Queenstown average house price drops trends hitting new high of nearly $1.7m

The average property value in Queenstown hit a new high of nearly $1.7 million in August.

Debbie Jamieson / Stuff

The average property value in Queenstown hit a new high of nearly $1.7 million in August.

Queenstown home values ​​remain stubbornly high as they buck national trends and set a new record average valuation of nearly $1.7 million.

Quote Value (QV) figures for the three months to the end of August show the average property value of Queenstown homes is $1.69 million, an increase of 1.5% on to the previous period.

It was the only region in the country to show an increase, with national averages falling 5.5% to $973,848.

In some parts of the country, the decline has been greater – up to almost 17% from the peak.

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This four-bedroom in Queenstown's Lakes House Estate was sold in April 2021 for $1.1 million and resold in June 2022 for $1.35 million.

Debbie Jamieson / Stuff

This four-bedroom in Queenstown’s Lakes House Estate was sold in April 2021 for $1.1 million and resold in June 2022 for $1.35 million.

Over the past 12 months, the average home value in Queenstown has increased by 18.6%.

Heather Beard, valuation manager at Colliers in Queenstown, said the Queenstown property market has historically been slower to react to downturns.

The reopening of international borders, the restart of tourism and the increase in the number of people choosing to move to Queenstown and work remotely have supported the market.

The Colliers Market Review and Outlook 2022/23 report shows that the average family home is selling for around $200,000 more than a year earlier.

A four-bedroom home on an 804 sq m section at Lake House Estate that sold in April 2021 for $1.1 million brought in $1.35 million a year later, an annualized growth of 19, 2%.

Another example with a home and income property in suburban Shotover Country that sold in April 2021 for $1.26 million and resold in July 2022 for $1.455 million.

This home and income property in the Queenstown subdivision of Shotover Country was sold in April 2021 for $1.26 million and resold in July 2022 for $1.455 million.

Debbie Jamieson / Stuff

This home and income property in the Queenstown subdivision of Shotover Country was sold in April 2021 for $1.26 million and resold in July 2022 for $1.455 million.

However, the number of listings was dwindling as people waited to see where the market was going, Beard said.

“In Queenstown we saw some of that urgency leave the market and FOMO, or Fear Of Missing Out, was replaced by the new buzzword FOOP – Fear Of Over Paying.

“Nobody wants to buy at the peak of the market,” she said.

Interest rate hikes should lead to further market consolidation, she said.

“Any sharp increases in interest rates will aggravate the unaffordability of mortgages in the region, especially where high mortgage-to-income ratios are at stake.

“Owners who have bought recently and are highly leveraged are at risk of falling into negative equity,” she said.

Queenstown had one of the highest mortgage-to-income ratios in the country, she said.

Housing affordability has long been an issue and Beard said the gap between those with mortgage-free luxury homes and those with low incomes in Queenstown appeared to be widening.

The Queenstown Lakes Community Housing Trust has nearly 800 households on its waiting list.

First-time home buyers and builders were also likely to be hit by inflation and supply constraints in the construction industry, Beard said.

Good news for Queenstown included Queenstown Airport’s forecast of a steady rise in passenger numbers, from a drop of 1.1 million last year to 3.2 million passenger movements over the course of with the fiscal year ending in June 2032, she said.

Carol N. Valencia