QUEENSTOWN MARKET REPORT
FEBRUARY2023
Wri�en:21st February2024
SourceofdataforthisreportisRealEstateIns�tuteofNewZealand(REINZ)publisheddata,unlessotherwisestated. NotetheApartmentsalescountarealsoincludedinthedwellingsalescount.
Queenstown–What’sHappening
Queenstownhasbeenbuzzingwithactivity.ChristmasandNewYearattractedalltheusual visitorsandinstrongnumbers.TheGibbstonValleyMusicfestivalwasyetanothersuccess, evenwithoutthecooperationoftheweather.ChineseNewYearwasthe"bestever";this holidayperiodmusthavedrawnrecordnumbersofthoseeithercelebratingorholidaying duringthisfestiveperiod.Cominguponthe29th ofFebruaryistheNewZealandGolfOpen atMilbrookResort,andonthe2ndofMarchwehavetheMototapueventswithseveralepic mountainrunningandbikingevents.
Wedoliveinanall-roundinspiringplace.
QueenstownAreaRealEstateSalesSta�s�csJanuary2024 Jan24 Dec23 Jan23 Dec22 DwellingSales 27 40 24 41 ApartmentSales 2 9 2 2 Sec�onSales 7 85 1 3 Lifestyle(Rural)HomeSales 2 0 1 2 Lifestyle(Rural)LandSales 1 3 0 1 QueenstownAreaSalesTotals 37 128 26 47 MedianResiden�alDwellingPrice $1,165,000 $1,300,000 $1,385,000 $1,300,000 MedianResiden�alDwellingDaystoSell 26 46 58 35 MedianResiden�alLandDaystoSell 79 132 263 70 MedianApartmentDaystoSell 26 58 324 34 SalesOver$2Million 4 9 8 9 SalesOver$3Million 3 3 3 2 SourceREINZRuralandResiden�alDatabasesandREINZMedianReportR200
QueenstownSales(Summary)
Nationally,NewZealandsalesforJanuarywereveryweak.37salesforQueenstownforthe monthofJanuarywerelacklusterwhencomparedtoothermonthsoftheyear,butcertainly comparabletothenumberssoldinJanuaryforthepreviousthreeyears,buckingthe nationaltrendoflowsales.
Whilstourofficeachievedsomegoodsales,Januaryisexpectedtoproducefewer numbersthanothermonthsgiventheholidayperiodandreducedtradingactivity.
Wecannowlookbackat2023.Queenstownachieved817salesofresidentialpropertyfor 2023,up13%comparedto723for2022,butdownamassive29%whencomparedto1150 salesfor2021.Queenstown's2023saleswererescuedfromapoorresultwiththereleaseof titlesinDecemberfor78pre-titlesalesoflandatHanley’sFarm.Withoutthese78sales,2023 wouldhavebeenatthesameten-yearlowsas2022andthe2020Covidlockdownyear.
Oddly,the2023mediansalespriceofhomeswassteady,aroundtherecordlevelof $1,400,000forthe2023year.Theexplanationforthehighmediansalepriceliesinthe smallnumbersofpropertiesbeingmadeavailableforsaleanddemandremainingaheadof limitedsupply.
MediandaystosellahomeinQueenstownhasbeendecliningthroughthesummer months;thewintermonths’salesdotendtoslow.ThemediandaystosellforJanuary2024 at26daysisnotablyveryquickforQueenstownbutdoesmakesenseasthemedianprice comesback;morelowervaluehomessellthanhighervalue,thelowervaluehomes typicallysellinashorterperiod.
ThemediansalepriceforJanuarydidrecorda16%decreaseto$1,165,000comparedto $1,385,000forJanuary2023anda17%decreasecomparedtotherecordhighof $1,400,000inJulyandOctober2023.Thislowermedianhousepricereflectsthe slowdowninthenumberofhighervaluehomesbeingsold.
AnewGovernmenthasclearlybroughtachangeofsentimenttotheQueenstown marketplacewithactivityfrombuyersemergingamonthbeforeOctober2023’selectionsand continuingtostrengthenthroughtoearly2024.Whileinterestisupacrossallpropertyvalues, mostbuyingactivityisoccurringinthelowersalesvalues.Ofthe37residentialpropertysales forJanuary2024,33werebelow$2million.28ofthesaleswere$1,500,000orbelow.The bulkofthebuyingactivitycomesfromfirsthomebuyers,Queenstownresidentsandafew investors,howeversalesinthetwomillion-to-three-million-dollarbandappeartobesticking.
Thelastquarterof2023hasseenanincreaseoflistingstomarket;vendorsregaining confidencetomarketwithanewgovernmentcombiningwithQueenstown’snormalspring surgeinlistings.
Vendorsareconfidentwiththeirpriceexpectations,sometimesbullish,whichhasdelivereda NewZealandregionalrecordaskpricewiththeQueenstownLakesDistrictaverageJanuary 2024askpriceatarecord$1,621,899(comparedtoAuckland's$1,056,375Januaryaverage askprice)See realestate.co.nzNZPropertyReport.
Insummary,forQueenstown,improvedstocklevelsoffermorechoiceforpurchasers,price expectationsremainstrong,andpurchasingatthelowerpricelevelsisoftencompetitive. Highervaluesalesareoccurring,buttheyhavenotexperiencedthesameliftinnumbersof thelowerpricedproperties.
Acuriousmixoftradingconditionswillpresentthrough2024-interestratesarelikelyto remainhigh,significantregulatoryreformwithexpectationsofrelaxingtotenancylaw, reductionofbright-linetaxtestperiods,andtheintroductionoflendingtoincomeratios;all thisandarelentlessdemandforQueenstownpropertyinaregionthatfeelsthehousing shortageatleastasmuchasanyotherregion.
NationalSales(Summary)
Nationally,salesnumbersremainatrecordmonthlylowsandaccordingtoCoreLogicthe numberofNewZealandresidentialpropertiesforJanuary2024(agent-ledandprivate transactions)wasthesecondlowestfor40years,withJanuary2023beingthelowest numberofsalesforaJanuarysince1983 [SeeCoreLogicReport].
Highinterestratesarecertainlyasignificantfactorinlowersalesfigures.Ofnote,the numberoflistingsnationallyforthemonthofJanuary2024hasincreasedasignificant 10.4%year-on-year,demonstratinganincreasingconfidencefromvendors,andoffering stimulustothemarket.
JenBaird,CEOofREINZ,writingintheREINZNationalPropertyReportforJanuary2024 says:
“JanuaryisusuallyaslowermonthforthecompletionofsalesinNewZealandandthis yearisnoexceptionwith2,995propertiesbeingsold.Whilethisis4.9%morethanJanuary 2023,theincreaseinlistingsisastrongerindicatorthatthemarketcontinuestopickup. Listingsincreasedby10.4%nationallyand5.4%forNewZealand,excludingAuckland, year-on-year.Thebiggestincreasesinlistingscomparedwiththepreviousmonthwere seeninWellingtonat148%,followedbyGisborneat84%,Canterburyat81%,andAuckland at76.8%.” [ReadREINZReport]
PropertyManagement
Queenstown'sresidentialtenancysupplyhasimprovedfromitsstateofcrisismid-2023. Whilehomesofalltypesremaininshortsupply,thechronicshortagehaseased,andrents havereachedaceilingandstabilized.Rentsarenowpredictable,andlandlordsthatask toomucharenowbecomingdisappointed.
OurTradeMewebsiterentalpropertycountisnowconsistentlyshowingabout25 propertiesasbeingavailable;thisisupfromthe10availablearoundAugust2023.The higherrentsareencouragingafewnewinvestorsbuyersbackintothemarketwhichis goodforsupplytotenants.
Wedoexpectthatwithproposedinterestdeductibilitytaxlawchangeandeasingon tenancylaws,thatpotentiallandlordswillenterthemarketaddingtopreciousavailability fortenants.
TenancyTribunalhearingsareontheincreaseastenantswhofindQueenstown'srental marketchallengingreachoutforassistance.Fisken&AssociatesLtd(Professionals Queenstown)weresuccessfulwithanappealtotheDistrictCourtoveraTenancyTribunal decisionwherethetenantwassuccessfulinhavingalowerthanmarketrentawarded whentheychallengedarentreview.AfteraninemonthwaitforaDistrictCourthearing, theappealbyProfessionalsQueenstownwassuccessfulwithJudgeTouhyoftheDistrict Courtstating,"ItisonlyonceamarketrentisestablishedthattheTribunalcandecide whethertherentpaidorpayableexceedsitbyasubstantialamount."
Eventually,commonsenseprevailed;marketrentmustbedeterminedandthebestwayof establishingthisiswithcomparablerentaldata,evenifpresentedbythelandlord.
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KylieBrown MeganPalmer StephanieDrader
HolidayHomeAccommodation
Allourholidayhomeshaveenjoyedextraordinaryoccupanciesandhighvaluetariffs acrossthissummerseason.Visitornumbersmustbeclosetothoseofpre-Covidvisitor numbers.Interestingly,occupancieshaveremainedstrongthroughJanuaryandour ChineseNewYearperiodwasthestrongestonrecordforus.
Weexpecthighoccupanciesfortheremainingseasonsthisyear.Oursummervisitors retaininggoodnumbersthroughtoEaster,andoursnowseasonisalreadyshowinghigh bookingnumbers.
QueenstownLakesDistrictCouncil'sattitudetowardsconsentingHolidayHomeusedoes appeartohaveeasedafterthemediatedconclusionoftheAirBnBappealtotheProposed DistrictPlanchangesaffectingHolidayHomeUse.Mostapplicantsthathavesuitable propertiesappeartobesuccessfulinthoseapplicationsthatarein-linewiththeirplanning advice.
Wehaveexperiencedanincreaseinpurchasersofpropertiesmakingtheirhomes availableforholidayaccommodationuse,andwecontinuetoexperienceanincreasein demandfromvisitorsforHolidayHomes.Thismodelofhomeownershipandholiday homelettingcontinuestogaininpopularity.
WeareintheprocessofupgradingourInformationTechnologyHolidayHome Managementsystemwhichweexpecttobringincreasedefficiency,improvedmarketing, quickresponsetomarketchangesintariffs,andindustryleadingownerreporting. Luise willbeincontactwithallownersastowhattheycanexpectfromthesystemasthe implementationprogressesoverthenext6weeks.
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