The Future of Property in Queenstown
What's in store for our property market?
This is a question many Kiwis are asking, as New Zealand responds to COVID-19; especially in places like Queenstown, which was among the first of our regions to feel the effects of the virus when tourist numbers began declining at the start of 2020.
Tall Poppy has an experienced team in the Queenstown and Lakes District. We asked Keeley Anderson, based in Cromwell, for her thoughts on how her region is responding to the COVID-19 and its path to recovery.
Explaining the March Rush
Before New Zealand entered the Level 4 Lockdown, realestate.co.nz reported an 18.2% growth in property sales in Central Otago and the Lakes District. Keeley believes this was due to property owners wanting to get ahead of COVID-19 - many who owned rental and Airbnb properties and realised they needed to sell these sooner, rather than later.
In the first three weeks of March, we saw a lot of people put their property on the market to try and cushion the blow of the impact the virus is having on the district.
I expect we'll see a significant drop in April as the real estate industry is also on lockdown. Most of the sales we've seen in the first two weeks of the Level 4 alert were mostly completed ahead of the lockdown and just needed to go through the last few steps.
Keeley says while she's still receiving queries from potential buyers, the market is quieter, and she expects to see a shift in prices between Queenstown, Wanaka and Cromwell over the coming months.
Overall, I think we will see house prices between the three areas become more aligned - i.e. the median house prices in Queenstown and Wanaka may move closer to the median house price in Cromwell ($650,000). I also think we'll see people from Queenstown and Wanaka considering selling and buying in Cromwell to reduce some financial pressures while enabling them to stay in the area.
What About First Home Buyers?
Keeley believes there are two groups of first home buyers impacted:
- Buyers relying on Kiwisaver for their deposit, who are now facing a much longer road to buying their first home, and
- Buyers who have been quietly saving away and waiting for an event like this to open the door to their first home.
Keeley says she's worked with many people in the second group who would have built up a sizable deposit and will be able to buy now.
Buyers who have recently moved into their first property should be assessing their finances and talking to their bank if needed.
If they have enough equity in their homes, a financial plan in place and are taking full advantage of the low-interest rates on offer, they should be in a good position. Our banks are doing all they can to help homeowners, so if you are in a difficult situation (with employment etc.), make sure you talk to your bank about what is possible.
Opportunities for Growth?
Given the local economy's reliance on tourism, there's no doubt the Queenstown/Lakes District region is under incredible pressure - but from pressure comes innovation and Keeley Anderson says it's encouraging to see work underway to identify new markets.
I anticipate we'll see a complete shift in the way we work and do business - whether that's a decline in commercial rents (as people become used to working from home) or introducing new revenue streams to Queenstown, to help insulate the economy against events like this.
I also think the lockdown has enabled many businesses to realise the benefits of working remotely and going forward; I believe more people will want this flexibility. We could see more people considering a move to the Lakes if they can still work remotely - it could open the door for people from Auckland, Wellington and Christchurch who want to live in the area but doing so has been financially out of reach.
Are you looking for expert advice about your next move? You can contact Keeley Anderson or give our friendly team a call on 0800 82 55 76