Rural prices reflect tight supply

Horse rider on hilltop, Pakiri Beach, Auckland. Picture/Supplied/GettyImages

Sales of rural lifestyle property are up but the market may be about to hit a dull spot, not least due to a lack of listings, says the Real Estate Institute.

According to its data there were 2175 lifestyle property sales in the three months ended October, compared to 2230 for the three months ended September 2016 (down 2.5 per cent), and 2123 sales for the three months ended October 2015.

In all, 9115 lifestyle properties were sold in the year to October, 17 per cent more than a year before. The value of lifestyle sales was $6.91 billion for the year to October 2016.

The institute says the median price for all lifestyle properties sold in the three months to October 2016 was $20,000 higher at $545,000 compared to the three months ended October 2015 (up 3.8 per cent). The median price rose $15,000 (up 2.8 per cent) compared to September.

"Sales volumes in the lifestyle market for the three-month period ending October 2016 remain strong but reflect a consistent easing over the past several months, says REINZ rural spokesman Brian Peacocke.

"Variable conditions are influencing the market but a shortage of supply is a constant theme, the net result being pressure on prices."
Regional highlights include:

Solid growth in volumes in Northland; an easing of volumes and shortage of supply in Auckland, Waikato, Bay of Plenty, Hawke's Bay and Taranaki, but a strong market in the Rotorua area where $900,000 is deemed average.

Peacocke says there is good activity in the $1.5 million to $1.7m range, and strong interest from Auckland purchasers up to $2m.

In the report, released before the earthquake on Monday, November 14, nine regions recorded an increase in sales compared to October 2015. Wellington recorded the largest increase in the three months to October 2016 compared to October 2015, Northland saw an increase of 44 sales and Manawatu/Whanganui an increase of 37 sales.

Compared to September 2016, four regions recorded an increase in sales. Compared to October 2015 the number of sales for the three months to October 2016 rose by 52 sales.

The national median price for lifestyle blocks rose by $20,000 (up 3.8 per cent) for the three months to October 2016 compared to the three months to October 2015.

The median price for lifestyle blocks in Auckland rose by $135,000 (up 13 per cent) from $1.035 million for the three months to October 2015 to $1,170,000 for the three months to October 2016.

Over the same time period, the median price rose by 31.9 per cent in Waikato to a new record of $620,000, and rose by 5.5 per cent to $612,000 for Canterbury.

The median number of days to sell for lifestyle properties improved by 11 days in the three months to October 2016 compared to the three months to October 2015 to sit at 56 days.

Compared to the three months ended October, the median number of days to sell improved by six days. Waikato had the fewest days to sell in October 2016 at 34 days, followed by Auckland at 42 days and Bay of Plenty at 48 days.

West Coast recorded the most days to sell at 200, followed by Nelson and Otago at 100.