Sales stall in Arrowtown with vendor pricing unrealistic, says realtors.
Realtors reckon unrealistic price expectations at the higher end of the market are stalling sales in once-booming Arrowtown.
The historic hamlet has in the past enjoyed a reputation of being the fastest-growing town in New Zealand.
But local real estate bosses say it hasn’t escaped the nationwide property slump – despite growing numbers of people wanting to move there from Queenstown to live.
“Traditionally February-April is our busiest time and we’d be looking at doing eight to 10 sales a month,” says Richard Newman, principal at the Arrowtown branch of Ray White.
“But it just hasn’t happened this year and in February and March we had about two sales per month.”
Newman adds: “We have a lot of vendors who are just not listening to the market and there’s a lot of overpriced stuff sitting around the $700,000-$900,000 mark that’s just going to sit there unless there’s a price adjustment.”
Harcourts reports Arrowtown sales last year were down about 40 per cent on 2007 – and 70 per cent of properties that did shift went for under $600,000.
But Arrowtown figures are still better than Queenstown, says this realtor, where the number of sales halved during the same period.
“We’re actually short of listings in the $550,000 and below band in Arrowtown, which is the range showing the strongest demand,” says Harcourts Wakatipu boss Kelvin Collins.
“It’s the houses in the $800,000-$1.2 million range where things are a bit slower and some of the properties are probably unrealistic, price-wise.
“If buyers see something advertised they feel is overpriced, they’ll just walk away.
“They don’t want to get emotionally involved and then find the vendor doesn’t want to sell at market levels.
“There’s a gap in the middle of where both the buyers and sellers are at the moment.”
Collins says this means buyers are wary of moving up the housing ladder, despite a “noticeable trend” of people now picking Arrowtown over Queenstown to live.
“Families and first-time buyers enjoy the community feel of Arrowtown and the schooling appeals to them,” he explains.
“But they don’t want to take on more debt to buy a better-quality house so inquiries tend to be for the lower end of the market.”
Newman believes if plans mooted by Queenstown Lakes District Council to extend Arrowtown residential boundaries don’t go ahead, this will put even more pressure on house prices.
“A lot of the community has come out and said they don’t want expansion,” he says.
“That’s all very well but it certainly will raise the prices long-term if the council doesn’t allow for future subdivisions.
“We’d become another Aspen, in America, which is expensive real estate.”
Yet despite the downturn, Newman is convinced buying in Arrowtown is still a solid long-term investment.
“If you’re coming to live here you can’t lose,” he says. “Stay here for five years and the market will pick up again.
That’s just the cycle we’re going through.”