Bay of Plenty people looking for more space and privacy plus returning Kiwis eyeing up instant sources of income are revving up demand for lifestyle property post-Covid-19 lockdown.
Real estate agents are also seeing a rise in cashed-up Auckland buyers wanting to move after the recent lockdown and buyers looking for investment opportunities or to land bank.
On the flip side, some agents were seeing “overwhelming” demand for apartment living, with Real Estate Institute of New Zealand data showing sales were up 85.6 per cent in the three months to August 2020.
Simon Anderson, managing director of Realty Group Ltd, which operates Eves and Bayleys, said there had been a big demand for lifestyle property.
“We have seen double the number of people coming through to open days to look at lifestyle blocks than we have experienced previously.”
He said there was an influx of interest from outside the city but most buyers were locals.
“About 20 per cent of inspections are from outside of town, mainly Waikato and Auckland. But the other 80 per cent is made up of local buyers,” he said.
“In the auction rooms, people are bidding without being at the property on lifestyle. Typically they have had a friend look over it but they are bidding over the phone from offshore.
“We have certainly seen a new level of interest in lifestyle and a new level of value.”
He believed it was because people had decided during lockdown that they wanted more space.
One the other hand, Anderson said there was a “real demand” for apartments, particularly those close to Tauranga’s CBD.
“Also the excitement is building around the new Farmers apartments, which tends to say there is a real strong demand for the sort of provision.”
Anderson said 15 apartments had sold off the plans in a new development on the fringe of the CBD in the past week.
He believed people returning from overseas were used to living in apartments and could see a future of apartment living in Tauranga.
“It signifies the diversity of our population now. We are a big city. We’re not the same any more.”
“There is also quality in the plans now so people know exactly what they are in for and it [buying off the plans] takes away the risk for the developer.”
Real Estate Institute of New Zealand data showed for three months ending August 2020 there were 39 apartment sales in the region – up 85.7 per cent compared to the same three months last year.
There were 127 lifestyle blocks sold in the three months ending July 2020, up 5.8 per cent on the same period last year.
Real Estate Institute chief executive Bindi Norwell said apartments and lifestyle blocks had become popular choices in the Bay, particularly over the past few months as home-owners started to understand more about what they want from their home amid living as part of a global pandemic.
Susie Laery, sales associate of New Zealand Sotheby’s International Realty Tauranga, said the agency had been “overwhelmed with inquiry” for the new Bask development in Mount Maunganui.
“Since launching the development to the market just over a month ago we have received over 180 inquiries, it’s just been constant.”
Laery said the current demand for apartment living could be due to cashed-up buyers looking for investment opportunities and with Mount property prices soaring buyers were seeing the potential of capital gain before completion in the Bask development.
“The demand for property at the Mount is exceptional, and at an entry-level of $895,000, it’s very appealing.
“Increased interest in this market has also been fuelled by bank term deposits at a low.
“People want their money to work for them, and they are turning to property as an investment solution.”
Laery said there had been inquiries from expats worldwide.
“In the past week alone, I have fielded inquiries from New York, Singapore, London and Hong Kong.
“Our overseas buyers are keeping a close look on what’s happening in New Zealand. Many are planning their return and there’s also a portion wanting to lock in their retirement home”.
Sotheby’s lifestyle specialist Jeremy Pryor has seen the same trends in the lifestyle market.
“There is a new category of buyers in the market as a result of the pandemic,” he said.
Pryor said he was seeing more regional and international buyers as well as many expats returning to New Zealand to buy lifestyle property.
“Some of these are returning without jobs and are attracted to lifestyle blocks for their instant source of income.
“We also have a new local buyer coming from the Mount and Pāpāmoa who, after experiencing lockdown, have decided they don’t value their homes any longer and want the space and privacy that lifestyle blocks offer.”
He said there had also been an increase in cashed-up Auckland buyers who, after the second lockdown, want out of the big smoke and could see the benefits of lifestyle property.
“Some are retaining their Auckland homes but are acquiring a secondary residence which yields a return.”
Pryor said he was also seeing a trend in buyers looking for investment opportunities in lifestyle and an increase in clients buying to land bank.
“Orchards returning a high yield that can be fully managed is something investors are looking at favourably with the future potential of capital growth”.
Tremains Bay of Plenty and Waikato general manager Anton Jones said demand for lifestyle property was “going good”.
“We’re getting a lot of people from out of town obviously coming from properties that were a bit more hemmed up and looking for a bit more space.
“The other part to that is during lockdown they decided they don’t like the house they are living in, or the neighbours are too close etc and wanted more room to move.
“That is definitely part of the mentality.”
When it came to apartments, Jones said he had not seen people buying off plans for a long time “but that had certainly changed”.
“People looking at apartments can see the future in that, whether it is an investment, holiday home or somewhere they want to live and the ease of low maintenance.”
Tauranga Harcourts managing director Simon Martin said there was “good activity” on both apartments and lifestyle properties.
Martin said interest in the new four-level luxury 32-apartment building at 359 Cameron Rd was “going well” with another agreement signed just last week.
“The inquiry for that once again is strong. It is certainly well received and we are getting sales across the line on it.”
Oliver Road Estate Agents director Cameron Winter said for many people lockdown either highlighted a desire to spend significantly more, or significantly less time at home.
“For those who discovered, or rediscovered, a love for spending more time in the garden and creating a beautiful, private place to live, the next logical step is a larger property.
“For those in the opposite corner – an apartment makes perfect sense.”
Company partner Jason Eves said increased inquiry from Auckland buyers was “almost always” in relation to larger lifestyle property “where they are looking for space, storage for toys and privacy” rather than centrally located suburban property.