Average Quarterly House Value Falls

The first chink has shown in the Queenstown property market.

The latest figures from Quotable Value, which released its national property report this morning, show a drop in house prices in the Queenstown residential property market.

Home values in Queenstown have fallen by an average of 0.7% this quarter, which is less than the average rate of reduction nationally (-1.7%).

It is the first time the town’s quarterly rate of home value growth has fallen into negative territory since August 2020.

Until now, Queenstown has regularly been the only main urban centre to consistently post positive quarterly home value growth.

In October, November and December its rolling three-month average growth rate was 2.9%, 1% and 1.3% respectively.

Queenstown has been painted as the most unaffordable property market in New Zealand.

Economist Benje Patterson, of Arrowtown, said at the weekend there was no pathway in for first-home buyers in the district.

“If you bought five years ago, you’re fine. But you’d have to pass a war zone to get in now.

“It’s so crazy,” he said.

“Given that average household incomes are lower than Auckland, our houses cost hundreds of thousands of dollars more.

“It’s a real head-scratcher.”

Mr Patterson said that one of the issues was buyers came into the Queenstown-Lakes area from other centres in New Zealand and Australia.

Local buyers were competing with Auckland, which had 30 times the population, and, since borders reopened, buyers from Melbourne and Sydney, which had 100 times the population, he said.

Real estate agent Hamish Walker said open homes at affordable price points were seeing as many as 100 potential buyers through.

“We had one where a family had been trying to buy for six months. They had a budget of up to $900,000 [at the beginning]. Every 1% the interest rates go up, [a buyer’s] budget decreases from the bank by roughly 10%.

“Now the bank tells them they can only afford to borrow at $600,000.”

The family could not even find an affordable rental and had to remove their children from a Queenstown school and move out of town.

“Every problem in Queenstown usually filters back to housing,” he said.

Bayleys Queenstown agent Stacy Coburn said while the top end of the market was holding on price, the lower tiers were feeling the slowdown.

“The market has changed and it has got a lot tougher.

“If vendors are serious about selling currently, they have to realign their thinking with respect to values, especially in the mid-range residential sector,” he said.

One of the issues for buyers and renters has been homeowners turning long-term rentals into holiday lets through online providers.

An attempt by the Queenstown Lakes District Council to restrict providers failed early this month.

The council attempted to introduce a 28-day-a-year cap on short-term rentals in residential areas and 90 days in the town centre.

Otago Daily Times, 14/2/23

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