Expected to expand faster than Auckland over the next 18 years, the Queenstown Lakes district is experiencing a few growing pains, particularly when it comes to property. Shane Gilchrist reports.
You can't see Suffolk St from the main drag of Arrowtown. Yet peer into the window of a real estate agency past which tourists and locals glide, scan the ads and you'll find some clues as to why that particular stretch of road near the middle of the town is prompting so much debate.
Take a stroll several hundred metres south of Arrowtown's retail nucleus and you'll find the property in question: 11-21 Suffolk St. Late last month, the Queenstown Lakes District Council voted to transfer the land to the Queenstown Lakes Community Housing Trust. The following day, the Government announced a $1 million grant towards a $3.6 million, 10-house development.
Home to an assortment of cabins, the land borders Jack Reid Park where, on the edge of a puggy rugby field, the Arrowtown Rugby Club's scoreboard features an advertiser's sign that reads: ''We make sure your mortgage hits the spot.''
In this part of the country, it needs to.
According to Real Estate Institute of New Zealand data, the median house price in the Queenstown area is $517,500, compared with $500,000 a year ago. However, as real estate agent Richard Newman, principal of Ray White Arrowtown, noted:
''The average selling price now is about $600,000 for a house in Arrowtown.''
''At present there would only be about seven or eight residential sections for sale in Arrowtown, starting at the $400k-plus mark and going up to $700k-$800k. That means if you want to build a new house, it could be more than $1 million.''
Which brings us back to Suffolk St.
Of the 263 submissions received on the proposal, roughly two-thirds opposed the QLDC's gifting the land to the housing trust, which will now build 10 rental units, including two for elderly residents, on the site.
Some claimed the idea was economically flawed, that the QLDC should not have provided such valuable, centrally located land to the housing trust (some estimated the land would be worth more than $2 million if put to public tender). Many others expressed concern about the future of the Arrowtown Rugby Club's headquarters nearby or the scheme's implications for any future community sports facility. A few expressed concerns such a development might attract ''undesirable'' tenants.
So for most of those opposed, the problem was the Suffolk St site, not affordable housing. In fact, many opponents (and, obviously, supporters) acknowledged the need for such initiatives.
As Mr Newman noted: ''To get the record straight, I'm not against affordable housing. I just think it [the Suffolk St development] is in the wrong place. Arrowtown isn't against affordable housing. The argument has more to do with the site.''
The Arrowtown Promotion and Business Association got to the heart of the matter when it recently stated: ''We now face the peculiar difficulty of trying to protect the integrity of a historic village where managing growth pressure creates genuine issues in the property market.''
In short, growing pains are inevitable in the Queenstown Lakes district, which is expected to grow faster than Auckland over the next 18 years.
Statistics New Zealand projections released late last year showed the district, which includes Queenstown and Wanaka, shares the highest growth rate in New Zealand of 2.2% a year with Canterbury's Selwyn district (compared with Auckland's 1.5%).
Such an increase would add more than 17,400 people to the Queenstown area by 2031. And more people means more pressure on housing.
Add to the mix news the Reserve Bank is likely to move soon to reduce the amount of high loan-to-value (LVR) borrowing, making it harder to secure a mortgage with a deposit of less than 20%. David Cole, chairman of the Queenstown Lakes Community Housing Trust, says the region's housing issues are symptomatic of wider trends.
''Throughout New Zealand, that has been the problem in the past 10 or 15 years. We used to build around 23,000 new houses a year, but in the last five to 10 years we've been building around 13,000-14,000.
''In 2015 we will face a supply-demand problem in New Zealand and we all know what happens when demand outweighs supply,'' Mr Cole said.
''Here in Queenstown, I think we need to look at those projections and develop a housing plan that ensures there will be adequate new land available and therefore adequate opportunities for both the private sector and organisations like ours to build new houses to meet the demand.
''We need to make sure there is a fresh supply of new houses coming to the market to meet that anticipated demand of population growth.''
One Arrowtown resident, who asked not to be identified in this article, believes she would have been forced to move elsewhere had her family not benefited from the housing trust's shared ownership scheme.
''We worked out - and this is just going through the basics - that an average rent in Arrowtown starts at around $500 for a standard three-bedroomed house. Anything less than that and it's gone within an hour.
''We added up the basics - rent, utilities, food, childcare and petrol - and reckon an average family can spend between $800-$1000 just getting by each week. That's a lot of money.
''For most people, there's nothing left. And if your children do activities such as swim lessons, well, most of those work out to be about $100 a term. There are all those extras on top, too.
''A lot of people would love to accrue money to put towards property, but the rents are so high. There are people who you want to retain in the area, such as teachers, but they can't afford it.''
Another woman, who lives at Lake Hayes Estate, points out that despite her subdivision being regarded as more affordable within the Queenstown Lakes area, sections there are still fetching more than $200,000.
''We moved there eight years ago and built a 200sq m house. When we were building I worked two jobs, including as a kindergarten teacher. My husband is a `tradie','' the mother-of two explained.
''We did it ourselves. I painted it and put in the insulation. Back then, we bought a 780sq m section for $120,000. At the time it was quite a big deal, but sections have just about doubled in price since.''
Ben Espie, chairman of the Lake Hayes Estate Community Association, says that though there are a lot of young families in the subdivision, the ''entry price'' is still pretty high.
''People would be hard-pushed to find a house under $450,000-$500,000 in the subdivision. By nationwide standards, it's still not a cheap area,'' said Mr Espie, who bought a house at Lake Hayes Estate for ''around $600,000'' three years ago.
''There are a few retired farmers in the suburb, but the large proportion would be couples in their 30s with young families. There are working couples, people with professional jobs, those working in the trades who can stump up for a mortgage of a fairly sizeable chunk.''
On a midweek, midwinter's day, as a burst pipe allows water to pool in the lime-green confines of the men's toilet block at the Arrowtown Rugby Club's headquarters at Jack Reid Park, a newspaper lies unopened on the Suffolk St kerb. Peel back the shrink-wrap and inside is an article that holds a glimmer of hope for those looking for a foothold on the property ladder in these parts.
The Environment Court has announced it will soon begin deliberations on an appeal lodged by Arrowtown South, the name given to 31ha spread across nine titles and bounded by Arrowtown to the north, the Arrowtown golf course to the south, Centennial Ave to the east and McDonnell Rd to the west.
Otherwise known as plan change 39 - not to be confused with plan change 29, which has to do with Arrowtown's urban boundaries - Arrowtown South proposes 19 urban-residential allotments and 23 rural-residential allotments, including one existing dwelling.
This is significantly fewer than the 226 dwellings controversially proposed for Arrowtown South in September 2009, an application declined by the Queenstown Lakes District Council in late 2010. Judge Jon Jackson decided the rural-residential or rural-lifestyle use for Arrowtown South now sought by the amended plan change was within the range of possible outcomes and scheduled proceedings to begin on August 30.
Last week also brought news of progress a dozen or so kilometres from Arrowtown, at the $300 million Shotover Country residential development, which lies between the Shotover River and Lake Hayes Estate. The project manager announced construction of the first houses was expected after the first issue of titles for stage one in early September. Comprising more than 700 sections, most of which range in price from $175,000 to $205,000, the Shotover Country project will ultimately include about 40 house-and-land packages that will be developed by the Community Housing Trust.
''We worked with the developers for quite some time, even prior to them lodging their consent application,'' Mr Cole explained.
''It's been a positive relationship.
''By doing more comprehensive developments, we can work with smaller section sizes and more standard designs. They can be more concentrated but still provide private amenity space.
''Increasingly, we are seeing the need for a housing plan for the community, so that we don't just lurch from one new development consent to the next. I think that would give confidence to the council, the housing trust and to private developers.
''If we are going to have a good outcome by 2031, it's not going to just be because the housing trust put together some nice programmes.''
Queenstown Lakes District Mayor Vanessa van Uden says that while managing access to residential land is important, the process of freeing up such land is a balancing act.
''We are trying to encourage developers to help with the problem. That might involve entering into a stakeholder arrangement with the council and the trust, in terms of land or money. Or they can do it within their own development - to make sure there is a mixture of housing available.
''We could fix the issues surrounding the price of land by saying yes to all development, but that is not the right outcome,'' she said. ''We don't want random development going on. We need to work smarter. You do need that diversity in the community; you need a place where people can live and work and bring up their families. But I think most people who live here don't want to see one big city within the Wakatipu basin.
''There is a lot of land zoned already that has the capacity to absorb growth. Some of it just hasn't been brought to the market yet ... there is Shotover Country, Remarkables Park and parcels of land at Kelvin Heights. And there is in-fill within towns as well.''
The Shotover Country project includes plans for a $14 million state primary (years 1-8) school, which is expected to have a roll of about 650. Work on the school is expected to begin in the estate early next year.
Nearby, at Lake Hayes Estate, where the housing trust completed the last of its 27 houses late last month, there are other signs of young life. On the edge of the road, near a tight corner into the township, rests a child's shoe (size 4) emblazoned with a street scene on which two words are repeatedly scattered: ''Stop'' and ''go'', ''stop'' and ''go'' ... Below, in the heart of the estate, a couple of concrete trucks are doing just that.
