Queenstown property market

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Jeeves

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#205893 1-Dec-2016 14:20

So news coming out today that Queenstown property values are at the $1m mark.

Does anyone else feel that this area is at risk of a much larger correction should a catalyst like a recession come along, vs Auckland?

Auckland has real demand - in that people want to live here and work here, and there isn't enough current supply to keep up.

Queenstown - not so much.

The last census, had Queenstown-Lakes population at 28,000 , with 16,000 dwellings. So 1.75 people per dwelling.

Auckland has (at last census) 1.415m people and 509k dwellings, for a ratio of 2.7 people per dwelling.

So Auckland has real demand. Queenstown, has either purely speculative demand from overseas investors, or Aucklander's cashing up their capital gains and buying holiday houses/retirement homes.

This to me, indicates that Queenstown could be in for a lot of hurt come correction time, compare to Auckland where the demand will always remain until supply can catch up. Especially considering the job market in Queenstown is primarily low paid hospitality and admin workers who could never afford a $1m house.

Anyone else agree with my thinking?

UHD

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#1680722 1-Dec-2016 14:37

I corrective recession is always possible but Queenstown really is a playground for the rich so I doubt there is much risk.

benokobi

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#1680729 1-Dec-2016 14:42

Queenstown's a complicated place. I don't think there will be a large drop in prices with a recession. The quality of the 1 mil houses is superior to one you'd get in Auckland. But these numbers are skewed a fair bit. Theres almost three separate markets, temporary workers, regular workers and the holiday houses. Someone permanently working in Queenstown can probably get a brand new house for 600k but the rest of the holiday houses sold go for upwards of 2 million easy with 8 digit houses becoming common bringing up all the averages.

All my family have had holiday houses in the area since the 80s and before 08 its been a pretty steady increase in house values. Queenstown and Arrowtown are are just so good holiday locations the millions in Capital gains are just a bonus.

Geektastic

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#1680730 1-Dec-2016 14:44

As long as the wealthy like it, it'll be desirable. It has a private jet terminal for a start.

I heard from an agent that Zuckerberg bought there and took less than 30 minutes to spend several million.

benokobi

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#1680732 1-Dec-2016 14:48

Geektastic:

As long as the wealthy like it, it'll be desirable. It has a private jet terminal for a start.

I heard from an agent that Zuckerberg bought there and took less than 30 minutes to spend several million.

Peter Thiel also brought a mid range house for 5 million in 2011

Geektastic

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#1680736 1-Dec-2016 14:59

I am on several agent's mailing lists for Queenstown as we intended moving there when we put our house on the market but I doubt we could afford it now as unfortunately South Wairarapa has not moved at even a tenth of the speed...

In 12 months, according to the last agent's briefing a week or so ago, his median sales had gone from $650,000 to $980,000.

benokobi

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#1680739 1-Dec-2016 15:04

Geektastic:

I am on several agent's mailing lists for Queenstown as we intended moving there when we put our house on the market but I doubt we could afford it now as unfortunately South Wairarapa has not moved at even a tenth of the speed...

In 12 months, according to the last agent's briefing a week or so ago, his median sales had gone from $650,000 to $980,000.

Yeah it's gone insane recently. A Shack next to our house in Arrowtown sold for 1.4. Has a bit of land but hardly worth it. Arrowtowns almost another place. Queenstown gets all the people running away from Auckland and overseas, then Arrowtown gets the people from Queenstown looking for somewhere quieter.

wellygary

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#1680751 1-Dec-2016 15:24

Queenstown's issues are worse that Auckland, it is seriously short of houses, and it is showing up the much much higher rentals...

also there is a big auckland flow over, with 8-10 direct flights a day between Auckland and Queenstown.

Census figures from 2013 are not a very good read on what is going on, ( esp as March is probably the quietest time of the year)

Just wandering around the streets will quickly show up the accomadation problem, there are cars parked everywhere as former one or two car "3 bedroom family homes" become 3 couple rental properties, with 4-6 cars between them.....

Also a big chunk of homes are "book a bach" and I suspect AirBnB is pretty big down there too,

There is also the "big money" resort disease, where people simply buy a house to use 2-3 weeks a year and leave it vacant the rest of the time, simply because they can.... wander around places like Whistler and and Aspen and you will find most houses are Empty for most of the year....

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mattwnz

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#1680753 1-Dec-2016 15:29

Luckily Queenstown is quite small, so I don't think a correction will have a big impact. Also a lot of Queenstown is owned by overseas owners. I read in the media it is at least 10%, based on the rates demands going to overseas addresses, but it could be higher.

Fred99

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#1680942 1-Dec-2016 22:03

Queenstown faces a risk from downturn in tourism, which may or may not be related to other (probably global) events which would cause a more general correction. Of course that's never going to happen LOL.

Tourism has a few problems and risks, the market can be fickle, and as people involved in hospitality know, wages suck badly and accommodation/living costs in tourist traps like Queenstown are high.

Fred99

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#1687039 13-Dec-2016 12:25

http://thespinoff.co.nz/society/12-12-2016/you-think-aucklands-housing-crisis-is-bad-the-queenstown-car-crash-will-be-worse/

The truth is that there’s real train-wreck of a crisis developing in Queenstown. Queenstown is now more expensive to live in than Auckland: wages are lower and houses about the same price, so the ratio of income to house prices is nudging an eye-watering 12 – 14, compared to the 9 – 11 ratio that has the IMF saying Auckland is breaking world records in terms of housing affordability.

Geektastic

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#1687044 13-Dec-2016 12:38

I think it is an error to see QT as a place to live like, say, Porirua.

It isn't that anymore. It's a playground for tourists and the wealthy, like Vail in Colorado. It's the Koinoor Diamond of NZ's tourism crown. It brings in billions.

It has no 'housing crisis' because it no longer has 'being somewhere to live for ordinary people' as a raison d'être and taken in that context, it's problems are a lack of expensive houses, expensive restaurants, expensive spas, cable cars up mountains, decent hotels and motels and so on, not a lack of cheap houses!

frankv

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#1687049 13-Dec-2016 12:49

Geektastic:

I think it is an error to see QT as a place to live like, say, Porirua.

It isn't that anymore. It's a playground for tourists and the wealthy, like Vail in Colorado. It's the Koinoor Diamond of NZ's tourism crown. It brings in billions.

It has no 'housing crisis' because it no longer has 'being somewhere to live for ordinary people' as a raison d'être and taken in that context, it's problems are a lack of expensive houses, expensive restaurants, expensive spas, cable cars up mountains, decent hotels and motels and so on, not a lack of cheap houses!

Regretfully, the tourists and wealthy don't want to be cable car operators or waiters or barmen or hotel cleaners. So there is also a need for 'ordinary people, and for cheap housing. This same problem applies to any resort town, whether QT or Vail or Aspen or Grindelwald.

Geektastic

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#1687087 13-Dec-2016 13:55

frankv:

Geektastic:

I think it is an error to see QT as a place to live like, say, Porirua.

It isn't that anymore. It's a playground for tourists and the wealthy, like Vail in Colorado. It's the Koinoor Diamond of NZ's tourism crown. It brings in billions.

It has no 'housing crisis' because it no longer has 'being somewhere to live for ordinary people' as a raison d'être and taken in that context, it's problems are a lack of expensive houses, expensive restaurants, expensive spas, cable cars up mountains, decent hotels and motels and so on, not a lack of cheap houses!

Regretfully, the tourists and wealthy don't want to be cable car operators or waiters or barmen or hotel cleaners. So there is also a need for 'ordinary people, and for cheap housing. This same problem applies to any resort town, whether QT or Vail or Aspen or Grindelwald.

Quite; welcome to Kingston, Glenorchy, Alexandra, Cromwell etc! Watch out for the black ice when you drive to work in the mornings.

wellygary

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#1687109 13-Dec-2016 14:32

Geektastic:

frankv:

Regretfully, the tourists and wealthy don't want to be cable car operators or waiters or barmen or hotel cleaners. So there is also a need for 'ordinary people, and for cheap housing. This same problem applies to any resort town, whether QT or Vail or Aspen or Grindelwald.

Quite; welcome to Kingston, Glenorchy, Alexandra, Cromwell etc! Watch out for the black ice when you drive to work in the mornings.

Doesn't work, suprisinfgly all those young service workers want to actually live in the resort, not miles away in rural otago

http://www.stuff.co.nz/travel/news/85077808/Queenstown-NZSki-workers-did-not-want-to-live-60km-away-in-Cromwell

Queenstown's core needs to go up, (4-5 stories) and fast,

Developments like the following are desperately needed,

https://www.odt.co.nz/regions/queenstown/30m-housing-complex-plan-welcomed

The Council sitting on its hands over its motor camp redevelopment is also hurting big time....., its a huge chunk of land a stones throw from town and its growing grass with 1950s holiday bachs on it.....

benokobi

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#1694001 22-Dec-2016 19:56

The traffic in Queenstown makes it a place to avoid. Especially near the airport its absolutely nuts. A mini Auckland.