Fewer high-end lifestyle blocks selling in the top of the south

More lifestyle blocks are being sold in the top of the south, but prices are lower, the latest property data shows.

Data released by the Real Estate Institute of NewZealand shows the number of lifestyle properties in Nelson-Marlborough-Tasman was up 18 to 59 in October 2023, compared with October 2022 – the biggest increase in the country.

That bucked the national trend of declining sales, with an 11.9% drop compared to the previous year.

REINZ rural spokesperson Shane O’Brien said the October sales results followed the trend of 2023 “with a small decline in sales in many areas with notable exceptions in the top of the South Island and the Manawatu region”.

“Many agents are reporting an increase in activity levels as the weather improves and properties are looking at their best during the spring months. A notable increase in activity in the residential markets across much of New Zealand will encourage more activity in this sector as many buyers and sellers move from the built-up urban areas to the nearby rural areas.”

But, while Te Tauihu had the biggest increase in sales, it was at the other end of the scale when it came to the median sales price, recording a 26.2% decrease from $1,260,000 in October 2022 to $930,000 in October 2023.

Harcourts rural sales consultant and Nelson Richmond business owner Toby Randall said the median prices were impacted by the types of properties being sold, with more “entry level” properties around the $1 million level selling compared to properties at the higher end of the market.

When interest rates were lower, people were more willing to spend a bit more, but now rates were higher, which meant people weren’t stretching themselves, he said.

“People are being a lot more realistic, and they can afford what they can afford, and so you're seeing more sales in that entry level.”

For lifestyle blocks, entrylevel often meant a more modest house and a bit less land, he said.

Many people were also looking further out than they would have previously to get more for their money.

Sales of more expensive properties were often driven by out-of-town buyers from cities such as Wellington and Auckland who were looking for a change of lifestyle, he said.

Out-of-town buyers made up about 50% of the buyer pool for lifestyle properties,but falling prices in markets such as Wellington and Auckland meant there were fewer buyers in the market.

“We haven’t seen those buyers through, therefore there hasn’t been as many sales in that top end.”

Now that a new government was in place and interest rates looked to have peaked, confidence was returning to the market, he said. “It’s definitely not all doom and gloom, and it’s definitely looking a lot more positive than it was six months ago.”

In the past three months, out-of-town buyers had started to return to the market.

Well-priced and unique properties were seeing a lot of interest and some were getting multi-offer situations, he said.

One property in Pigeon Valley went to market priced for negotiation over $1,095,000 and had proved to be an “extremely busy listing and high demand resulting in a fast multiple offer”.

Another property at Win Valley Dovedale – price by negotiation over $1,270,000 – was an attractive option for people willing to look a bit further afield to get more for their money, he said.

“This property has just hit the market and been busy with viewings and already shaping up like it will head into a multi-offer.”

O’Brien agreed the amount of lower-end sales would have brought the median prices down, describing it as a “blip”.

More confidence in the market, both from a new government and more surety around interest rates, was helping increase buyer confidence, he said.

“It’s going to be interesting to see what the November statistics look like, because I think they could be quite noticeably stronger ... A lot of people have been waiting on the sidelines just waiting to see what’s happening.”