Lifestyle block prices still soaring

REINZ says national median lifestyle block rose by more than NZ$10,000 in past month to new record high of NZ$518,5000

Property

REINZ says national median lifestyle block rose by more than NZ$10,000 in past month to new record high of NZ$518,5000

17th May 13, 9:50am by David Hargreaves

<a href="http://www.shutterstock.com/">Image sourced from Shutterstock.com</a>

Continuing strong demand for a slice of the countryside to call your own has pushed lifestyle block national median prices up to a new record NZ$518,500 in the three months to April .

This surpasses the previous three-monthly record of NZ$506,750 set only in March, according to latest figures from the Real Estate Institute.

In March the REINZ had said that the lifestyle block market was benefiting from the activities of so-called 'land-bankers' seeing future growth opportunities in the Auckland and Waikato regions.

The April figures show that the national median price for lifestyle blocks is now some NZ$58,500, or 12.7%, higher than in was at the same time a year ago. The gains in the lifestyle block market are actually far outstripping those in the housing market - which itself is said to be booming.

Housing market figures for April released by REINZ earlier this week showed that the national median was up 7% compared with the same time a year ago.

The price surge in the lifestyle block is being fuelled by high levels of activity.

There were 1696 sales recorded nationally in the three months to April, which is some 237, or 16.2% more than the same time last year. For the year to April, there were 6092 lifestyle block sales, up 16.1% on the figures for the year to April 2012.

REINZ rural spokesman Brian Peacocke said activity in the lifestyle sector remained sold across the country, with Auckland, Waikato and Canterbury being the most active regions.

There were 412 sales in the Auckland area during the three months to April, which was up 156, or 60.9%, on the number sold at the same time last year. The median price in Auckland remained at NZ$805,000, where it was in March and is still below the record for Auckland of NZ$842,500 established in June 2007.

"The lifestyle market in Auckland is benefiting from the strong urban residential market, with some spill over effects from Auckland into the Waikato market where local demand is being boosted by expats returning and demand from Auckland," Peacocke said.

There was, he said, an emerging shortage of properties in the NZ$900,000 to NZ$1 million range in Waikato. In Canterbury demand was strongest in the NZ$600,000-NZ$700,000 range, with slower activity in the higher price bracket.

The question of whether Auckland should spread 'up or out' has become a vexed one, with the Government and the Auckland Council taking strongly opposing views. If Auckland's existing metropolitan limit were to be "smashed" as Housing Minister Nick Smith has suggested there could be much to be gained in investment in outlying areas.

Last Friday the Government and the council had appeared to resolve their impasse with the announcement of an accord that would target an extra 39,000 houses over the next three years.

However, the council yesterday questioned some of the details contained in the legislation the Government is now rushing through to activate the Auckland accord and future yet-to-be-agreed settlements with other councils.

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6 Comments

by waymad | 17th May 13, 10:25am 1368743103

Well, lemme just tee up the Broken Record for another spin. Right.

RPM - check.

No dust on needle - check.

Lower needle - check

The popularity of lifestyle blocks is a direct response to the relative unavailability of, and exceedingly high price of, serviced urban plots.

There are roughly 175,000 lifestyle blocks scattered around the larger cities in NZ.

Auckland - every direction.

Wellington - the Wairarapa,and the West Coast (Plimmerton to Foxton)

Christchurch - all directions

The agricultural production from these blocks is negligible.

The commute distance for these blocks is typically 50-80km.

The average lifestyle block is of the order of 1 to 3 ha (a typical urban plot is 0.06 ha or 600 sq m)

The average lifestyle block is serviced as to power and water, but disposes its own sewerage on site.

Few lifestyle blocks have public transport connections in a reasonable distance, of a type suitable for business commuting.

Most lifestyle blocks therefore have heavy dependence on private, fossil fuelled vehicles, with low vehicle occupancy.

And yet most common taters wail about the Weevils of Urban Sprawl......and uphold the Sanctity of MUL's, RUB's and other squiggles on Planning Maps.

Funny ol' world, innit.

by Beachside | 17th May 13, 12:20pm 1368750016

What a load of rubbish. This shows the danger in analysing statistics without a working knoweldge of what is actually taking place on the ground. I am a registered valuer on the northern outskirts of Auckland, and can assure you lifestyle block prices are not 'soaring'. While the residential market (especially the lower priced stock) has seen solid gains, lifestyle blocks have been generally flat for the past 3 years after declining in 2008/2009. There has certainly been more activity of late, and banks relaxing of lending criteria for this sector has been beneficial. In terms of value, bare blocks have perhaps lifted 5% if any in the past 6 months. At the upper end of the market (over $1m) the market is still tough with no noticable gains in the past year...

by scarfie | 17th May 13, 6:53pm 1368773597

Thank you Beachside, you back up what I said last time this subject came up. This is pure spruiking as on the ground the market is stagnant.

by redcows1 | 17th May 13, 12:26pm 1368750399

Try selling one. Lots of interest but not much else, those in our area listed in the last 2 years are ALL still for sale.

by ex agent | 17th May 13, 1:16pm 1368753404

Redcows what would be the land area the general condition of the houses on them ,ie the properties in your area that are not selling. Where I live ,good executive low maintenance homes on say 3-5 acres close to the city are selling easily and for well above a million. The houses are generally newish with at least four bedrooms and would be architecturally designed. People are sick of noisy neighbours and want the privacy and space that you cannot get in town.

by redcows1 | 18th May 13, 1:54pm 1368842082

Yea inclined to agree with a fair bit of that. But PSA has given things a huge hit with perhaps some waiting for cheap orchards to appear. Your description also is of something that hardly rates as rural and certainly I could never have lived in.