Average house in Queenstown-Lakes now costs $2m

House price growth in Queenstown-Lakes has accelerated in the last three months. PHOTO: GETTY IMAGES
The housing market in Queenstown-Lakes is outperforming the rest of the country, leaving Auckland and all the other major metros in its dust.

Figures from OneRoof’s data partner Valocity show the southern holiday destination recorded value growth of 4% quarter-on-quarter, and 6.3% year-on-year.

The average property value for the local authority has cracked $2 million and is $75,000 above its previous post-Covid peak.

In comparison, Auckland’s average property value is only $1.324m, with just a 0.2% quarter on quarter change.

A flurry of high-profile sales at the end of the year in Queenstown-Lakes on the back of strong buyer interest, both locally and from overseas, has cemented the area’s reputation as New Zealand’s most expensive housing market.

Valocity senior research analyst Wayne Shum said Queenstown-Lakes was blitzing everywhere else. He thinks people went down for the summer, loved it and have been buying and buying, with demand outpacing supply.

Aside from apartments there are not a lot of small houses and the average sale price reflects Queenstown and surrounds is largely a rich person’s market.

"It definitely is. The average property value is $2m now. It’s the first one to step over $2m."

Auckland has some suburbs with higher average values, such as pricey Herne Bay and Remuera, but those are suburbs, not districts, he said.

Some Queenstown-Lakes suburbs are showing average property values well over $2m.

Kelvin Heights is $2.8m, Lake Hayes is $2.574m and Arrowtown is $2.548m – although if you took out the multi-million dollar spends on properties at Millbrook, the nearby luxury golf and mountain retreat, Arrowtown’s average would fall, said Richard Newman, owner and manager of Bayleys Arrowtown, adding that the town’s average sale price is more like $1.85m.

"Millbrook is a microclimate of its own. A minimum sale in there is probably $4m or $5m."

Newman said Queenstown-Lakes was light on listings and had built-up buyer demand. One of his agent’s listings, a four-bedroom home at 7 Eastwood Lane, in Lower Shotover, highlights the price difference in the middle of the market: the property has an asking price of $3.1m, quite a step up for most Kiwi buyers.

Typical of Queenstown's mid-market: 7 Eastwood Lane, in Lower Shotover, is a four-bedroom, three...
Typical of Queenstown's mid-market: 7 Eastwood Lane, in Lower Shotover, is a four-bedroom, three-bathroom property with an asking price of $3.1m. Photo: Supplied
"When you’ve got the demand and you haven’t got the supply the prices go up, and that’s the problem in Queenstown and especially Arrowtown."

Arrowtown, like Queenstown, is seeing a lot of demand from Aucklanders looking for a nice house or a lock-and-leave property so they can commute back and forth to Auckland.

A lot of people do that now, changing the culture of Arrowtown from a small Alpine village to a more lock-and-leave executive residence town, Newman said.

"Families are being pushed out because it’s so dear and there’s nowhere to live."

Along with Aucklanders, there are a number of Australians from Brisbane, Sydney and Melbourne buying.

"We’ve 10 to 13 flights a day from Australia, it’s crazy."

There are also "locals" buying, by which he means people with big houses in the country who are coming to town where they can walk to the restaurants, cafes and bars rather than having to drive.

As demand for Queenstown and Arrowtown grows, people are pushed out further afield, so demand is strong in Wānaka, where the average property value is just over $2m, and also Cromwell which is more inland on Lake Dunstan.

"Cromwell has really taken off, especially for the domestic New Zealander, and the Auckland market go to Cromwell, too, because it’s a little bit cheaper."

Newman said the whole of central Otago was busy, adding there was a flow of people on the move from Auckland down, and with 10 or 11 flights a day to Auckland it was an easy enough commute for work.

Shum agreed there was spillover of demand into other areas which were seeing growth, such as Luggate, which is between Wānaka and Cromwell, and which saw a 5.6% average value increase over three months.

It’s a bit like people who want to buy in Auckland’s Herne Bay but can’t afford that so try in the next suburb of Westmere, and if there is nothing there go on to Pt Chevalier.

The same can be seen in the wealthy beach town of Omaha, north of Auckland, where the "Omaha shuffle" sees people buying closer and closer to the beach as and when property becomes available, said Shum.

In Queenstown-Lakes the movement is across the board.

"It’s not just one or two suburbs that’s driving the district – the whole district is doing quite well."

Mark Harris, general manager of New Zealand Sotheby’s International Realty, is based in Queenstown and he is not surprised at the numbers.

"Of all our offices throughout New Zealand, the Southern-Lakes region is considerably more consistent than the others at the moment," he said.

"I think it’s a combination of things, the main one being that the borders are well and truly open again so numbers are coming back so the town is as busy as it’s been for some time.

"It’s still not quite back to pre-pandemic tourist numbers but it certainly feels busy and buzzy which is great."

There is also renewed confidence in the market with the change of government and a flattening off of interest rates – plus, Queenstown just rocks, he said.

"At the end of the day the place hasn’t got any less desirable in the last three years."

Harris’ team tends to deal at the top of the market. His agents have closed some big deals in Queenstown-Lakes in the last 12 months, including $16m for an award-winning house on Buchanan Rise, in Treble Cone, Wānaka, and are currently selling a clutch of big estates that are likely to sell for top dollar. These include a luxury alpine lodge at 216 Remarkables Ski Field Access Road and a 21-hectare rural retreat at 76 Hunter Road, in Speargrass Flat.

Harris also said the prices were driven by Australians and Aucklanders: "The higher up you go in price the more likely it’s going to be from Australia or Auckland so that’s not changing."

An award-winning house on Buchanan Rise, Wānaka, sold last year for $16m, a record for the town....
An award-winning house on Buchanan Rise, Wānaka, sold last year for $16m, a record for the town. Photo: Supplied
There is still interest out of Singapore, as well, and despite the foreign buyer ban not changing there is interest out of America, too, with people waiting to see if there will be a rule change – and Harris said they were also waiting to see what happens with the US election and Donald Trump.

Luxury agent Ross Hawkins, from Ray White, said Queenstown-Lakes was soaring along with the high-end coastal and lifestyle market.

"I think a lot of that comes from the fact we’ve had a really good summer, weather-wise nice temperatures, warm water.

"I think after last year when we really didn’t have much of a summer at all, it’s sort of built that confidence, and people fall in love with the place when they are away on holiday."

Queenstown fits that pattern because it is a lifestyle, holiday destination.

Hawkins also sees a lot of high-end clients from Auckland who are baby boomers whose children have gone to university or to work who have decided to live in Queenstown.

They may have already had a holiday house there which they are upgrading to a permanent residence, or building new.

"That’s quite a trend. That’s the sort of thing that’s driving Omaha and the likes where the Omaha beach house is starting to become the permanent home more.

"It’s the same situation and it’s the same buyers to be honest. A lot of them are out of Auckland."

Some of the areas which are driving the value growth are premium lifestyle parts of the Wakatipu Basin where there is limited product.

"A lot of the areas have gone into more high density but the nice thing about those (premium) areas is it’s still rural lifestyle living and they are not letting certain areas get cut up too much and I think that will allow it to hold it’s value and increase its value."

When somewhere remains special, that draws people, Hawkins said.

"It happened in Aspen [a ski resort town in the Rocky Mountains in Colorado], too. It became the place where the rich and famous went and it just got more and more exclusive because it’s so special."

 - OneRoof