Queenstown Market Report November 2022

QUEENSTOWN MARKET REPORT

QueenstownAreaSalesTotals 63 69 93 81

MedianResiden�alDwellingPrice $1,260,000 $1,200,000 $1,342,500 $1,318,500

MedianResiden�alDwellingDaystoSell 49 52 38 40

MedianResiden�alLandDaystoSell 36 105 54 39 MedianApartmentDaystoSell 123 68 48 63 SalesOver$1Million 17 10 26 16 SalesOver$2Million 7 5 9 5

SourceREINZRuralandResiden�alDatabasesandREINZMedianReportR200 Wri�en:30Nov2022 SourceofdataforthisreportisRealEstateIns�tuteofNewZealand(REINZ)publisheddata,unlessotherwisestated. NotetheApartmentsalescountarealsoincludedinthedwellingsalescount.

Summerisnearlyhere,butwithwhatseemslikenothingbutrainforthreeweeks,along withafewsnowfalls,itdoesnotfeellikeityet.

TheQueenstownMarathonranlastweekend,withover13,000entrantsacrossthekids’, half,andfullmarathons;internationalentrantsmadeup14%ofthefieldfromplaceslike Australia,SouthAfrica,andGermany.TheweekendwastrulybusyforQueenstownwith estimatesofaround$20millionbeingspentintheQueenstowneconomyovertheevent.

63residentialsalesforQueenstownforthemonthofOctoberisconsistentfor2022sales, althoughthelowestnumberofsalesforanOctoberinthelast10years,andwehavetogo backtoOctober2012at59salestofindalowerOctobersalescount.

SalesyeartodateOctober(10months)suggeststhat2022salesaresome: � 37%downforthesameperiod2021, � 2.2%upcomparedtosameperiod2020,and � 14%downcomparedtosameperiod2019

Itisfairtosaythat2022,at603salesyeartodate(10months),isasloweryearforsales and,surprisingly,iscomparableto2012at608salesforthesameperiod.Comparingto 2012isalittlesoberingasthisisrecognisedasthelastyearofrecoveryforQueenstown realestateafterthe2008Globaleconomicrecession.Perhapswearemissingsomeofthe largerdevelopmentsalesafterahiatusovertheCovidlockdownyears.

Thenumberofsalesmayhavedeclined,howevervaluesofpropertiessoldremains consistentlystrongandaskingpriceshavereachedrecordlevels.Mediandaystosellat49 hasclimbedfromthe12monthlowof36daysinNovember2021,butisnotfarabovethe averagedmonthlymediandaystosellforthelast24months,whichisat43daystosell. Asmallliftinnewpropertiestomarketreflectsnormalseasonaltrends,butthisliftisless thanthatexperiencedforthesamemonthsin2020and2021.

Insummary,itappearsasthoughbuyersmayhaveslowedtheirprocessesofpurchasing, andeconomicheadwindsarebeingfelt,butnumbersofpropertiescomingtomarket remainlessthenexpected,meaningsupplyisshortandexplainswhysalestodatehave deliveredstrongprices.

MediansalepriceforthemonthofOctoberwas$1,260,000,whichisnowafivemonth trendofmonthlymediansalepricesrunninginthe$1.2milliondollarband.Peakmedian housepriceof$1.425millondollarsappearstohaveoccurredinMayof2022.Therelative stabilityandstrengthofmedianhouseprices,togetherwithstable(butclimbing)median daystosell,supportthepropositionthat,ingeneral,shortageofsupplyisadominantfactor inQueenstown’smarket.

Queenstownhasyettoexperiencethecoolingindemandandreductioninsalepricesthat AucklandandWellingtonhave,butincreasingmediandaystosellmaybeanindicatorthat changemaybeaheadofus.Queenstowndoesattractpurchasersfromaroundthecountry andaroundtheworld,whichdoesprovideabufferfrommorenormal,regional-onlymarket factors.

TheQueenstownrealestatemarketdoeshaveabroaddemographicrangingfromnormal familiesworkinghardonhomeownership,tothosethatareabletoaffordhomesother thantheirmainresidence,andthosethatareabletoeasliyaffordexpensivehomes.

Increasesincurrentcostoflivingandrapidlyincreasinginterestratesmusthavea negativeimpactonaffordabiltyformorenormalresidentialpropertygoingforward. Theeffectonnormalhomesaleswillbestatistciallymaskedbythesecondaryhomesand higherratioofhighvaluepropertiesthattransactinQueenstown.

www.realestate.co.nz provideourAverageAskpricefordwellingsacrosstheQueenstown LakesRegion(WanakaandQueenstownDistricts).AverageaskpriceforOctober2022 hasreachedaNewZealandrecordof$1,541,082,whichisan8%increasefromNovember 2021and$400,000morethantheaveragehomeinAuckland.

Justasinteresting,QueenstownLakesRegionalsorecorded,forNewZealand,thesingle largestdropofnewlistingstomarketforNovember2022:190newlistingstomarket, beingadecreaseof35%comparedtoastrongOctober2021of293newlistings.

Inventory,orthenumberofweeksitwouldtaketosellthecurrentnumberoflistingsatthe currentrateofsalespermonth,hasshownasmallincreasefrom16weeksinMay2022to 20weeksforOctober2022.Thenumberoflistingsavailableforsaleremainsrelatively constant,withinventoryliftingslightlyassalesslow.

NewZealandDwellingSales

ThenumberofsalesforOctober2022is4892;a35%decreasefromOctober2021.

MedianhousepriceforrealestatesalesforNewZealandcontrastwithQeenstownsales, decreasing7.5%annuallyto$825,000forOctober2022,downfrom$892,000inOctober 2021.

SalesnumbersforrealestatesalesforNewZealandaresimilartothoseofQueenstown andaresome27%downyeartodate(10months)toOctober2022,comparedwiththe sameperiod2021.

"TakingNewZealandasawhole,listingsweredown4.0%comparedtothesameperiod lastyear.However,nineregionssawanincreaseoflistingscomingontothemarket— springtendstobeapreferredtimetosellaspeoplelooktomaketheirmovesaheadofthe holidays.

“Therearesignsofmorebuyersreturningtothemarket.Owneroccupiers—backedby equity—stilldominatethemarket.Butwithanincreaseinpropertyonthemarket,easing prices,andbanks'lendingagain,weseefirsthomebuyersdippingtheirtoesin.Whilethis ispositivenews,furtherincreasesininterestratesareputtingadamperonbuyingplansin thisbuyergroup,andwehaveyettoseetheirinterestreflectedinsalesactivity.Meanwhile, reportsfromsalespeopleacrossAotearoasuggestinvestorscontinuetostepback." [SeeREINZReport]

JenBaird,ChiefExecutiveatREINZ,comments:

KEYDATA SUMMARY

MEDIANHOUSEPRICEYEAR-ON-YEAR

Na�onal

NewZealandExAuckland Auckland

$825,000-downfrom$892,000-7.5%year-on-year $725,000-downfrom$750,500-3.4%year-on-year

$1,090,000-downfrom$1,249,000-12.7%year-on-year

MEDIANHOUSEPRICEMONTH-ON-MONTH

Na�onal NewZealandExAuckland Auckland

VOLUMESOLDYEAR-ON-YEAR

Na�onal NewZealandExAuckland Auckland

$825,000-upfrom$810,000+1.9%sincelastmonth $725,000-upfrom$714,000+1.5%sincelastmonth $1,090,000-upfrom$1,038,000+5.0%sincelastmonth

4,892-downfrom7,486-34.7%year-on-year 1,554-downfrom2,688-42.2%year-on-year

3,338-downfrom4,798-30.4%year-on-year

VOLUMESOLDMONTH-ON-MONTH

Na�onal

NewZealandExAuckland Auckland

REINZHOUSEPRICEINDEX

Na�onal

NewZealandExAuckland Auckland

Na�onal

NewZealandExAuckland Auckland

MEDIANDAYSTOSELL

Na�onal

NewZealandExAuckland Auckland

4,892-downfrom5,113-4.3%sincelastmonth 1,554-downfrom1,693-8.2%sincelastmonth

3,338-downfrom3,420-2.4%sincelastmonth 3,886-downfrom4,242-8.4%year-on-year

3,744-downfrom4,200-10.9%year-on-year 3,550-downfrom4,144-14.3%year-on-year

Up0.7%,down7.5%onOctober2021

Up2.1%,down12.7%onOctober2021 Down0.3%,down3.4%onOctober2021

44-10daysmorethanthesamemonthlastyear 44-14daysmorethanthesamemonthlastyear 43-2dayslessthanthesamemonthlastyear

Westpac’sWeeklyCommentaryfor28November2022isheadedup “Itwon’thappen overnight...”:

“TheReserveBankdeliveredajumbosized75basispointriseintheOfficialCashRateat itsNovembermeeting.Thecentralbankalsosignaledthatthecashrateislikelytorise muchhigherinthemonthsahead.WehaverevisedupourforecastfortheOCRandnow expectapeakof5.50%inearly2023.ForNewZealandhouseholds,thatsignalsbig increasesinborrowingcosts.Andasthosehigherinterestratesripplethroughthe economy,we’relikelytoseegrowthslowingandunemploymentrising.”

SeeWestpacReport

ResidentialPropertyManagement

ConnectwithourPropertyManagementTeamtoday

Theextremeshortageofpropertiesavailableforrentcontinues;thismonthonly21, comparedto29propertieslastmonth,andsome220forOctober2021.

Askingrentalson www.realestate.co.nz rangefrom$150perweekthroughto$2500per week.Thepressureisonrents,andweexpectthatstatustoremainsoforquitesometime. Weexpectthatmostpropertyownerswillbewantingtotakeadvantageofcurrentmarket conditionsandseekrentreviewsastheycomedue.

Rentalincreasesarehurtingmanytenants,andweunderstandthatthereisasurgeof claimsbeingmadewiththeTenancyTribunalforassessmentastomarketrent. Therewillbeaperiodofinstabilityaheadofusastenantsthatmovedupthequalityladder whenrentswerelowin2020and2021,cometotherealizationthattheymaynowneedto changedownthequalityladder.

HolidayAccommodation

HolidayAccommodationcontinuesitsstrongrun;demandremainshigh,andbookings continuetoflowforasfaroutas12months'time.Tariffsarestrongandwilllikelyincrease.

Forthefirsttimesinceborderclosures,foreigntravellersarenowvisibleonourstreets, sightseeingandoutonactivities.Theoldnormalisback.

Wenowexpectthatallaccommodationproviderswillexperiencefurtherdemand pressures.

Demandforholidayhomesisaheadofthepre-borderclosureperiodandinlinewiththe resurgenceofinternationaltourism;so,ifyouareconsideringeitherchangingyourcurrent managerorlettingyourhomeintheholidayaccommodationmarket,wewelcomethe opportunitytotalktoyouaboutpotentialincomesandourservice.

KylieBrown MeganPalmer StephanieDrader