Lifestyle Properties Shine In Rural Market

FOR IMMEDIATE RELEASE

News Release 14 April 2009

Lifestyle Properties Shine In Rural Market

Rural real estate buyers are coming back statistics released today by the Real Estate Institute of New Zealand (REINZ) indicate.

And the shining light of sector is the lifestyle property market that continues to appreciate with median prices for the three months to March 2009 almost a match for the corresponding period in 2008 ($448,500 March 2009 compared with $450,000 March 2008).

Further evidence of confidence in the lifestyle sector was demonstrated in the number of sales which are up nearly 20 per cent on last month’s figures – from 877 in the three months to February 2009 to 1041 in the three months to March 2009.

REINZ National Councillor and rural spokesperson Peter McDonald said lifestyle properties have performed comparatively well throughout the tougher months of recent times, but this month the better news is also shared by the traditional farming real estate market.

“We’re now seeing the market adjusting to the affordable and sustainable levels we saw in the same period in 2007 before the unrealistic spike in 2008 caused by the high Fonterra payout.”

The median price for farms sold in the three months to March 2009 was $1,175,000, very similar to the $1,195,000 seen in the three months to March 2007. With some notable regional price fluctuations caused by the low turnover, prices are relatively steady across most regions, with all but Hawkes Bay, Taranaki and West coast showing a drop in price values.

Turnover remains slow with just 231 properties changing hands in the rural sector in the three months to March 2009, down from 276 in the three months to February 2009 and a big drop from the 717 properties sold in the three months to March 2008.

The biggest drop in turnover is in Canterbury, down from 42 sales in the three months to February 2009 to 32 in the three months to March 2009 and Otago down from 31 to 21. Manawatu/Wanganui was down from 21 to 15 in the same period.

Nevertheless, Mr McDonald noted that recent dairy auctions attracted strong interest and competitive bidding which is a good sign, he said. Milk solids per kilogram remain steady at $48.

“With the small turnover in dairy farms it’s not realistic to state with total assurance the market has turned around,” Mr McDonald said. “But there are certainly signs of renewed interest in rural real estate and that’s great to see.”

ENDS

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