Queenstown Enjoying Commercial Boom, $60m in House Sales in April
The commercial construction industry and residential property markets in Queenstown are booming as a raft of major projects gain momentum and first-time buyers scramble for homes.
Most of the commercial development is around Frankton, at the old Five Mile site, Glenda Drive, the Ladies Mile State Highway 6 realignment and roundabout and a project to replace the single lane bridge at Kawarau Falls, which starts this year.
Tourist numbers are up, a new secondary school will be open by 2018, Queenstown Airport is expecting it’s busiest winter and new subdivisions are in the pipeline.
The “Five Mile” site has been transformed from the days when it was languished undeveloped as “Hendo’s Hole”, after developer David Henderson’s retail and residential project went south in 2007.
A new international terminal at Queenstown Airport is on track for completion by mid-June in time for the winter ski season.
Queenstown Real Estate Institute of New Zealand (REINZ) spokesman Kelvin Collins said the resort’s market has been very active this year – with sales worth more than $60 million during April including 10 sales of properties for more than $1 million each.
The monthly sales figure, in financial terms, was the highest in Queenstown since January 2006, before the global financial crisis hit.
“This level of sales value was enhanced by 10 sales over $1 million including a building housing three apartments in central Queenstown which sold for $7 million. There was also good demand for houses in the $800,000 to $900,000 price bracket which accounted for 25% of total sales. This is the most active this sector has been for several years caused by an increase in demand from residents moving to the area and local residents having more confidence in their financial security and upgrading.”
Collins said there continued to be a shortage of property under the $500,000 mark. Agents were dealing with multiple offers from first-time buyers in the resort, which made buying a first home all the more difficult.
He said the $60 million in sales was the highest in terms of real estate value since 2006, as opposed to volume.
The real estate market in Queenstown was under pressure as it was driven by population growth , he said. The Queenstown Lakes District has one of the fastest growing populations in New Zealand.
“The market is currently driven by population growth. It’s not speculative. That’s mainly young families. We’re seeing quite a few couples who have been flatting and the stability of interest rates has given them some confidence. There’s some real pressure on the market now. What we are seeing is activity at the higher price range.”
Last year first-time buyers were aiming for homes in the $500,000 to $600,000 bracket but this year, with more demand and dwindling stock, the first time buyer bracket moved to the $700,000 to $800,000 bracket, Collins said.
“That’s because there are no houses available. That’s forcing some people to buy a more expensive house. There’s a real shortage.”
The shortage of properties under $500,000 was one of the main reasons for the Government housing accord with the Queenstown Lakes District Council, although the agreement has not been met with widespread support.
Last month there were 65 house sales compared with 41 last April, while the average house price in the district has increased by 20% in a year to $670,000.
Source: The Southland Times