Auckland Continuing to Lead Lifestyle Market

Auckland Continuing to Lead Lifestyle Market

Summary

Data released today by the Real Estate Institute of NZ (“REINZ”) shows there were 584 more lifestyle property sales (+37.9%) for the three months ended October 2015 than for the three months ended October 2014. Overall, there were 2,123 lifestyle property sales in the three months ended October 2015, compared to 2,075 lifestyle property sales for the three months ended September 2015 (+2.3%), and 1,539 lifestyle property sales for the three months ended October 2014. 7,797 lifestyle properties were sold in the year to October 2015, 23.1% more than were sold in the year to October 2014. The value of lifestyle properties sold reached a new record of $5.726 billion for the year to October 2015.

The median price for all lifestyle properties sold in the three months to October 2015 rose by $20,000 to $525,000 compared to $505,000 recorded for three months ended October 2014 (+4.0%). The median price fell 1.9% compared to September.

“Sales volumes for the three month period ending October 2015 have again reached record levels, with reports from some regions indicating increased interest in the lifestyle market as a result of higher pricing in the residential sector”, says REINZ Rural Spokesman Brian Peacocke.

Highlights include:

• A healthy market in Northland with prices steady;

• An easing of volumes in the Auckland region albeit an active market both in the regions north of the city and Pukekohe to the south, particularly in the $1m - $2m range. Reports indicate a shortage of supply for bare land with 1 hectare blocks being pushed to the $500,000 range. There is especially strong interest in land likely to gain consent for subdivision, with designated Special Housing Areas (SHA’s) being a particular point of focus;

• Good growth in sales volumes in the Waikato with a steady market indicating purchasers are carefully completing due diligence, strong activity up to $1m on the northern to north eastern fringes of Hamilton, with evidence of a distinct shortage of bare land for building purposes;

• A strong lifestyle market in the Bay of Plenty where the new motorway between Tauranga and Te Puke has created easier access therefore increased demand in areas slightly further from the city. Shortage of listings is becoming an issue;

• A noticeable trend throughout the central region (Waikato / Bay of Plenty) has been an easing in auction activity where there are reports of a reduction in clearance rates to 30 % of properties offered being sold under the hammer;

• A buoyant market in Hawkes Bay with a mix of local purchasers interspersed with outside interests. Demand is currently outstripping supply with an expectation that prices are likely to increase as a result; good activity in the $700,000 to $1m range, with some quality properties getting support around $1.5m;

• Increased sales volumes in the Manawatu / Wanganui and Wellington regions indicating an ongoing solid market in the lower North Island;

• Healthy activity in the Nelson / Marlborough province which is enjoying the spin-off benefits from a vibrant viticulture industry and a solid pastoral farming sector;

• In tandem with the slowdown in the Christchurch city rebuild, a corresponding easing in sales volumes in the Canterbury region, apart from solid pockets of activity around well established provincial centers; and

• A steady, albeit unspectacular market in the Otago and Southland areas which are emerging from an extremely long cold winter and early spring, the exception being some very solid sales in the $1.2m to $2.3m range in the Queenstown – Lakes district.

10 regions recorded an increase in sales compared to October 2014. Waikato recorded the largest increase in sales (+161) in the three months to October 2015 compared to October 2014, Northland saw an increase of 122 sales and Auckland an increase of 105 sales. Compared to September 2015, nine regions recorded an increase in sales with five regions recording a decrease.

The national median price for lifestyle blocks rose by $20,000 (+4.0%) from $505,000 for the three months to October 2014 to $525,000 for the three months to October 2015. The median price for lifestyle blocks in Auckland rose by $160,000 (+18.3%) from $875,000 for the three months to October 2014 to $1,035,000 for the three months to October 2015 to reach a new record high. Over the same time period, the median price fell by 4.0% in Waikato to $470,000, and rose by 2.7% in Canterbury to $580,000. Compared to September 2015 the national median sales price fell by $10,000 (-1.9%).

The median number of days to sell for lifestyle properties improved by three days, from 70 days for the three months to the end of September to 67 days for the three months to the end of October. Compared to the three months ended October 2014 the median number of days to sell improved by 15 days. Gisborne recorded the shortest number of days to sell in October 2015 at 31 days, followed by Auckland at 39 days and Canterbury at 52 days. West Coast recorded the longest number of days to sell at 142 days, followed by Taranaki at 138 days, and Otago at 123 days.

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