Average House Price Reaches $1.7m

The value of Queenstown homes remains stubbornly high as it bucks nation trends and sets a new record average valuation of almost $1.7 million.

Quotable Value (QV) figures for the three months to the end of August show the average property value of Queenstown homes as $1.69 million, an increase of 1.5% on the previous period.

It was the only region in the country to show an increase, with national averages decreasing by 5.5% to $973,848.

In some parts of the country, the decline has been more significant – as much as almost 17% from the peak.

In the past 12 months the Queenstown average home value has increased by 18.6%.

Colliers’ Queenstown valuation director Heather Beard said the Queenstown property market was historically slower to react to downturns.The reopening of international borders, tourism restart and increased numbers of people opting to move to Queenstown and work remotely, were supporting the market.

The Colliers Market Review and Outlook 2022/23 report shows average family homes selling for about $200,000 more than a year earlier.

A four-bedroom home on a 804sqm section in Lake House Estate that sold in April 2021 for $1.1m fetched $1.35m a year later – annualised growth of 19.2%.

Another example with a home and income property in the suburb of Shotover Country that sold in April 2021 for $1.26m, and resold in July 2022 for $1.455m.

However, the number of listings was reducing as people were waiting to see where the market was going, Beard said.

“In Queenstown we’ve seen some of that urgency leave the market and the FOMO, or Fear Of Missing Out, has been replaced by the new buzzword FOOP – Fear Of Over Paying.

“No one wants to buy at market peak,” she said.

Interest rate hikes were likely to lead to the market further consolidating, she said.

“Any sharp increases in interest rates will compound the unaffordability of mortgages in the region, particularly where high mortgage to income ratios are in play.

“Those homeowners who have purchased recently and are highly leveraged are at risk of falling into negative equity,” she said.

Queenstown had some of the highest mortgage to income ratios in the country, she said.

Housing affordability has long been a problem and Beard said the gap between those who owned mortgage free luxury homes those on a lower income Queenstown appeared to be widening.

The Queenstown Lakes Community Housing Trust has nearly 800 households on its waiting list.

First home buyers and builders were also likely to be impacted by inflation and supply constraints in the construction industry, Beard said.

Good news for Queenstown included Queenstown Airport predictions of a steady increase in travellers from a dip of 1.1 million in the last year to 3.2 million passenger movements in the financial year ending June 2032, she said.

Published by Stuff: Debbie Jamieson

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