New Zealand’s real estate market is facing a slowdown as the Real Estate Institute of New Zealand (REINZ) reported a drop in sales and prices. According to the data released by REINZ, 92 fewer lifestyle properties were sold for the three months ending February 2023 than for the three months ending January 2023, representing an 8.3% decline. The overall number of lifestyle property sales for the three months ending February 2023 was 1,023, compared to 1,754 for the same period in 2022, marking a significant 41.7% decrease.
Shane O’Brien, Rural Spokesman at REINZ, explained that the lower number of listings in most areas compared to previous years was responsible for the drop in sales. He added that salespeople have noted buyers from outside regions showing interest in properties, as New Zealanders continue to look outside their areas to balance lifestyle and changing work commitments.
O’Brien also stated that the recent increase in interest rates had undoubtedly impacted buyer decisions, and the reported slowing of the residential market could limit the buyer pool for lifestyle properties in the short term. The median price for all lifestyle properties sold in the three months to February 2023 was $949,000, which is $81,000 higher than the same period in 2022. However, the median price for bare land lifestyle properties sold was $400,000, $80,000 higher than the three months ending February 2022.
The REINZ report highlighted that the slowing of the lifestyle property sales is not unexpected in an election year, further exacerbated by the general slowing of the economy, which impacts buyer confidence during uncertain times. However, there are positive signs in the top end of the market in many areas, with some regions recording an increase in sales compared to the three months to January 2023.
The regions recording the biggest decreases in sales in the three months to February 2023 compared to the same period in 2022 were Auckland and Waikato, both with a drop of 118 sales. In contrast, Nelson/Marlborough and Taranaki observed the smallest decreases, with a decline of 23 and 24 sales, respectively. Meanwhile, two regions saw the median price of lifestyle blocks increase between the three months ending February 2022 and the three months ending February 2023. Taranaki and Southland experienced the most significant increases of 24.6% and 12.1%, respectively.
The median number of days to sell for lifestyle properties was 59 days for the three months ending February 2023, 19 days more than the same period in 2022. West Coast recorded the shortest number of days to sell, with 43 days, while Bay of Plenty recorded the longest number of days to sell, with 80 days.
