Queenstown Residential Real Estate Sales for October 2013 – Back On Track?

Date: 20th November 2013 by Tim Medland

Residential sales in Queenstown saw a return to optimism compared to the dip in transactions that was largely reported on for the past 2 months. With 51 sales in October 2013 compared with 45 in October 3013, it is fair to say the trend for a more buoyant year than 2012 is likely to be confirmed in the next 2 months, as November and December traditionally record an increase in activity. There have been concerns in August and September that the new Reserve Bank Rules affecting LVR deposit may have had the immediate effect of keeping some buyers out of the market, but the return to the year’s positive trend this month confirms that it was premature to read too much into the results of the past 2 months.

Another interesting comparison is between median sale values, also on the rise at $575,000 in October 2013 compared to $517,000 in October 2012. This would defeat the argument that, as underlined in August September, a new tendency could emerge with buyers reducing risk by limiting their purchase to the “under $550,000” bracket. Clearly, with 50% of dwellings last month fetching above $650,000, sellers can be reassured that activity is once again buoyant in all sectors of the market.

Added to the positives is the lift in apartment sales with values often ranging between $425,000 and $550,000 . This could be an indication that new LVR rules have prompted buyers to consider apartments as a valid option, or simply that high quality new stock, although limited, has become available at these prices.

Townhouses and units have shown a similar trend in purchase values with 70% of the sales last month fetching under $500,000. First home buyers are often the main purchasers in this sector, with 12 to 14 monthly transactions being sustained throughout the year.

October 12 was again ahead of the 5 and 10 year averages, respectively at 41 and 49 sales, and the return to positives is confirmed by the number of days to sell in October 2013, at 48 this year against 55 October 2012.
The 12 month sales period ending October 2013 has seen 610 sales compared to 544 for the 12 months to October 2012 and 462 the previous year. This is consistent with the expected growth cycle following the GFC. Of course it will be interesting to see how far up this upward cycle takes property values.

To be added to these numbers are section sales: in the 10 months to October 2013, sale volumes for bare land have seen a 22% increase. This is despite the already high cost of building being set to increase further in New Zealand under the pressure of demand as well as housing shortage, led by the 2 main centres, Auckland and Christchurch.

As you can see, the numbers in October show a picture of steady increase in activity right across the board, in all parts of the residential market. It can be reassuring to see little sign of a real bubble in any sector of housing, especially in Queenstown as we are not subject to the same pressures as New Zealand’s 2 biggest cities.

Posted in: Statistics