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3 minute read
For many years Queenstown and the surrounding central Otago Lakes area have been one of the jewels in New Zealand’s crown, drawing people from around the world and from within to marvel at its stunning natural beauty and revel in its fresh mountain air.
That reputation endures, even after the major blip of Covid. According to Queenstown Chamber of Commerce boss Sharon Fifield, tourism is once again booming, even if the latest Middle East Oil Crisis has dented business confidence somewhat.
“We have just been dealing with record growth with post Covid visitor numbers now surpassing where they were in 2019 pre-covid. Queenstown Airports had the busiest months on record in January and February, so It’s really been a booming economy,” she says.
With its established reputation and popularity as a great holiday destination, Queenstown has understandably become an increasingly popular place to make a home, both for Kiwi families, retirees, entrepreneurs, and a growing number of international migrants.
That interest has fueled a property boom during the past 10+ years, which while slowing slightly in recent years remains buoyant and is still outperforming most areas around the country.
According to Quotable Value, Queenstown has recorded a 1 per cent increase in property values during the past year, with an average property price of just over $1.9 million. That compares to Auckland at $1.19 million, Wellington at around $910,000, and Christchurch at nearly $800.000.
Here at Southern Cross Partners, we’ve been keen to take advantage of that trend by providing more opportunities for our investors and borrowers by increasing our lending to developers in the region.
Since investing in a Southern based business development manager three years ago, we’ve increased loans in the Southern Lakes area from around a dozen between 2018 and 2024 to around 50 during the past couple of years. All of these are secured with the quality properties the region is known for, providing excellent opportunities for our investors.
While the property market is flat around much of the country, Queenstown is still performing well, though it has slowed slightly. According to Bayleys Queenstown figures, 54 houses sold in the Queenstown/Arrowtown area this February compared to 74 last February. However, the median sale price of those homes increased from $1.17 million to $1.5 million, and on average, took less than 20 days to sell compared to the national average of 56 days.
Bayleys Queenstown Branch manager, Stacy Coburn believes the Queenstown market has now settled after the sharp uptick in sales after Covid. Although, he’s seeing increasingly strong interest from overseas investors, particularly from North America. Coburn believes the interest could be attributed to driving sales domestically, particularly from North Island buyers looking for a better lifestyle and keen to get in before prices are further inflated by foreign buyers.
However, Coburn highlights that supply may not be the problem going forward as the Queenstown Council plans to open up land for another 9300 homes during the next 20-30 years just south of Queenstown.
In the short term, some in the region still see plenty of potential for growth in the wider Southern Lakes area. According to Infometrics, last year there were 365 residential building consents issued, down from the peak of 418 in 2024, but still well ahead of the 10-year average of 301 per year.
Joel Peasey, Queenstown branch manager for Your Mortgage Team, says an increase from $1,000 to $ 1,300 per square meter of land over the last couple of years has slowed construction slightly in Queenstown, with developers having their margins cut.
While the construction market is still buoyant, Peasey says developers are having to be more strategic with the types of homes they’re developing, with turnkey first home buyer homes proving to be more profitable than high end builds. Surrounding areas like Wanaka with cheaper land prices are also becoming more popular.
All of the people I spoke to while writing this blog agree the biggest hurdle to Queenstown’s continued success and growth is a lack of quality infrastructure. The town’s Wastewater treatment plant has been stretched beyond its limit during the past year, while increased housing and development has made congestion on the roads a major ongoing problem for tourists and locals alike.
Many have raised the need for a bed levy or arrival tax for the estimated 3 million tourists who visit each year, so some of the burden can be lifted from local ratepayers and funds can be put towards the vital infrastructure which keeps the district operating.
Whether that happens may decide if Queenstown and its surrounding district remain the success story it has clearly been.