Queenstown Set To Continue As New Zealand’s Residential Property ‘barometer’ - With New Auctions Announced

The 2021 state of New Zealand’s fizzing real estate market is set to be tested yet again in the Central Otago township of Queenstown – with the country’s first large-scale portfolio of auctions announced for early February.

Some 27 residential properties – encompassing a range of desirable owner/occupier residences, investment homes, and bare land sections – will go under the auctioneer’s hammer at Bayleys Queenstown on February 12.

In May last year, the eyes of New Zealand property owners nervously focused on the town when it became the country’s first regional location to undertake a substantial one-day auction of some 21 listings during the early stages of the Covid-19 response.

Prices achieved under the auctioneer’s hammer surprised most – reflecting a deep underlying confidence in not only the region, but the residential property sector… a forecast which duly came to fruition as the year rolled on.

Bayleys Queenstown managing director David Gubb said it was amazing to think that eight months ago Queenstown as a whole was supposedly on the edge of a predicted economic abyss, but was now instead trading strongly - thanks to domestic tourism kicking in, and New Zealand’s economy faring far better than many economists had thought.

“Consequently and in parallel, the Queenstown residential property market has also held up contrary to predictions,” said Mr Gubb.

“Those people in particular who bought Queenstown property in the second quarter of last year when the market was flat and directionless, or who chose to ride out the turbulence of uncertainty, have certainly come out ahead of buyers who chose to adopt a ‘wait and see’ strategy.

“It’s like the old adage… fortune favours the brave.”

Mr Gubb said the upcoming February auctions – to be held at the Sofitel Hotel in Queenstown – would once again be seen as the ‘headlight indicator’ for the rest of New Zealand in the months to come.

“The number of properties up for auction next month is up sharply from the event we held in May last year. The substantial number of properties to be sold opens the door of opportunity for those wanting to move up the property ladder, purchase a holiday home, or build in the region,” Mr Gubb said.

“Queenstown hasn’t had the spectacular capital value growth last year that other regions such as Dunedin have enjoyed, and time will tell whether 2021 will bring a renewed burst of growth for the town.

“Feedback from property viewings already conducted ahead of the auctions is that Aucklanders and buyers from Dunedin and Southland are looking for holiday homes in and around Queenstown. Open home numbers have been strong over the Christmas/New Year holiday break and we expect this trend to continue in the foreseeable future.

“Looking through the portfolio of auction listings, there really is something for everyone at all price points – investors seeking returns, owner/occupiers looking for their next rung up the property ladder, and add-value opportunities,” Mr Gubb said.

December figures from the Real Estate Institute of New Zealand show the year-on-year residential median sales value for dwellings in Queenstown Lakes District and surrounds rose 8.2 percent – up from $970,000 in December 2019, to $1.050 million in December 2020.

Meanwhile, as a reflection of confidence in the Queenstown Lakes District residential property market, the number of properties sold in December year-on-year increased sharply – up into three-figures from 85 in December 2019 to 117 in same month last year, showing that rising sales values were not being solely driven by a shortage of stock for buyers to choose from.

The average days to sell a home in the region in December last year tracked at 27 – four lower than the 10-year average for the month. The REINZ data notes that on current trends, there is eight weeks of inventory available for buyers in the wider Otago province – some nine weeks less than at the same time in December 2019 – reflecting the high volume of transactions that have been taking place in pockets such as Queenstown.

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