The grass is still green over the horizon
Closed borders, lockdowns, gathering restrictions and social distancing, the last year has been one nobody could have ever imagined. However, the one thing that everyone has been talking about this past year is property.
With uncertainty in the economy and wings clipped that stopped people from being able to travel, people decided to turn their attention and inject their money into the housing market.
Low interest rates helped people get on the property ladder, it allowed investors to expand their portfolio and it encouraged others to buy and sell across the country.
The rush on property meant real estate was in high demand, property sold in record times and a shortage in supply and demand saw prices soar across the country.
Although we regularly heard about the strength of the market in our major cities, and the average house price surpassing a million dollars in Auckland, the same uplift in the market has been felt throughout the regions.
Townies learnt the value of space when they were cramped up at home, and that has encouraged some to look outside of growing cities for extra room, fresh air and a new lifestyle you can only get in the regions.
Having a few acres of land has become very highly sought after, which has seen the number of lifestyle properties sold in the last year increase 46 percent. The Real Estate Institute of New Zealand (REINZ) figures showed 9,942 lifestyle properties changed hands in the year ending April 2021.
The attractiveness of towns and smaller communities has seen prices pick up, increasing property values.
First home buyers have also recognised the benefits of buying their first home in the regions, with a few areas seeing more new buyers active in the market than investors.
CoreLogic’s Chief Property Economist Kelvin Davidson put this down to these areas being more affordable when it comes to house prices. The pull to these locations has been spurred on by the local economy growth – which is on the back of farming, in many instances.
“In these circumstances, first home buyers have been keen to get on the ladder,” Davidson said.
The pull of solid jobs in the rural sector has encouraged many first home buyers to settle and make their first move onto the property ladder.
Solid activity in the rural sector has created good morale, which has been spurred on by the stability in the financial market and good dairy prices – this has pushed up the value of farmland.
In the last year, 1,677 farms were sold in the year to April 2021, which is 45 percent more than the year before.
In the months to come, the outlook is encouraging for the lifestyle and rural sectors. Dairy pay-outs look good, and so do the returns in other areas in agriculture and horticulture. If this continues, it is likely more property will change hands, and that tends to lead to higher prices.
However, the uncertainty around new environmental regulations still weighs on the minds of many farm buyers. There are still a lot of unknowns about these law changes and what it could cost to get their farms to meet any new legislation.
As the saying goes, ‘make hay while the sun shines’, Currently the sun is shining on the rural sector, and that is reflected in the property market.
