Queenstown rebounds from Covid jitters
Property values in Queenstown were rattled by the Covid storm but new analysis by CoreLogic reveals those lockdown losses have been recouped.
While many of the country’s housing markets saw little to no impact in the wake of Covid, Queenstown’s market was one that did see a noticeable drop in values.
CoreLogic’s data shows that in May 2020 the average property value in the tourist town was $1.22 million. Over the next three months, Queenstown’s values fell by 7 per cent to bottom out at $1.13m in August.
But that decline has now been reversed, with the average value coming in at $1.21m in December.
According to CoreLogic’s analysis, that represents a rise of 0.3 per cent in values, compared to December 2019.
The latest Real Estate Institute (REINZ) data backed this up: It had median house prices in the Queenstown Lakes District up by 8.2 per cent year-on-year to $1,050,000 in December 2020.
That left CoreLogic senior property economist Kelvin Davidson wondering what might be behind the market’s upturn – given the ongoing economic impact of the absence of international tourists.
Davidson said one key reason is that despite high rates of new construction, growth in the stock of dwellings over the past five years has still been below housing demand.
‘‘Like many other parts of the country, Queenstown’s property market entered this Covid era with a low stock of properties available for sale, and the new listings flow over the past three to six months has remained subdued.’’
This shortage of housing supply, and resulting lack of choice for buyers, was probably the strongest reason why property values had started to rebound relatively quickly.
‘‘We also suspect that while some landlords might have felt the pinch, the actual demand to buy and own property in Queenstown may have not been too badly affected,’’ he said.
For Ray White Queenstown principal Bas Smith, it came as no surprise that the market was performing strongly, despite its tourism-based economy.
While there were a few shaky weeks at the start of lockdown, the market had recovered quickly with both buyers and sellers willing to trade from early on, he said.
‘‘This made for market confidence, which has continued to build and which is supported by the low interest rate environment.’’
But the enduring natural appeal of Queenstown, and the lifestyle it offers, seems to have played a part in the market’s recovery too.
Smith said the town had always attracted a lot of interest from out-oftown buyers, be they from other parts of New Zealand or from overseas.