Volatility Impacts The Total Market

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 122 less lifestyle property sales (-6.4%) for the three months ended January 2020 than for the three months ended December 2019. Overall, there were 1,799 lifestyle property sales in the three months ended January 2020, compared to 1,584 lifestyle property sales for the three months ended January 2019 (+13.6%), and 1,921 lifestyle property sales for the three months ended December 2019.

7,149 lifestyle properties were sold in the year to January 2020, 98 (+1.4%) more than were sold in the year to January 2019. The value of lifestyle properties sold was $5.81 billion for the year to January 2020.

The median price for all lifestyle properties sold in the three months to January 2020 was $725,500 and was $35,500 higher compared to the three months ended January 2019 (+5.1%).

Brian Peacocke, Rural Spokesman, at REINZ says: “The easing of sales volumes for the 3 month period ending January 2020 compared to the previous period is noted but those volumes were still significantly ahead of the January 2019 quarter (+13%) and again ahead of the equivalent 2018 figures (4.5%) so it is hard to read too much into that easing at this stage.

“What is of note, however, is the easing trend in volumes over the last quarter on a month by month basis in most districts.

“The only region to counter that trend, and only to a minor degree, is the slight increase in sales volumes from December 2019 to January 2020 in the Taranaki, Manawatu/Wanganui and West Coast regions.

“Whilst the Christmas/New Year holiday period may have had an influence in terms of fewer trading days, it is likely the mix of supply and demand plus the rigidity being demonstrated from within the financial sector has more to do with the emergence of this easing trend, ” he concludes.

Points of interest include the following:

• Upper North Island - significant easing of sales numbers in Northland and Auckland from December 2019 to January 2020 but a dramatic slump in volumes within the Waikato and Bay of Plenty regions; median prices have held or strengthened slightly, apart from an easing in the Bay of Plenty
• Central Regions – minimal activity in Gisborne, almost to the point of not registering; a marked drop off in Hawke’s Bay but a slight recovery to par within the Taranaki District; similar fluctuations in the median price, none of which are significant
• Lower North Island - a slight increase in results in the Manawatu District but a softening in the Wellington region where southern Wairarapa continues to display market resilience. Both districts have recorded a slight increase in the median price
• Upper South Island - a drop off in sales in the Nelson/Marlborough area but an acceptable increase in the median price; West Coast has scored well on both counts but Canterbury has been less fortunate with an easing in both volume and price, with the Waimakariri district being the dominant factor
• Lower South Island - easing volumes in Otago and Southland continues the national trend, particularly in relation to the median price where Southland has experienced a significant drop from both the previous quarter and 2 years ago; no district stood out in either province, this being in contrast to previous dominance by Central Otago.

Ten regions recorded an increase in sales compared to January 2019. Auckland recorded the most substantial increase in sales (+78 sales) in the three months to January 2020 compared to January 2019. Compared to December 2019, three regions recorded an increase in sales.

Eight regions saw the median price of lifestyle blocks increase between the three months ending January 2019 and the three months ending January 2020. The most notable examples were in Wellington (+26%), Gisborne (25%) and Manawatu/Wanganui (+20%) and the most notable exceptions were West Coast (-24%) and Hawke’s Bay (-17%).

The median number of days to sell for lifestyle properties was two days longer in the three months to January 2020than in the three months to January 2019, sitting at 58 days. Compared to the three months ended December 2019 the median number of days to sell was two days longer. Gisborne recorded the shortest number of days to sell in January 2020 at 42 days, followed by Manawatu/Wanganui (45 days) and Wellington (45 days). West Coast recorded the longest number of days to sell at 184 days, followed by Northland at 79 days and Taranaki at 72 days.

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