MARKETBEAT Queenstown Residential - Bayleys Research ...
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Autumn 2015
MARKETBEAT RESEARCH NEWSLETTER
Queenstown Residential
A strongly performing economy, which has lead to job creation, low interest rates, the attraction of the area’s lifestyle advantages
and increasing amenity have seen Queenstown’s population expand rapidly over recent years with further significant growth
forecast.
Recent years have also seen a marked change in occupation trends within the town. Traditionally Queenstown’s population
would vary significantly on a seasonal basis, peaking during the ski season and falling either side of it. Recently however
Queenstown has become a year round tourism destination which has seen the fluctuations in population becoming far less
pronounced. As the town grows it also generates more non tourism based jobs as there is a need for a larger service sector.
The above factors have combined to put pressure on the availability of housing, both for rental and owner occupation, forcing up
rental and capital values and driving an increase in section sales and development activity.
Usually Resident Population Projected Population
Increase
2001 2006 2013 2006-2013 2018 2023 2028 2033 2038 2043
Queenstown 17,043 22,956 28,224 22.9% 33,800 37,300 40,700 44,000 47,300 50,600
Source: StatsNZ
The latest Census figures show that Queenstown’s
population has reached 28,224, an increase of 5,268
people or 22.9% since 2006. the rate of growth eclipses
that registered in both the Auckland Region, 8.5%, and
of New Zealand as a whole, which grew by 5.3% over the
same time period. Population growth across the Country
has accelerated over the last year due to record breaking
migration levels to New Zealand of over 50,000 people in
2014. While Auckland is the main recipient of immigrants the
last two years has seen Central Otago attract far more long
Bridesdale Farm term migrants than has been the case over recent years. With
the region having a net gain of 1,475 people in the year to
January 2015 compared with 42 in the 12 months to January 2013.
While these record levels of migration will not be maintained over the long term, Queenstown Lakes District is forecast to have
the fastest population growth of any district between 2013 and 2043. Projections published by Statistics New Zealand are for
between 1.2% and 2.3% annual growth for the area until 2043 which while lower than the 3% annual growth recorded for the
2006-2013 Census period will still run ahead of the national average.
Catering for the influx of residents and tourists alike, Queenstown Airport continues its strong performance with December
international passenger numbers 34.4% higher than the corresponding period last year. Total passenger numbers were up
16.3% with an increased summer flight schedule, with as many as eight international flights per day, and the addition of Jetstar’s
Gold Coast service, making access to the resort town progressively more accessible. With the busiest and most lucrative
summer on record in Queenstown, immigration rules were relaxed in a trial temporary move. Until June 2015 employers will no
BAYLEYS RESEARCH - MARKETBEAT - QUEENSTOWN RESIDENTIAL
longer be required to check whether eligible New Zealand
Queenstown Dwellings
workers could fill vacancies in the resort which appears to
Increase
be no longer just a winter season resort town.
2001 2006 2013 2006-2013
The development sector is responding to this uplift in
Occupied 6,789 9,294 11,508 23.8%
demand, and between 2006 and 2013, development
Unoccupied 2,949 3,840 4,467 16.3%
of dwellings has kept pace with the population growth.
Source: StatsNZ
The total number of dwellings in Queenstown Lakes
District has increased by 23.8% taking the total to 15,975, a total which includes both occupied and holiday homes. The rate of
construction has been maintained post Census with numerous new housing developments underway, which we will dicuss in
further detail later.
Demonstrating a continued economic recovery, the level
of building consents has had a marked increase since mid
2013 and continues to climb to the highest levels seen
since the Global Financial Crisis (GFC) in 2008. Building
consent numbers peaked at 171 in the Queenstown
District in the June 2014 quarter, and lulled slightly at the
December 2014 year end, to 161 consents. Since June
2013 when consents near doubled from the quarter prior,
building consent numbers have been comfortably above
the long term average number of 114.
Source: Bayleys Research
Queenstown Median Price Hot Spots
Unsurprisingly the rising population and
demand for housing in Queenstown has
put pressure on housing stock and, in
turn, both rental and capital values. As
stated above the population make-up of
stable residents has increased noticably
which has led to far less ‘churn’ within
the rental market. The result is that
residential rental agencies are reporting
a real shortage of properties for rent with
no vacancy. This has put landlords in a
strong negotiating position with tenants
now typically being locked in for longer
term leases, usually twelve months,
with rental prices up 10-15% over the
past 2 years, in a similar pattern to the
Auckland rental market.
The latests residential sales statistics published by the Real Estate Institute of New Zealand (REINZ) show that the residential
property market in Queenstown continues to perform strongly. Over the period between December 2011 and December
2014 the median sales price has increased by 15.9% from $448,750 to $520,000. The median price reached its peak in the
September 2014 quarter at $546,500.
BAYLEYS RESEARCH - MARKETBEAT - QUEENSTOWN RESIDENTIAL
Source: REINZ, Bayleys Research Source: REINZ, Bayleys Research
Sales volumes have been climbing steadily since the low
Jan 2015 Long Term Average
of 2008, when the impact of the GFC and New Zealand’s
Listings 235 278
recession was at its greatest. During the 2008 calendar year
REINZ recorded only 630 sales across the Queenstown region. Sales 119 100
Sales activity climbed steadily from this point with 901 sales Inventory 1,287 1,812
being recorded in 2013. The 2014 figure falls slightly short of the Weeks to Sell 46.9 86.6
2013 figure, which is likely down to the Reserve Bank of New Source: REINZ, Bayleys Research
Zealand’s (RBNZ) loan to value ratio (LVR) restrictions being
implemented in October 2013 but also a shortage of listings being brought to market as illustrated in the table above. The time
that it would take to sell the area’s total inventory currently sits at 46.9 weeks, which is historically low when compared with the
long term average of 86.6 weeks to sell all stock. The cause of this is sales numbers are up with 119 sales in January 2015, and
total new listings are lower at 233, resulting in total inventory being about 500 fewer properties than is usually on the market in the
region.
Days on the market figure bottomed out in the December quarter of 2013 with homes taking on average 56 days to sell. This
stretched out to 71 days to sell in the final quarter of 2014, with the long term average in Queenstown being 63 days on the
market.
While the relatively small number of sales recorded in Queenstown tend to make quarterly medians volatile, as illustrated in the
graph above, save fluctuations, the median has trended upwards since mid 2013 after a plateau since 2008, reaching $520,000
in the December quarter of 2014.
Glenorchy, a settlement to the north west of Queenstown on the shores of Lake Wakatipu, experienced a 40.5% median increase
from 2013 to 2014, with affluent Queenstown peninsular suburb Kelvin Heights growing 31% in twelve months.
Queenstown central also saw significant increases in its median sale price from $450,000 in 2013 to $533,000 in 2014, an 18.4%
increase. Fringe suburb Fernhill increased from $450,000 to $465,000 in 2014 and new development areas Lake Hayes and
Jacks Point rose just over 2% in the past twelve
Queenstown Suburb Breakdown
months.
2013 2014 % Growth
Glenorchy $370,000 $520,000 40.5% Unsurprisingly the housing shortage has
resulted in a significant lift in section sales with
Kelvin Heights $685,000 $897,000 31.0%
purchasers looking to secure sites for new
Queenstown $450,000 $533,000 18.4%
homes. The sales are occurring across all value
Fernhill $450,000 $465,000 3.3% bands. Agency reports advise of a noticeable
Lake Hayes $610,000 $624,750 2.4% lift in section sales within the exclusive Jacks
Jacks Point $806,000 $824,000 2.2% Point development where 40 sections have
Source: REINZ, Bayleys Research
BAYLEYS RESEARCH - MARKETBEAT - QUEENSTOWN RESIDENTIAL
Queenstown Price Bracket Breakdown 2008
Jacks Point
Source: REINZ, Bayleys Research
sold since August last year, with the majority of buyers
Queenstown Price Bracket Breakdown 2012
coming from Queenstown and neighbouring regions. Entry
level sections are available from $200,000 to $340,000 for
between 500m² and nearly 2000m² sites, with room for only
1,300 homes when the development is completed.
Among a number of new residential developments in the
Queenstown area, Bridesdale Farm in its initial release
weekend, had 60 of its total 147 sections sold pre title,
with titles expected in 14 months time. Bridesdale Farm
is designed to have a proportion of affordable homes as
outlined in the governments Housing Accord. With strict
design guidelines, purchasers can choose from nine different
architecturally designed plans for the sites, each site is
Source: REINZ, Bayleys Research
allocated a garden plot in the Bridesdale Farm Garden area.
All sites are approximately 500m², and will be on freehold Queenstown Price Bracket Breakdown 2014
titles with no body corporate fees. Shotover Country is
another affordable new residential development neighbouring
Bridesdale Farm. This was sold directly by the developer
with no design guidelines and most purchasers being first
home buyers. Sections in Shotover Country start from
500m² fetching above $200,000 and when completed the
development will house 700-900 dwellings.
Source: REINZ, Bayleys Research
BAYLEYS RESEARCH - MARKETBEAT - QUEENSTOWN RESIDENTIAL
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