Rural properties, particularly those with dairying prospects, appear poised to withstand a softening real estate market in 2008.
According to a Massey University survey of professionals who work in rural real estate, most are predicting moderate to large increase in sales in the three months ending February 2008.
Bob Hargreaves, director of the Massey University Real Estate Analysis Unit (MUREAU), said strong prices for dairy products were bolstering property values.
"Anything that's flat land with either dairy or potential dairy is looking good," he said.
Of the 35 professionals surveyed -- which included realtors, valuers and real estate lawyers -- 28 per cent said they expected to see a large increase in sales and 36% predicted a moderate increase. Their projections were based on work done in their respective offices.
The findings were comparable when professionals were asked to forecast sales volumes based on their own knowledge of rural markets.
Respondents were also upbeat about prices for dairying properties.
Based on work done in the office, 56% predicted moderate increases in sales prices and 11% predicted large increases.
Hargreaves said the same optimism was not reflected in hill country properties which have been affected by drought.
"The outlook for hill country is not so good because the prices farmers are getting have been down. In some parts of the country, they've had prolonged dry weather, so the cash isn't there at the moment."
Hargreaves said the situation could change because of geo-political circumstances and increasing international food prices.
"Increased wealth in India and China, George Bush's ethanol policy and some of the bad things in Australia with drought are all putting pressure on food prices," he said, adding New Zealand will fare well.
"The great advantage we have in New Zealand is we can produce protein products cheaply because it rains a lot and that is true of both hill country and flat country, so for those reasons although the short term outlook for the hill country is not so good now, I believe that will turn around at some point in 2008."
As for rural residential properties and lifestyle blocks, specialists who work in the sector said the outlook was also favourable.
Bob Gillard, of Harcourt City, said demand was strong and he did not expect that to change.
"There has been significant interest from new immigrants especially from the U. K; the desire for finding something with close proximity to the city and a few acres. Also, locals looking to buy existing properties and lifestyle blocks to build on. So there's still a good strong interest across the board," he said. Gillard added the rural real estate market appeared to have returned to a more traditional cycle.
"It's back to that cycle where things tend to pick up around the end of September, run through till the second week of December, picking up again around the third week of January and running through till the end of May."
Lifestyle blocks in particular were proving to be quite popular. "Regardless of what people think, I still think there's a fair bit of money around for people to buy those types of property and just with the natural growth of our population, I think a lot of people are looking for a bit of peace and security and tranquillity and that comes with lifestyle blocks and rural townships in close proximity to major metropolitan areas."
Average rural properties were priced in the high $400,000 to mid $600,000 for a one to two hectare block.
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