Lifestyle Land Values

In 2004 after an extended period of low growth a substantial proportion of Hawke’s Bay rural property experienced dramatic increases in value over the following four years, generally peaking late in 2007 to early 2008. Later in 2008 prices eased significantly, a trend which continued in 2009. In 2010 prices have stabilized to some extent but at levels significantly but not alarmingly lower than their peak.  The most significant statistics concerns the frequency of sales (or time taken to sell individual rural lifestyle properties). Through the “boom” period 2004 to 2007 it was undoubtedly true that the Hawke’s Bay rural real estate market was principally driven by competition created for lifestyle property from overseas and out of town buyers. Hawke’s bay has been the preferred “lifestyle” destination, not only for overseas migrants but also significant numbers of affluent New Zealanders moving from major urban centers, all keen to enjoy the Bay’s superior Mediterranean climate, quality schools, educational opportunities, rural environment and a relaxed rural lifestyle. There is no reason to suggest that Hawke’s Bay will not continue to a destination of choice for “lifestyle” buyers however for a variety of reasons but principally the recession affecting not only New Zealand but also most of the western world, the Hawke’s Bay rural and rural lifestyle property market has become very slow indeed.

In 2010 prices for Hawke’s Bay lifestyle property have stabilized to a large degree, although this is a generalized statement and different categories of lifestyle property have been affected in different degrees.  The rural category most affected has been lifestyle building sections or property i.e. bare land property for which values have fallen quite dramatically in comparison to rural lifestyle property with homes. To some extend this situation may reflect an oversupply fuelled by numerous rural lifestyle subdivisions initiated in the “boom” years. Another undoubtedly is the cost of building rural homes together with the current cautious attitude of New Zealand bank managers compared to a few years ago.

By comparison farm prices have been relatively stable although the number of sales has been too few to assess any meaningful trends. It is interesting to compare the relatively resilient 3 year median price trend for farms to lifestyle property which are down in value by nearly 20% (source Real Estate Institute of New Zealand)..

Median Sales, Hawke’s Bay, Farms – 3 year comparison.

April 2008         $1,550,000

April 2009         $1,332,500

April 2010         $1,410,000

Median Sales, Hawke’s Bay, Lifestyle propery – 3 year comparison.

April 2008         $500,000

April 2009         $415,000

April 2010         $410,000

Filed under: Investment, Lifestyle, Moving to New Zealand, Specialist