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New Zealand’s rural property market is gaining momentum although highly price sensitive, according to First National Group’s latest real estate agent survey.
The survey of rural realtors in the nationwide network’s almost 70 offices covers the six months of December 2010 to May 2011
First National Group general manager John Stewart says the outlook is quietly positive, driven largely by bank lending, lower interest rates and higher commodity prices,
“There’s no doubt that a quiet lift has been occurring for some time, up to four months in fact, in both enquiry and sales of rural properties across much of the country, on the back of increased world market prices for wool, meat, grain and dairy products.
Sales volume for summer/autumn was double that of spring/summer, although hard won. Listings were down on the same time last year.
“The market is very price sensitive with 65% of respondents reporting continuation of a ‘buyers market’,” Stewart said.
“Dairy and forestry appear to be in healthy demand but our salespeople believe even these sector prices are stable rather than on the increase.
“Across the country though, many vendors are holding onto history-based higher prices and these properties remain stagnant often while those based on current expectations are attracting offers,” Stewart said.
“Interestingly, Taranaki and Central Otago seem the most vigorous with our Taranaki team commenting that the rural market is turning a corner there after several tough years.
“In Central Otago vendors seem to be adjusting prices resulting in immediate market approval. It is of interest that this market was the first in the country to adjust section and home prices back in 2009 with similar reaction.”
Survey results summary:
Regional variation and key factors influencing markets
Sales – Sales in the summer/autumn period were double the spring/summer sales period.
Lifestyle - Supply exceeds demand in all areas measured. Key factors were high fuel prices and price expectations. There was some interest in cheaper lifestyle, smaller blocks (1 – 3 acres) and bare land but overall this market is yet to take off again.