Queenstown’s real estate industry is letting out a collective sigh of relief.
February’s sales volumes are back up to last year’s monthly levels. The resurgence comes after a dire January.
The Wakatipu’s 100-plus agents notched up just 35 combined dwelling and section sales in January. That was the lowest amount of deals done since December 2000.
“January was a relatively concerning result,” local Real Estate Institute spokesman Adrian Snow says.
“That was the lowest point through the whole recessionary period.”
Common consensus was that buyers were spooked by the Government announcing that it’s considering property tax changes in May’s Budget.
Despite that, Snow noted more new properties were coming to market possibly than at any stage since the recession hit in December 2007. Presumably some of that new stock started to be shifted last month.
Compared to the sluggish January, February figures rose 53 per cent to 52 sales, comprising 39 houses, six apartments and seven sections.
And the value of properties sold rose 77 per cent, from $17,706,000 to $31,368,000.
“Real estate agents are very pleased to see these results as this number of sales indicates that the basic confidence level of purchasers may not have altered significantly from the period of recovery experienced through 2009,” Snow reports.
The median dwelling price was down slightly, from $531,250 to $519,500, though month-to-month changes don’t mean much, Snow suggests.
“However real estate agents are experiencing a high degree of sensitivity with respect to property pricing.
“Purchasers continue to ignore over-priced properties and the purchasers are very responsive when they perceive a property to be correctly priced in the marketplace.”
In other words, it’s still a buyer’s market.
Three February sales were $1 million-plus including an apartment fetching $2.3m.
That sale bumped January’s median apartment price of $407,500 up to $741,250.
Ten of February’s sales took place in Arrowtown.
In his analysis of last month’s figures, Locations Realty director Greg Ross notes a quarter of all sales were achieved by auction. That includes four of the six apartments being put away under the hammer.
Ross calls this spike “a new high”.
That’s in line with real estate industry comment last year that auctions were becoming popular in an unsettled property scene.
Managed apartments have been a challenging sector, with values plummeting, but Ross points out there’s been 102 unconditional unit sales since January last year, an average of seven per month.
Apartment buyers should adopt a “medium-term hold strategy”, Ross advises.
Increased trans-Tasman flights, next year’s Rugby World Cup and “flat-out” marketing efforts by management companies mean apartment occupancies and yields are bound to increase, he says.