Trend towards 2-3 acre blocks as “townies” move to the country.
An iconic feature of the Kiwi landscape - the 10-acre lifestyle block - is being downsized.
According to Peter Newbold, general manager of rural property specialists PGG Wrightson Real Estate, the size of the average block is becoming smaller as New Zealanders from big cities look to a “less challenging” experience of life in the country.
“There are still 10 and 20-acre blocks, but we are seeing a trend towards smaller two and three-acre properties,” he says. “People are seeking a nice bit of land with trees and grass without the all-consuming responsibility or chore of running stock.
“Twenty years ago, lifestyle blocks, or farmlets, typically had sheep or other stock and were often run as businesses. Today, by contrast, many have no stock at all and have become a big extension of a normal urban section.
“Thirty to 50 per cent of all purchases through us (PGG Wrightson) in the last year have come from people in big towns and cities, which is a large number. They are looking for lifestyle, not workstyle.”
Despite the growing interest from ‘townies’, Newbold - who heads a nationwide sales team of 170 - says the lifestyle block market, like residential real estate, has been slower over the last year, a trend that has continued in 2023.
Figures from the Real Estate Institute of New Zealand (REINZ) show that in the three months to the end of April 2023, 1256 lifestyle properties were sold throughout the country - a number well down on the 1792 sold in the same period the previous year - while the 5830 sold in the 12 months to the end of April 2023 was 31.8 per cent down on the previous 12 months.
Median prices were also down - the median for bare land blocks sold between February 2023 and April 2023 were down 22 per cent on a year earlier and the median for farmlets (those with stock) was down 13 per cent in the same period.
However, Newbold says it remains a considerable market (in 2022, for example, $9 billion worth of lifestyle properties were sold) and believes it has reached the bottom of the trough. With interest in them still high, he expects it to “slowly climb out” during spring and into 2024.
“You have to remember the market has had an incredible run in the last 10 years,” he says. “There was another spurt during Covid, so we are coming off some historic highs.
“The big unknown is the (general) election. Normally there is a lull around that time and while we may see some early spring sales, I am confident we will see more in 2024.”
Newbold says land around Cambridge in the Waikato and rural areas of Canterbury are popular with buyers. In the Waikato, 50 per cent of purchases through PGG Wrightson are from people living in Auckland and Hamilton, while up to 10 per cent of buyers in Canterbury are from the North Island.
He says a lot of people are sick of living in big cities and have dreams of owning land with more space. In most parts of the country, it is possible to get into a property for under a million dollars, a figure more than favourable compared to city residential property prices.
“For what you spend, you are generally getting a better quality of life than in a city. This, together with property values, is a big driver for many people.”
The level of services in provincial towns is also an attraction. “You’ve got cafes, restaurants, good schools, everything you need. Services in these areas are just as good as you get in Auckland, but without the hassles.
“People also work from home a lot more now, so owning a lifestyle block is more convenient from that perspective,” he says. “Even if you have to go to Auckland from rural Cambridge say, the airport in Hamilton is only 15 minutes away or it’s a quick car trip up the Auckland-Waikato freeway.
“Smaller blocks are also attractive from a security point-of-view; people feel safer because they have communities of other block-holders nearby whereas in the past they were scattered among farmers, not that that was a bad thing.”
Newbold says the desire to have a more relaxing lifestyle in a rural setting without the work associated with a traditional farmlet is the main reason people are eyeing smaller holdings.
“If you’ve got 50 sheep, you might as well have 500 because they’ve still got to be shorn and drenched,” he says. “I live on a small block myself (near Arrowtown in central Otago) but it’s all in trees and grass. Mowing the lawn on my ride-on with my headsets is about as hard as it gets.”
New Zealand has 175,000 lifestyle blocks covering 873,000 hectares and Newbold says the only constraint he can see on the opening up of more smaller blocks is if councils get tougher on breaking up productive land.
For more information go to www.pggwre.co.nz