Queenstown Lakes has stacked more than $15 billion on to its value since the turn of the millennium in an unprecedented property gold rush.
Latest figures on the overall capital value of rateable land and buildings show they are worth $18,759,741,000 as of last month.
That’s up from just under $3.6b in July 2001, an increase of more than 420 per cent.
It means the Wakatipu is on its way to becoming the richest chunk of South Island real estate south of Christchurch.
The rise of the subdivisions – such as Jack’s Point, Lake Hayes Estate, and Peninsula Bay in Wanaka - is a major factor in the valuation boom, Colliers International’s Queenstown property expert and valuer John Scobie says.
Impressive new commercial buildings in downtown Queenstown, buy-to-let apartments, and the growth of Frankton’s Remarkables Park have also contributed.
And the 2015 figure doesn’t even take into account the ballooning market values this year or the commercial projects about to come to fruition - for example, Frankton Flats.
Queenstown’s council updates its rates values annually but they are based on Quotable Value New Zealand’s figures - set every three years.
The latest QV figure for the district was set in July 2014.
Scobie says there are two main reasons for the $1b-a-year increase - increases in the number of properties and the values of sections.
For example, sections at Lake Hayes Estate were selling for about $90,000 in 2003 - just over two years later prices increased to $200,000, “so, a massive gain”, he says.
Value then increases again once properties are built.
CBD projects replacing lower value buildings have also added value.
Property markets in the district are now in well-established growth and expansion phases, following a period of
post-Global Financial Crisis recovery, Colliers’ 2015 market review and outlook says.
The GFC saw the total value revised down on the QV three-yearly update from $17.6b in 2011 to $16.3b in 2012.
But now, driven by population growth, tourism numbers and the ongoing housing shortage, the growth and expansion phase is expected to continue for at least two to three years.
Dunedin practically flatlined from 2008 to 2013, with a total value of around $18.8b, before putting on $2b to
its current value of $19.6b.
It was worth $7.3b in 2002 (figures for 2001 were unavailable).
Invercargill, meanwhile, has an overall capital value of just $6.8b at 2015.
QV assesses different districts in different years, leading to uneven hikes or decreases in values for Queenstown
and Dunedin every three years.
Queenstown mayor Vanessa van Uden says while rapidly rising values aren’t always a bad problem to have, it
could impact negatively on the community, particularly in terms of housing affordability - for buyers and
Wages and salaries aren’t necessarily reflective of the increased value, yet prices are continuing to rise.
Van Uden says it’s inevitable the community will have to “accept some compromise” in terms of freeing up land
for more affordable housing.
“As a property owner, already on the ladder, individually you like it when your investment goes up.
“If you take a bigger look … in terms of the increasing amount to just get on to the property ladder, or find
somewhere to rent, it’s not that great.
“[Increased value] is a great thing, but we just have to watch out that we don’t cut out a whole part of our community because that will make us poorer, actually.”
Last week the council approved its draft district plan introducing new mechanisms to help the shortage.