The demand for residential properties in Otago, including the resort town of Queenstown, has continued to rise on the back of strong interest from investors in Auckland and Wellington
Demand for residential properties in the Otago region of New Zealand, including the resort town of Queenstown, has continued to rise in the last 12 months on the back of strong interest from investors in Auckland and Wellington.
Richard Stringer, a Director of Highland Real Estate Group who operate six Harcourts franchises in Queenstown and throughout the Otago district, says median houses prices in the Queenstown-Lakes District for example have reached $1.063 million, an increase of 14 per cent since June 2020.
Despite low levels of housing stock, sales volumes to June were also strong, up 18 per cent compared to the previous year, he says. Six months or a year ago there were dire predictions for the housing market but we’re still seeing strong demand in Queenstown particularly from Auckland and Wellington.
Stringer says the recent investor rule changes brought in by the government don’t appear to have deterred investors. Many investors decided to adopt a wait-and-see approach but overall the investment market in Queenstown is strong.
Encouragingly we’re seeing some first-home buyers in the market and investors looking at lifestyle properties or managed apartments. There’s also a definite swing towards people who can work from home relocating to Queenstown, Wanaka and Cromwell, he says.
Stringer says the 2021 Highland Group market report shows there were 139 sales in Queenstown under $800,000 for six months from January to June 2021 compared to 52 in the same period last year while sales over $3 million rose to 31 compared to 10 the previous year.
Almost half of buyers were local (46 per cent), 28 per cent were from the North Island, 14 per cent from the rest of the South Island while 12 per cent came from overseas.
But Stringer says the situation is not the same throughout the Otago region. While Real Estate Institute of New Zealand (REINZ) figures show a similar rise in median prices (up 17.3 per cent) across the province, on the flip side sales are down 13.5 per cent and thought to be largely due to a shortage of listings.
He says he believes this sales slowdown is likely to continue in 2022 especially as mortgage rates are slowly starting to rise.
We’re watching with great interest as banks announce increases in fixed-term mortgage and term deposit rates, he says. While interest rates are still at historically low levels, any change is likely to affect the first-home buyer market in particular.