Market Momentum Eases

23 April 2021

Data released today by the Real Estate Institute of New Zealand (REINZ) shows there were 486 less lifestyle property sales (-20.0%) for the three months ended March 2021 than for the three months ended February 2021. Overall, there were 1,946 lifestyle property sales in the three months ended March 2021, compared to 1,794 lifestyle property sales for the three months ended March 2020 (+8.5%), and 2,432 lifestyle property sales for the three months ended February 2021.

8,974 lifestyle properties were sold in the year to March 2021, 1,785 (24.8%) more than were sold in the year to March 2020. The value of lifestyle properties sold was $8.60 billion for the year to March 2021.

The median price for all lifestyle properties sold in the three months to March 2021 was $850,000 and was $140,000 higher compared to the three months ended March 2020 (+19.7%). The median price for Bare land Lifestyle properties sold in the three months to March 2021 was $425,000 and was $95,000 higher compared to the three months ended March 2020 (+28.8%). The median price for Farmlet Lifestyle properties sold in the three months to March 2021 was $1,003,500 and was $153,500 higher compared to the three months ended March 2020 (+18.1%).

Brian Peacocke, Rural Spokesman, at REINZ says: “The predominant message from the sales figures relating to the three month period ending March 2021 is that the recent escalation in volume and price has experienced a check; to what extent and for how long will be demonstrated in the months ahead.

“A healthy level of employment plus the low level of interest rates are two of the factors which should suggest the market will remain reasonably buoyant.

“Equally, the reduction in the time from listing to sale would suggest stocks are tight, another factor likely to ensure a degree of momentum in the marketplace for the short term at least. Whatever the case, time will tell,” he concludes.

Relevant Points within the New Zealand marketplace include:

• Upper North Island - A significant reduction in sales numbers across the upper to mid North, with Northland, Auckland and Waikato all experiencing a similar impact. To the south and east, the Bay of Plenty demonstrated a greater degree of resilience. Interestingly enough, the reverse applied to the medium price with Northland being the strongest of the group

• Central North Island - Similar results in Taranaki, Gisborne and Hawke’s Bay where a 25% reduction in volume was the norm. The median price suffered accordingly

• Lower North Island - the trend continued throughout Manawatu/Wanganui/Wairarapa and Wellington with the main variation being a further reduction in volumes from the equivalent periods and both 2020 and 2019

• Upper South Island - Nelson/Marlborough/Tasman remained reasonably solid as was the case in the West Coast, and in contrast to most other regions, each district improved in both volumes and the median price; Canterbury results showed an easing from the previous month but a healthy gain in volumes from the equivalent period in 2020 and 2019

• Lower South Island - Both Otago and Southland suffered a significant drop in the number of sales recorded for the current period. However, Otago demonstrated greater resilience in maintaining its median price than was the case with its southern neighbour, albeit by a small margin.

Seven of the thirteen regions recorded an increase in sales compared to March 2020 with Auckland (+95 sales) and Canterbury (+66 sales) observing the biggest increases. Manawatu-Wanganui recorded the largest decrease in sales (-24 sales) in the three months to March 2021 compared to the three months to March 2020. Compared to the three months to February 2021, no regions recorded an increase in sales.

Eleven of thirteen regions saw the median price of lifestyle blocks increase between the three months ending March 2020 and the three months ending March 2021. The most notable examples were in Gisborne/Hawke’s Bay (+46%), Manawatu-Wanganui (+44%) and Otago (+34%) with the biggest decrease being in West Coast (-10%).

The median number of days to sell for lifestyle properties was 15 days less in the three months to March 2021 than in the three months to March 2020, sitting at 55 days. Compared to the three months ended February 2021 the median number of days to sell was four days longer. Manawatu/Wanganui recorded the shortest number of days to sell in March 2021 at 39 days, followed by Wellington (41 days). West Coast recorded the longest number of days to sell at 103 days, followed by Taranaki at 65 days.

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