Queenstown – What’s Happening
The curtains closed on all our local ski fields last weekend as the kids headed back to school for the last term. Our weather is running the normal spring cycle of delivering every weather imaginable over any one week. With school now back our visitor numbers have quietened too, reminiscent of Queenstown 25 years ago. Queenstown now looks forward to the Christmas holiday period, where all indications are that it will once again be busy.
The sales of Queenstown residential real estate are back in strong form. Queenstown real estate agents recorded the best September in three years, a 16 month quiet phase from April 2019 now seemingly at an end. 84 sales of residential land and homes is a good result for any month, the last time sales at this level were being regularly achieved was in 2016.
20 section sales is a strong result. Notably, sections sales were across the spectrum from lifestyle to residential and through all suburbs, ranging in prices from $325,000 to $2,350,000. Demand for vacant land has increased along with housing, ending a noticeable slow period of sales for vacant land.
This lift in Queenstown residential sales is very much in line with national real estate sales which experienced the highest number of properties sold in 42 months during September, with a staggering 13 regions across New Zealand experiencing annual sales volumes in excess of 20%.
The median house price for Queenstown for the month has unsurprisingly increased to $1,150,000, compared to the previous high of $1,155,000 in January 2020.
Median days to sell for dwellings is down to 45 days for September 2020, compared with 52 for the same month 2019. Another indicator that the market has gained confidence.
It appears as though any concerns that the market may have had as a result of border closures is now well behind us.
With the increased sales activities and improving sales prices, vendors’ confidence has returned and their expectations from a sale price are also increasing.
Just to balance the enthusiasm currently being displayed, the number of residential sales recorded for Queenstown for the year to date is 478, some 24% lower than the same period 2019 and a staggering 48% down compared to the same period 2016 at 989 sales. Perhaps there is an element of just catching up for the first 6 months of 2020 which was clearly traveling at a very low rate.
www.realestate.co.nz supply our listing data. They report for the region of Central Otago-Lakes District (Wanaka and Queenstown) for the month of September 2020:
In summary, low interest rates (temporarily) removing Loan to Value Restrictions, a low yield investment environment, an inward focus as Kiwis are confined to their own country, and returning Kiwis are all placing pressure on the real estate market.
Specifically for Queenstown, border closures have just not had any negative effect on real estate sales as initially expected from media commentary. Perhaps we have Winston to thank for closing off foreign purchasers for us back in 2018, the market has already adjusted to the absence of foreign purchasers.
What is clear is that for the many purchasers that were expecting bargain purchases, that window of opportunity has clearly passed within several months of lock down and sentiment of purchasers has now switched to “Fear Of Missing Out”.
Kingston – Glenorchy – Arrowtown
Kingston recorded two good sales for September 2020. We are very pleased with our sales of a high value home on Wesney Terrace at $747,300 and a high value rural lifestyle block at $575,000. We have
several Lakefield sections under contract demonstrating that there is reasonable activity for vacant land sales. Enquiry and activity is running strongly as it is for the rest of New Zealand and we expect reasonable numbers of contracts over the coming months.
There are five homes currently for sale which represents a current period of relatively low listings. There is a good selection of residential sections for sale at Lakefield Estates.
Contact Mescha to learn more.
Glenorchy recorded two residential sections sold for the month of September, sales continue to be inhibited with few properties available for sale. There are two residential homes currently listed for sale which is a high number compared to the last six months of almost no homes for sale. It remains a good time to come to market for a Glenorchy property. Contact Stephanie to learn more.
Arrowtown recorded a stellar month of sales for September 2020. Eleven residential properties in the Arrowtown suburb with a further five sales recorded for Millbrook; the sales ranging from a $440,000 Arrowtown home to a $5.5m Millbrook home. These high sales numbers riding off the back of an influx of listings over the last 3 months.
Property Asking Price New Zealand
From www.realestate.co.nz NZ Property Report September 2020
Property Asking Price Auckland
From www.realestate.co.nz NZ Property Report September 2020
In summary, as it is for Queenstown, this increased activity is being driven by extremely low interest rates, purchasers with additional cash given they are now forgoing overseas travel, and returning expats.
Westpac’s Weekly Economic Commentary for 20 September 2020 is headed up “Agri exports are doing well, but what are the risks”
“The economy’s surprising resilience to Covid-19 continues, and has been most evident in agricultural exports. New Zealand’s exports are now heavily concentrated on China. The risks involved in being so focussed on one country are more pertinent for some export sectors than others. Meanwhile, New Zealand’s election later this week seems unlikely to elicit a large market reaction.” [See Westpac Report]
The stability of our new normal continues. In reality this means the big changes to the market place have occurred, but there remains a significant level of instability with tenants. Many tenants remain under financial stress with lost jobs or reduced pay and hours. We continue to work successfully with a number of tenants who find themselves in situations not of their making. We continue to be impressed with the understanding of our property owners and with the determination of our tenants to make good on rentals.
The vacancy levels of our portfolio continue to reduce thanks to the hard work of our three managers, with vacancy for us now approaching 10% which is well below market averages. It is clear that tenants in general continue to leave and then avoid poor quality homes but look for and rent newer, quality properties for similar rentals.
I remain proud of how our managers have responded to this market event and I am very pleased with how they have conducted themselves, treating landlords and tenants alike with care and respect, negotiating solutions that work for all. Their results speak for themselves - lower than industry standard vacancy. If you would like to consider a new property manager then please feel welcome to contact either Steph, Megan or Kylie.
I am pleased to report a successful winter season period for our visitor accommodation homes. Results for our owners are surprisingly pleasing for June through to September. The rest of New Zealand has been kind to us by visiting for some alpine winter sport and staying for relatively long periods. We now enter our pre-Christmas shoulder period where bookings are reduced. Laura is taking this time to work on scheduled maintenance, home improvement and system improvements.
If you are considering a holiday to Queenstown over the summer holidays, we do recommend making bookings now; Kiwis are making the most of holidaying in country this year and the availability over the peak periods is disappearing.
We are now actively looking for new homes to manage in the Holiday Accommodation market. We are pleased with the performance of all of our homes given the closed borders and we can demonstrate acceptable incomes. If you have recently purchased a new holiday home, or would like your home to earn revenue yet be available for your use, then please contact Laura.
We have some lovely homes available with great rates on offer. If it is time to treat yourself and family to a South Island getaway, book direct with us for your next holiday www.queenstownholiday.nz
Thinking of Christmas in Queenstown? Call direct to take advantage of some homes that have been released to market. Call Laura to book Christmas on 021 277 8662.
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