August Numbers Showing Different Trend For Queenstown Real Estate?

Date: 16th September 2013 by Tim Medland

August is traditionally a strong month for Queenstown Real Estate sales, thanks to large visitor numbers both from New Zealand and overseas heading for the slopes but also savoring the idea of ‘apres-ski’ in their own Queenstown dwelling. This year has seen a slightly different picture with only 51 sales compared to last year’s 69 sales for August. Sales included 42 dwellings and 9 sections.

Could this be regarded as going against the clear trend observed in both June and July 2013, with a sizable increase in sales compared to last year for the same months? July in particular was well ahead with 62 sales, a number not seen since 2006. Naturally this raises the question “what is behind this dip in numbers?”

Real estate sources warn against the temptation to give too much weight to a one month variation on what has so far been a very strong year for Queenstown Sales. However it has to be noted that the median price also dipped from $525,000 in July to $420,000 in August, “with the majority of sales being two and three-bedroom units under $400,000” as mentioned by Queenstown’s REINZ’s spokesman Kevin Collins, in a Mountain Scene article.

Kevin Collins also mentions that “It could be a reaction to the new Loan to Value Ratio rule, the shortage of quality well-priced property for sale or just winter.” Could this mean that we are observing a move towards better priced properties in a less bullish approach to ownership by first home buyers as well as investors?

If that is the case then this new trend will play right into the hands of developers who had the foresight of creating brand new dwellings with a unique design, a ‘feet in the lake’ location and at the right price, instantly combining benefits that are becoming essential to home buyers. This may be what is happening to the developers of “La Residence Du Lac” (www.laresidencedulac.co.nz) as they have reported strong sales for August, in particular following a large number of inquiries for their units under $400,000.

Clearly, a new generation for apartments and units needs to be available on the Queenstown market, that are agreeable to live in as well as suitable for a good return on investment. In the past, developers have largely treated Queenstown as a place to develop premium property, sold as a holiday home or an investment in highly priced zones. As always the market dictates what works and what doesn’t, so watch this space and beware that more affordable property – but still with good quality- might be the way to go.

Posted in: Statistics