Auction tests property market
A large Queenstown residential property auction is expected to give the first indication of how badly the region’s property market has been affected by Covid-19.
With the complete shut own of international tourism Queenstown’s economy is expected to be among the hardest hit in New Zealand.
Median property values soared past $1 million last year, establishing Queenstown prices as the highest in New Zealand.
But the market is showing signs of a massive shift with a huge increase in the availability of rental properties, a drop in rental prices, and many homeowners reliant on Airbnb income to pay their mortgage.
Some local observers believe the first changes will be evident when Bayleys Queenstown auction 23 homes on Friday.
Economist Benje Patterson said the number of properties being auctioned together was high for Queenstown and the sale was being seen as a barometer ‘‘for here and now’’.
‘‘It’s the most distressed sellers at present, the people that know they really need to get out of the market and no mortgage holiday is going to be the thing that helps them.
‘‘The people selling now are doing so at a very tough time.’’
It would be interesting to see what confidence there was from buyers, he said.
‘‘There’s so much uncertainty in the market. We really don’t know where things are going,’’ he said.
‘‘It will be very difficult to establish what a fair price is.’’
Listed properties at the auction include new and near-new three and four bedroom homes in subdivisions such as Shotover Country, Lake Hayes Estate, Jacks Point and Hanley’s Farm.
Patterson said sale prices were expected to be lower than the peaks of February and March, but it was unclear what levels they would reach later in the year.
‘‘That will be the end of the mortgage holidays so more people may be in a position that they need to sell.’’
If New Zealand continued to move down alert levels and a trans-Tasman bubble opened, then demand might increase as buyers become more confident.
‘‘At this stage it’s very uncertain,’’ he said.
No-one from Bayleys Queenstown was available to comment.
‘‘It’s the most distressed sellers at present, the people that know they really need to get out of the market.’’ Benje Patterson, economist