
Bought 12 months ago for $350,000

On the ground we have looked at several properties, one was a large 40 year old house on 1ha. Hasn't been maintained well over the last 5 or so years (wall paper peeling off, threadbare carpet with carpet beetle etc). Chatting to the agent on how the initial asking price was set (>700k), bareland down the road sold for 300k, vendor has done the math on what it would sell for with a house and shed on and priced his accordingly. Needless to say it's been on several months with a price reduction before our cash offer (the first and only in writing) was turned down.

The houses we've been through are retirees needing to be in a rest home yesterday (different agents exact words). So on one hand the agents are telling us they've got health issues, want it sold yada yada yada but they've conditioned the buyer or at least agreed with them on expecting great things.

"The houses we've been through are retirees needing to be in a rest home yesterday (different agents exact words). So on one hand the agents are telling us they've got health issues, want it sold yada yada yada but they've conditioned the buyer or at least agreed with them on expecting great things."
I see nothing has changed in Real Estate world in the last 25-30 years, back then we called that "buying a listing" what do they call it now? It caused a great deal of suffering back in the late 80s after the crash. I had come up with a "ready reckoner" of sorts that I could calculate what a rural property should sell for, was scarily accurate, but way below what other agents would brazenly "buy" listings for. People would then have to pay maybe another year or more's mortgage payments before finally being forced to sell at close to what I had estimated.
I still reckon that thing would work today, if I could remember exactly how I did it.

Deleted was meant as a reply

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