Queenstown Market Report September 2022

QUEENSTOWN MARKET REPORT

SEPTEMBER2022

QueenstownAreaRealEstateSalesSta�s�csAugust2022

Aug22 July22 Aug21 July21

DwellingSales 65 31 56 58

ApartmentSales 10 2 15 13

Sec�onSales 2 8 7 7

Lifestyle(Rural)HomeSales 1 1 2 1

Lifestyle(Rural)LandSales 3 0 1 1

QueenstownAreaSalesTotals 71 40 66 67

MedianResiden�alDwellingPrice $1,270,000 $1,257,000 $962,500 $1,160,000

MedianResiden�alDwellingDaystoSell 48 42 35 43

MedianResiden�alLandDaystoSell 233 11 90 64

MedianApartmentDaystoSell 75 56 62 36 SalesOver$1Million 16 7 9 12 SalesOver$2Million 6 4 5 4

SourceREINZRuralandResiden�alDatabasesandREINZMedianReportR200

Wri�en:22September2022

SourceofdataforthisreportisRealEstateIns�tuteofNewZealand(REINZ)publisheddata,unlessotherwisestated. NotetheApartmentsalescountarealsoincludedinthedwellingsalescount.

Queenstown–What’sHappening

Queenstownhasbeenverybusy.OurAustralianfriendsvisitedinextraordinarynumbersacrossJulyand August;NewZealandersalsoflockedtoQueenstownbothasaninter-islandgetawayandalternateskifield fortheNorthIslandersgiventhatTuroaandWhakapapawereonlimitedservicesduetopoorsnow.Abusy townandanearperfectskiseasonwerejustthemedicineforatownoutoftwoyearsofnearhibernation.

Springishereandourfamouscherryblossomhashitfullbloom,aclearsignalthatthesnowisnearlygone, andthesummermonthsareahead.

Queenstownsalesnumbersremainhealthy.Careisrequiredincomparingtoday’ssalesnumbersagainst thoseforthefirstfivemonthsof2021;thatperiodreflectedastrongmarketreboundfromapoor2020 casuedbystrongresponsetotheCovideconomicstimuliappliedbytheGovernmentandReserveBank.

ThatperiodofStimulihaspassed,andourrealestatemarkethassettledandrespondedtothemorerecent tighteningpolicies.

July’ssalesnumbersforQeenstownwereasurpriseat40salesforthemonth,butAugustsalesat71is consistentwiththeothermonthsof2022,andareverysimilartothe66salesinAugust2021.

Comparingthesalesyeartodate,July2022tothesameperiodforpreviousyears:

� 40%downcomparedto2021;

� 19%upcomparedto2020;

� 18%downcomparedto2019.

Queenstown’smedianhousesellpriceremainshighat$1,270,000forAugust2022.Queenstownhas alwaysdisplayedreasonablevolatilityinmediansellpriceonamonth-to-monthbasisduetosmallsized datasetandperhapsthewidestrangeofhomevaluesinNewZealand.Donotreadtoomuchintothe11% dropfromQueenstown’srecordmedianof$1,425,000forMay2022.Thoughtshouldbegiventothe32% increaseinmedianhousepriceforthe12monthstoAugust2022,evenafterthe11%dropforMay22.The highmedianreallyreflectsthatasustainedperiodoflowersupplyofhomescontinuesandthatsimilarly, demandcontinuestorunaheadofsupply.Marketobserversshouldbecautious ofthemanymarket commentatorspredictingfurtherdeclineintherealestatemarket.Alsokeepinmindthatitsuitsthe ReserveBankGovernorandMinisterofFinancetore-inforcenegativesentimentastheyattempttopull backinflationoftheirowncreationtotheirtargetrange.

Homesalepricesareveryfirm,andinrealitycontinueupwardpricegrowth.Thatsaid,themarketis rewardingrealisticvendors,andunrealisticexpectationsarenotbeingmet.

Augustproducedtensalesbeween$2.0mand$3.0m,foursalesbetween$3.0mand$4.0m,andtwosales over$5.0m.Sixteensalesintotalabove$2.0m-astrongperiodofsalesforthehighervalueproperties.

Lownumbersofnewlistingstomarketandlowinventorylevelscontinuereinforcingthatsupplyremains behinddemandforQueenstown’smarket.

SalesofKingstonhomescontinueastellarrun.FoursalesforthemonthofAugust2022,twoofwhichare homesinexcessof$700,000;thesesalesdemonstratingKingston’spopularityasoneofQueenstownLakesDistrict’sdesirableplacestolive.

NewZealandDwellingSales

CombinedrealestatesalesforNewZealandareincontrasttoQeenstownsales.

Salesdecreasedannuallyby18.3%,from5,983inAugust2021to4,891inAugust2022.Month-on-month, therewasanincreaseof1.9%.TheAucklandregionwasastandoutwith38.9%fewersalesinAugust2022 comparedtoAugust2021.Therewasquiteavariationinsalesnumbersacrosstheregions.

AcrossNewZealand,medianpricesforresidentialdwellingsdecreased5.9%annually,from$850,000in August2021to$800,000inAugust2022.

FourregionshadanannualdecreaseinthemedianpriceinAugust2022.Auckland’sAugustmedianprice decreased8.3%comparedtoAugustlastyear,downfrom$1,200,000to$1,100,000.Theotherregions experiencingdeclinesinmediandwellingsalepriceforthesameperiodwereWellingtonat9.3%, Manawatu/Whanganuiat6.6%,andNorthlandat1.2%.

Theremaining12regionsallexperiencedgainsinmediandwellingpricefromAugust2021.

JenBaird,ChiefExecutiveatREINZ,comments:

“Despitethemedianpropertypriceeasingacrossthecountryandsupplyincreasing,salesactivityremains subdued.Thesepositiveaspectsforbuyersareoffsetbyhighermortgageratesasrisinginterestratesand concernaroundinflationcontinuetoputthebrakesonformanypotentialbuyers,”observesBaird.

“Thatsaid,somerealestateagentsarereportinganincreaseinopenhomeattendance.Andwhileowner occupiersremainadominantforceinthemarket,firsthomebuyersarebeginningtore-emerge.Assellersadjust theirexpectationstomeetthemarket,nowisagreattimetoconsiderupsizingordownsizing.Although affordabilityremainsachallenge,therelaxingoftheCreditContractsandConsumerFinanceAct(CCCFA)and opportunitytonegotiateareattractingsavvyfirsthomebuyers.”

www.realestate.conz showsnationalstocklevels(numberofhomesavailableforsale)ashavingamarked increase,with107.7%morepropertiesavailableforsaleinAugust2022comparedtothesamemonthlast year.AsofAugust2022,realestate.co.nzshows25,441residentialdwellingsasbeingforsale.

KEYDATA SUMMARY

MEDIANHOUSEPRICEYEAR-ON-YEAR

Na�onal

NewZealandExAuckland Auckland

$1,100,000-downfrom$1,200,000-8.3%year-on-year $800,000-downfrom$850,000-5.9%year-on-year $700,000-upfrom$700,000-thesameyear-on-year

MEDIANHOUSEPRICEMONTH-ON-MONTH

Na�onal

NewZealandExAuckland Auckland

VOLUMESOLDYEAR-ON-YEAR

Na�onal

NewZealandExAuckland Auckland

$800,000-downfrom$810,000-1.2%sincelastmonth $700,000-downfrom$720,000-2.8%sincelastmonth $1,100,000-upfrom$1,090,000+0.9%sincelastmonth

4,891-downfrom5,983-18.3%year-on-year

3,414-downfrom3,565-4.2%year-on-year

1,477-downfrom2,418-38.9%year-on-year

VOLUMESOLDMONTH-ON-MONTH

Na�onal

NewZealandExAuckland Auckland

REINZHOUSEPRICEINDEX

Na�onal

NewZealandExAuckland Auckland

4,891-upfrom4,800+1.9%sincelastmonth

3,414-upfrom3,330+2.5%sincelastmonth

1,477-upfrom1,470+0.5%sincelastmonth

3,765-downfrom3,997-5.8%year-on-year

3,902-downfrom4,030-3.2%year-on-year

3,577-downfrom3,954-9.5%year-on-year

SEASONALLYADJUSTEDMEDIANHOUSEPRICE

Na�onal

NewZealandExAuckland Auckland

MEDIANDAYSTOSELL

Na�onal

NewZealandExAuckland Auckland

Down2.1%,down6.0%onAugust2021

Down2.8%,up0.1%onAugust2021

Down0.8%,down8.6%onAugust2021

49-18daysmorethanthesamemonthlastyear 49-19daysmorethanthesamemonthlastyear 48-16daysmorethanthesamemonthlastyear

Westpac’sWeeklyCommentaryfor19September2022isheadedup “Alongtimebetweendrinks”: “TheNewZealandeconomygrewstronglyovertheJunequarter,comfortablyavoidingrecession.Forus, though,avoidingrecessionwasverymuchasecondarystory.Thebignewsisthatthepandemic’seconomic impactisfadingand,asitdoes,spendingpatternsarenormalising.Indeed,afterverylongtimebetween drinks,sotospeak,it’stimeforserviceindustrieslikehospitality,entertainment,andaccommodationto returntoeconomicprominence.”

SeeWestpacReport

ResidentialPropertyManagement

Theresidentialrentalmarkethasveryquicklymovedtoastateofsignificantundersupply.Thereare currentlyonlyaround20homesadvertisedforrent,downfromsome220homesavailableduring2020.

Anypropertyadvertisedisbeingswampedwithenquiry,andthoselookingforrentalsaretypicallystressed astheyattempttolocateanythingsuitable.Factorsaffectingrentaldemandandsupplyarethecontinuing flowofHolidayAccommodationhomesfromresidentialusebacktoholiday,thereactivationandrampupof hospitalityandtourismbusinesswhoarenowemploying,andacontinuedstrongtrendofpeoplerelocating toQueenstown,makingthechangeoflifestylepromisedtothemselvesoverthelast2½years.

Rentsareunderconsiderablepressure,nowsurpassingpre-Covidlevels.Landlordslettingtonewtenancies cantakeadvantageofthesenewmarketconditionsinsettingrentals;thosewithexistingtenanciesare requiredtowaitoutthestatutoryone-yearperiodbetweenrentalreviews.Landlordstodatehaveoften beenconsideratewhensettingnewrentals,acknowledgingthefinancialstressmanytenantsarecurrently exposedto;butthereisalargestepinrentsnowbeingachievedandmanylandlordswillwanttotake advantageofthesenewmarketconditionsaftertheburdensofrecentResidentialTenancyAct amendments,alongwithreducedincomesduetovacancyandreducedrentalsoverthelast2½years.

HolidayAccommodation

TourismtoQueenstownhasexperiencedanexplosiverestartafterborderclosure.NewZealandersand AustralianshavebeenvisitingQueenstowninlargenumbersandthesevisitsarebeingsustainedacross whatusedtobethequietershoulderseasons.Withbordersnowopentotherestoftheworldevenmore visitorsareexpected.Bookingsforallourholidayhomesarerunningatcapacity,withbookingsnow extendingwellinto2023.Wehaveincreasedourtariffsandwilllikelylookatfurtherincreasesagain.

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