Wakatipu realtors put through nearly 20 per cent fewer residential property deals in the first half of 2010 than they did during the same period last year.
Releasing the figures, local Real Estate Institute of New Zealand spokesperson Adrian Snow says the industry is somewhat surprised.
“I think anecdotally that the agents would have probably thought this year was the same as last year.”
Especially because buyer enquiries are about the same as for the first half of 2009, Snow adds.
Ironically, the REINZ frontman fingers Queenstown MP – and Finance Minister – Bill English for the fall-off.
“Residential investment properties have really slowed down dramatically, almost to a standstill – it appears to be the same up and down the country,” Snow says.
The Budget’s to blame, he says.
“I think the Budget effect has been much more significant than anyone had been expecting.
“It really happened as soon as English started announcing his [investment property] intentions back in December.”
Snow cites REINZ president Peter McDonald’s recent statement that residential properties have to yield five to six per cent to find buyers – compared with three to four per cent over the past few years.
“There’s a big shift [needed] in rental yield and it’s either got to come from rent increases or from the value of the property coming down,” Snow adds.
Yet tenant demand remains strong in Queenstown, he says.
“At the moment, there’s very little vacancy for residential tenancy properties.”
Tenants could pick and choose last ski season – but not this winter.
“In future years, we run the risk of having a shortage [of residential rental properties],” Snow believes.
Despite one-in-five fewer residential properties changing hands, real estate folk always see sunlight peeking through black clouds – and Snow is true to form.
First, it’s thank God for the Aussies, he says.
“Australians are featuring very strongly in our buyer makeup.
“They’re obviously feeling quite confident with their economy, they’re looking to invest in property, whether for holiday use or residential investment.
“They perceive our rental yields to be better than they are in Australia.”
But British and United States buyers are notably absent, Snow says.
The other bright spot is bare land – eight sections sold in June.
Section sales are creeping up again because home sites are now coming to the market at prices local residential purchasers are prepared to pay, Snow says.
“It does boil down to prices at the end of the day.”
Recent section buyers are people who intend to build soon, rather than speculators or land bankers, Snow says.
“And that’s really important for Queenstown [because] it tells us we can expect to see a lift in building activity in the next 12 months.”