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Queenstown's Covid troubles have not had a lasting impact on property prices because of a lack of supply.
CoreLogic says this could be the primary reason Queenstown’s property market rebounded so quickly after its conspicuous drop last year.
However, the company’s market update this week urged a cautious outlook for Queenstown property, as the resort still grappled with a lack of international tourists.
The Queenstown area was the only major part of the country to see an obvious drop in property values after lockdown, and CoreLogic senior property economist Kelvin Davidson said in the most recent market update for the resort a "physical supply shortage" could be the strongest reason the market rebounded so quickly.
Despite high rates of new builds in Queenstown, the growth in the resort’s housing stock has not met demand of the past five years.
CoreLogic analysis published late last year showed Queenstown led the country with its housing shortfall over the 2015-20 period at 13%.
Since 2015, the shortfall in properties was estimated at 2900 dwellings.
And so, despite a 7% drop in property value in June, July and August last year, December’s average property value was up 0.3% from the year before to the reported $1.21million.
The rebound in values around Queenstown was centred on suburbs such as Arthurs Point, Fernhill and Kelvin Heights.
There had also been a pretty solid rebound in Wanaka, he said.
And multiple property owners, who continued to make up a lion’s share of buyers, could be behind the buoyant demand.
Mortgaged investors rose to 28% of all purchases for 2020 as a whole. And cash investors rose to 23% for the year, on a higher number of overall purchases, too.
The number of new listings over the past three to six months was "subdued".
"This lack of choice for buyers will have contributed to the rebound in property prices," Mr Davidson said.
Australians and overseas New Zealanders buying houses were recently tipped by local real estate agents as the driving force behind the reversal.
CoreLogic head of research Nick Goodall said there was definite evidence of purchases from property owners based elsewhere.
Purchases from Auckland investors had climbed steadily.
Of all sales in the fourth quarter of 2020, 10.5% went to Auckland investors.
This was an increase from 6.7% for the same period in 2019 and 8.9% in the third quarter in 2020, Mr Goodall said.