A Queenstown realtor’s picking good growth for the residential property market this year.
Real Estate Institute of New Zealand Queenstown spokesman Kelvin Collins says the tourism and construction boom is a boon for the entire market – but the greatest pressure will be on the family housing market.
“There’s strong demand in the $500,000 to $700,000 price bracket from permanent residents due to employment growth within the tourist and construction industry.”
There’s less than four months’ supply of properties for sale in this price bracket which is favouring sellers, he says.
The fact families can find very little rental accommodation is also fuelling growth in this sector.
“It scares me that we don’t have enough residential subdivision coming online,” Collins says.
He’s encouraged that ‘special housing areas’ will be fast-tracked under a new accord between the Government and the local council.
The newly-announced150-section Bridesdale Farm subdivision at Lake Hayes has been conditionally approved.
“That’s going to satisfy some of that demand, but we probably need at least 300 new houses a year to cater for local growth”
Towards the end of this year, if Bridesdale Farm and other subdivisions take off, “it could become more of a balanced market, so prices could actually soften a little bit”.
“But I would foresee in the next six months they’re still going to firm.” Collins says there’ll continue to be good demand for sections under $300,000 to cater for families.
“We’re probably at a level where people can buy a section and build and maybe even make a buck out of it [if they sell]”
REINZ figures show Wakatipu sections sales rose from 158 in 2013 to 192 last year – and that’s not counting developer-sold sections at Shotover Country.
Conversely, dwelling sales dropped from 597 in 2013 to 563 last year.
Collins also predicts increased demand from investors towards the end of this year due to strong rental demand.
He also suggests demand for holiday homes will rise as consumer confidence improves throughout the country.
One sector still favouring buyers is properties over $1 million, Collins says.
“There’s three years’ supply for sale in this sector although some sellers don’t have a strong motivation to sell.
“Interestingly, there are more properties for sale over $1.5m than under $500,000.”
Overall, Collins says there’s a good feel to the market.
“There’d be very few things that if you bought today you’re not going to sell in three years’ time and make good growth out of it.”