Queenstown – What’s Happening
The Gibbston Valley Music festival last weekend was the best yet, the weather cooperated turning on a classic central Otago summers day. Billy Idol, George Thorogood and the Destroyers, Anastacia, Credence Clearwater Revisited and Smash Mouth all performing for one massive concert.
We are regularly reminded of the challenges our Australian friends are facing with smoke now often visible in our own skies, and on several days, visibility dropping to surprising low distances.
Activity has been on the increase since the August 2019 Reserve Bank Official Cash Rate reduction of 0.5%. This was clearly the shot in the arm the real estate market was in need of after the suppressing effects of the threat of Capital Gains Tax, an increased BrightLine taxation period, LVRs and Foreign Buyer bans across 2017 and 2018. Sales volumes across 2017 to 2019 have, in reality, been flat. Buyer activity both in enquiry and purchasing is now picking up and currently in January 2020, real estate salespeople are experiencing a jump in enquiry and viewings. Anecdotally real estate salespeople are reporting a small increase in listings coming to market, indicating an improving confidence for vendors as well, although this optimism is not yet backed up by the new listing statistics (below). Inventory levels remain relatively tight, running around the 21 to 28 weeks over the last few months.
Investor buyers are returning to the market place, again August’s reduction in the OCR being the trigger to induce investor interest otherwise absent since 2017.
Those buying or selling in the Queenstown market should take note of December’s statistics for New Zealand with the highest number of houses sold in the month of December in three years and median price rises in 15 out of the 16 regions. The market is clearly on the move at the national level.
65 residential properties sold for the month of December for Queenstown, which illustrates improving confidence. Median sale price over the last 3 months has been at a low ebb: $941,000 for December compared to the high of $1,060,000 for the year recorded for May 2019.
Five sales over $2,000,000 is a good result, hopefully indicating improving confidence for the higher value properties. Perhaps we may see a decrease in inventory or the number of these high value properties currently for sale.
Our listing data is supplied by www.realestate.co.nz; they report for the region of Central Otago-Lakes District (Wanaka and Queenstown) for the month of December 2019:
December’s report also allows us to review the last year’s sales performance. Queenstown recorded 897 sales for the 12 month period ending 31 December 2019, some 2% up on 2018’s 840 sales but a dramatic decrease of 29% from 2016’s 1201 sales which was fuelled by investor buyers purchasing outside of the Auckland region’s LVR restriction.
Queenstown Rural Residential and Lifestyle
Rural sales have not had a good year, 43 sales for 2019 which is down 20% compared to 54 for 2018. The statistics are describing what we have been seeing in the market place. It is not easy to provide accurate commentary on this segment but it appears to be changing demographics with more stability in ownership, weaker market conditions and the absence of foreign buyers that are contributing factors.
Seven sales for the month of December is a good result compared to a monthly average of 3.6 sales per month for the year. Too early to call a trend, but it is time that market activity improves for this segment as well.
Inventory of high end properties currently for sale continues to grow. The following count is from www.realestate.co.nz
Kingston – Glenorchy – Arrowtown
No sales for Glenorchy for the month of December 2019, but perhaps not surprising with only three rural lifestyle currently for sale in the area, no residential homes available.
Please call Stephanie for the latest information.
Four properties were sold in Kingston for the month of December; two vacant land parcels and two homes. There are currently five properties listed for sale and Mescha is reporting strong buyer enquiry from motivated purchasers. It may well be an active summer for Kingston.
Contact Mescha to learn more.
Four sales for Arrowtown for the Month of December 2019, seven homes and two lifestyle properties (excluding Millbrook) are currently for sale. Low inventory levels and low sales numbers to match.
New Zealand rounded off the decade with the highest number of residential properties sold for the month of December in three years and price rises in 15 out of 16 regions, according to the latest data from the Real Estate Institute of New Zealand (REINZ), source of the most complete and accurate real estate data in New Zealand.
The number of residential properties sold across New Zealand in December 2019 increased by 12.3% from the same time last year to 6,285 up from 5,596 (689 more properties). [See REINZ Report]
The total number of properties available for sale nationally decreased by -24.5% in December to 18,230, down from 24,158 in December 2018 – a decrease of 5,928 properties compared to 12 months ago and the lowest level of inventory since records began.
Auctions were used in 14.1% of all sales across the country in December, with 883 properties selling under the hammer.
Westpac’s Weekly Economic commentary for 20 January 2020 is headed up “2020: The good, the bad and the election”:
“For our first issue of 2020, we’re taking a look at how the New Zealand economy has been tracking, and some of the key areas that we’ll be watching over the year ahead.” [See Westpac report]
There appears to be little in the way of vacancy for residential properties. Most properties in all areas of Queenstown are being secured by tenants in a short time. New properties to market seem steady, rents remain firm, but no significant rises in rentals are being experienced.
The market is maturing, with growth in demand for guest nights plateauing there is competition for room nights and care is to be taken with setting tariffs. That being said, all our properties are performing to expectations and generally earning returns over that of residential properties. Our management and marketing systems are running very smoothly, freeing time for both Laura and Sharlene who are ready for more properties. If you are considering operating your home in the holiday letting market, talk to Laura, Sharlene or Kylie for expert advice.
Principal Agent and Director AREINZ MNZIS
Thinking of making a move in 2020?