Queenstown real estate experts believe plans for a capital gains-style tax on quick flick property speculators will have little impact on the local market.
The Queenstown spokesman for the Real Estate Institute of New Zealand, Kelvin Collins, said the vast majority of people buying residential property in the resort did so with the intention of living in it.
“The speculator is not active in our market at the moment,” Collins, also of Harcourts Queenstown real estate agents, says.
“The driver here is permanent residents, and that’s because of the employment opportunities here.
“The people buying are buying for long term occupation – Shotover Country [subdivision] is active, Frankton’s active.
“So it’ll have very limited impact I would think.”
Prices are high in the resort and getting higher – the median price in April was $670,000, up more than 20 per cent compared with the corresponding month last year.
“You’ve had huge capital growth in Auckland, so speculators can buy apartments off plan and flick them on quickly for a profit,” Collins says.
“Our market has been quite stable until the last year. But there’s a chance we would have had speculators in this market in the next 18 months. It was getting ripe for it.”
There was $60 million worth of property sales in Queenstown last month, the highest level since January 2006, with a total of 65 sales.
That included 10 sales over $1m, including a three apartment building which sold for $7m.
A quarter of sales were in the $800,000 to $900,000 bracket and there continued to be a real shortage of property to sell under $500,000, with agents fielding multiple offers on houses at this end of the market, Collins says.
The measures could affect the rental market, he says.
“There’s strong rental demand here at the moment as Queenstown has quite a transient population.
“A market like this still needs investors to own rental properties. If you get rid of the investors, who is going to build? You end up with no rental properties.”
Stacy Coburn, of real estate agents BayleysLocations Queenstown, says buyers faced difficulties in Queenstown because of a lack of properties built in the wake of the global financial crisis.
“It’s a supply issue down here,” Coburn says.
“We need more stock and obviously that’s going to throw increased value on existing property, which we’re seeing in Arrowtown particularly.”
The measures could have a limited effect on special housing accord (SHA) developments, he says.
BayleyLocations Queenstown is marketing Bridesdale Farm, a fast tracked subdivision next to Lake Hayes Estate.
Thirteen other SHAs are in the pipeline from other developers.
“It was quite a mix of buyers and the speculator sector was relatively small,” Coburn says.
“Most were looking to buy to live, or as a rental investment. We didn’t see a lot looking to sell within two years. Some will do it but with most it’s more a five year investment plan.
“Overall, it’ll change some plans but won’t have a huge impact versus areas such as Auckland and Christchurch.”