Lifestyle Property Bounces Back
Lifestyle properties, which provide home owners with space, quality of life and other benefits have retained their appeal despite the economic downturn. Ian Little, Bayleys Research senior analyst, overviews this sector of the property market.
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Despite the connection with the countryside, lifestyle property market trends have more closely followed those of the wider residential market than that of the rural market over the past two years. While farm sales prices, bolstered by record dairy farm values, continued to rise through the first half of last year and sales activity remained strong until the second half of 2008, the lifestyle property sector – along with the residential market – was witnessing a major downturn in activity. The volume of national lifestyle property sales peaked in the June quarter of 2007 at 2,041 sales, according to Real Estate Institute of New Zealand (REINZ) statistics. Median prices topped out at $455,000 in the final quarter of 2007. From the middle of 2007, sales activity headed on a substantial downward spiral until bottoming out in |
the last quarter of 2008 when the three monthly sales figure totalled 959 sales – less than half the market peak of 18 months earlier.
The national median lifestyle property sales price has tended to fluctuate on a quarterly basis since its peak in late 2007, with falls generally in the winter months being followed by a recovery in spring and summer. The June 2009 quarter national median sales value was $421,250 according to REINZ, a 7.5% reduction since the final quarter of 2007. Over a similar period, house prices fell by 7.6%.
Since the beginning of 2009, there has been a recovery in levels of sales activity, as has been the case in the residential market. In the June quarter 1354 sales were recorded, up 41% on the December 2008 figure and the highest recorded since the first quarter of 2008. The increase in activity has been driven primarily by the substantial reduction in interest rates over the past year and rising net migration.
Net migration has been building since late 2008 when the annual average migration gain of immigrants over emigrants stood at just 3,569. A net annual gain of 14,500 was recorded in the year to July 2009, the highest annual figure recorded since December 2006. While still well below peak levels recorded in the year to June 2003, when the net gain was in excess of 42,500, the current figure has reached a level where it is having a stimulatory effect on the property market.
