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Mood of the lifestyle market

As the dust settles following New Zealand’s ‘past the peak’ milestone in the global COVID-19 pandemic, Kiwis are settling into a different pace of life, making adjustments to their homes and lifestyles.

From flexible working arrangements to a preference for online shopping, the experience of lockdown restrictions and a health crisis have also contributed to a seismic shift in our property preferences, with people becoming more amenable to purchasing lifestyle properties in fringe locations.

Historically, lifestyle sales markets across the country have shared in the fervent buying activity experienced across our urban areas, however, they’re taking a little longer to slow down.

Recent sales data from the Real Estate Institute of New Zealand (REINZ) shows across New Zealand there were 66 more lifestyle property sales for the three months ended April 2022 than the three months prior - bucking the national trend of declining sale volumes.

In Auckland, the average price of lifestyle property was up five percent month-on-month, partly owing to a shortage of available property for sale and strong buyer interest.

Property purchasers appear enlightened by last year’s lockdown restrictions and Kiwis continue to demonstrate an increased desire to be self sufficiently out of built-up areas.

Across the Auckland, Hamilton and Bay of Plenty regions Bayleys salespeople are seeing strong demand for lifestyle properties in emerging areas with the development of lifestyle subdivisions in areas like Te Kauwhata in North Waikato a testament to ongoing market demand.

Similarly, Bayleys salespeople say the government introduction of a series of incentives for new build properties has spurred rapid growth in the development sector which continues to yield new opportunities for landowners as a result of the Resource Management Amendment Bill and National Policy Statement on Urban Development.

Buyers returning to New Zealand from overseas destinations, including foreign-buyer exempt Australians and Singaporeans are investigating an escape out of city areas in favour of a more laid-back country lifestyle.

There has been huge growth in both the smaller lifestyle block market and more luxurious landholdings with upscale abodes on the likes of Waiheke Island.

Salespeople say interest in the top tiers of the market can be put down to a shortage of supply as there simply aren’t enough elite homes to satisfy growing demand.

Buyers are increasingly looking to have their cake and to eat it too, cashing in on recent equity gains to trade up to lifestyle properties big enough for a home and garden that can accommodate evolving family needs, a boat and life’s little luxuries like a spa, pool – or even a helicopter pad.

Property purchasing patterns have changed significantly since the onset of the COVID-19 pandemic in February 2020, with some buyers that were waiting on the sidelines in the face of rapidly rising property prices now eager to participate at a more measured market pace.

Lifestyle properties, much like the local residential market, are still commanding high prices, despite rising mortgage lending rates and global economic disruptions which have tempered some buyer appetites and dampened an element of the previous competition.

Times like this are an excellent opportunity for budding lifestyle property owners to make their move and trade up from suburban reaches to a larger lifestyle block.

With much ado about health, the environment and development opportunities courtesy of the recently revealed Budget 2022, house hunters and landowners alike are focussed on what they can and can’t do with certain tracts of land, as this will ultimately impact market value.

Bayleys have recently announced it is adding to its development offerings with the launch of a dedicated New Build team that will provide sales and marketing services for off-the-plan buyers and sellers of small-to-medium residential development sites – including lifestyle properties ripe for development.

Sweeping recent changes including the exemption of the removal of interest deductibility against rental income on new builds and the exemption for new builds from the 10 year bright-line test, along with financial legislation which has also changed in favour of buying means Kiwis are constantly seeking guidance in this space.

The New Build team strengthens the Bayleys suite of offerings for the development market, supporting its established Projects team which caters to larger-scale residential developments of 45 dwellings or more. The team has previously overseen the sales and marketing for high profile developments including Winton’s master-planned Wanaka community – Northlake – in Central Otago.

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