Parts of rural New Zealand are undergoing an unprecedented property boom as cashed-up city slickers chase a country lifestyle. We look at what’s hot and weigh up the pros and cons of lifestyle blocks.

If you’ve ever dreamed of throwing it all in and heading to the coast or country, you’re not alone. Over the past decade, a quiet revolution has been shaking up once sleepy country towns and regional cities.

A number of towns located within one or two hours’ drive from major cities, or near adventure tourism and skiing centres, are reporting rising property prices and growing populations. In some cases, prices have doubled in recent years.

In particular, buyers are snapping up lifestyle properties for use as hobby farms, retirement investments, B&Bs or weekenders. (Lifestyle blocks are generally rural landholdings of one to 10ha that are not classified for a specific purpose such as market garden, vineyard, horse training etc.)

The boom in lifestyle blocks is being driven by:

• Retirees and people in their 50s scaling down from a larger, city home.
• Professionals and young families seeking a better quality of life.
• New information technology giving people the ability to work remotely.
• Better infrastructure in country towns and regions including roads, entertainment, leisure and accommodation.

Lifestyle price boom
Figures from the Real Estate Institute of New Zealand (REINZ) indicate that the rural lifestyle block market has grown considerably over recent months. The median lifestyle block price has jumped $32,500 in the year to June 2003, which compares with an increase of $26,000 in the median residential property price (including lifestyle blocks) for the same period.

A few regions in particular have experienced booming growth rates in the lifestyle block market. Over the year ending July 2003, lifestyle block sales increased 61% in Northland with median prices increasing from $143,000 to $150,000. Growth rates in excess of 25% were recorded in Auckland, Gisborne, Hawkes Bay and Southland. View lifestyle property sales information across the whole country.

REINZ rural spokesman, Murray Cleland, said demand for lifestyle properties has been growing all year.

“Lifestyle blocks are the driving force in rural sales at the moment,” he says. “The lifestyle block market is linked very closely to the residential market. If the residential market is running hot, as it currently is, the lifestyle market follows accordingly.”

Lisa Dudson, Vice President of the New Zealand Property Investors’ Federation, says: “In the current boom, lifestyle properties are doing well. In the South Island, demand for lifestyle properties is particularly strong in Dunedin, Wanaka and Arrowtown as well as areas outside Queenstown.”

Where to next?
Historically, country and coastal areas have lagged behind capital cities when it comes to growth in property values. Analysts now say that trend may be over. “The popularity of lifestyle blocks has injected life into communities that just a few years ago were in decline. This in turn has the effect of driving up demand and thereby prices and I don’t see that changing soon,” Mr Cleland says.

What’s hot
Mr Cleland says new social and transport infrastructure will be important in determining hot lifestyle locations.

“When the motorway between Auckland and Hamilton is completed, I believe that land either side of that, provided it can be subdivided, will be in demand by lifestyle block buyers,” he says.

Coastal and regional towns located one to two hours’ drive from Auckland, Wellington and Christchurch, and those with village-like features, will perform particularly well over the next 10 to 15 years. Lifestyle blocks near Queenstown are also tipped to outperform the overall market. Lifestyle blocks in the Masterson district are also booming, up 22% last year.

What to consider when buying a lifestyle block
As with any investment, the decision to purchase a lifestyle block requires careful planning. For older buyers and those nearing retirement, decisions should take into account access to hospitals and health services, local public transport infrastructure and commuting distance to family and friends. Younger buyers may want to think about schooling, employment opportunities, and even possible zoning changes that might improve or detract from the value of their lifestyle section.

Disadvantages:

• Higher maintenance costs and associated workload of maintaining a lifestyle section.
• Greater travelling distances (and the cost of owning and operating one or more vehicles).
• Limited amenities such as libraries, cafes, restaurants, entertainment.
• Higher cost of petrol, building materials and labour.

• Cheaper house and land prices (more bang for your buck).
• Ability to invest capital left over from sale of city home to create larger retirement income.
• Relaxed pace of life.
• Ability to generate additional income from the property (tourism, crops, orchards, stock).