September 2013 Results For Queenstown Real Estate Sales – Is It A Trend?

Date: 29th October 2013 by Tim Medland

Queenstown real estate sales for September 2013 would tend to confirm a departure from the positive trend we observed until July this year, by showing lower residential sales at 39 compared to 42 in September last year. With 14 Section sales this brings the total to 53 residential property sales, on top of 51 for August 2013.  Of course it is still too early to interpret these numbers as a definite change in moods, but the highly mediatised New Reserve Bank LVR rules are tipped by real estate sources as being the main factor driving the market into a “holding pattern”.

We reported in previous months that the most active part of the market was first home buyers and investors often looking for properties just below or around the $500,000 mark. The drop in the number of sales suggests that buyers at “entry level” are indeed becoming more cautious or simply have to wait longer before entering the market due to the new LVR rules. Conversely this could play right into the hands of property investors who have sufficient equity to pay the required 20% deposit. Nationwide property sources also comment that this in turn could put upward pressure on rent prices, once again putting investors in a strong position.

In September 2013 the median sale price was $500,000 compared with $420,000 in August this year, and $575,750 in Septembers 2012. It has to be remembered that relatively small sale numbers in Queenstown also mean that median sale prices can be skewed by one big sale, as was the case this month with the top price of $2,450,000 paid for a lifestyle property in Dalefield.

Median sale price for sections at $230,000 for September 2013 reflects two components of this market: Firstly the availability of low price sections at Jack’s point, with 3 sections sold for $184,000 each, keeps land prices down. Secondly, buyers are compelled to buy existing dwellings as opposed to building new, once building costs per square meter are factored in.

Back to the big picture though: for 2013 we are still ahead for the past 6 months, with 298 sales compared to 282 sales for the same period last year and 240 in 2011. For the twelve months to Sept 2013 we are also ahead at 614 sales compared to 532 for the same period ending Sept 2012, and 461 sales for the previous year. Note that these numbers make our August and September dips look quite small at this stage.

The total value of Residential sales for 2013 reflects the dominance of purchases at the lower end of the scale with $277.7M compared to $279.9M last year, slightly down despite the increase in number of sales so far.

Among the positives, in the year ending August 2013 the number of guest nights increased by 8.9%, with domestic nights increasing by 7% to 938,546 and international nights up by 9.9% to 1,772,516 according to the latest Commercial Accommodation Monitor report (Statistics New Zealand) published in September. August alone reached 14.6% increase in guest nights, a boost partly due to the New Caledonian school holidays being shifted from September to August from now on.

Interesting to observe also that some building firms are already looking at creating a Chinese website to get ahead of the inevitable growth in investment from visitors originated in this new market, our fastest growing. In other words you are unlikely to see a long winded decline of real estate sales in Queenstown, as demand diversifies from visitors as well as stayers.

Posted in: Statistics