Queenstown Market Update - May 2024
As we head towards winter and a traditional slight slowing of the market, house prices remain strong. There will be a lot happening in the market over the next few months, with a number of economic and legislative changes that will impact the market, if not right away, but over the rest of 2024 and into 2025.
HOUSE PRICES
The average house price for the Queenstown-Lakes region sits at $1,450,000 for April 2024. This is an increase of 8.2% on the previous month and a 29.5% jump on April 2023. There is no secret the market is increasing steadily, and his figure can seem daunting, especially for those looking to buy a first home.
It is important to remember that this average price includes high-end suburbs like Arrowtown (current average property value $2,689,000), Jack’s Point (current average property value $1,881,000) and Lake Hayes (current average property value $2,672,000), and that this figure is not an accurate representation of every property on the market. There are still plenty of entry level homes available in different areas of the region.
MARKET ACTIVITY
First home buyers and owner-occupiers still remain the most dominant groups in the current market, as has been for sometime now. Properties are typically selling via offer or deadline sale rather than auction, with auction rooms seeing a slow down. Some properties that are going to auction are selling via negotiation after failing to sell on the day.
Despite this, real estate agents report reasonable activity, with busy open home numbers across most listings and most price brackets. The expectation is that this will continue into the winter months.
In terms of sales, there were 67 local sales completed in April 2024. which is up on 54 sales in February and down slightly on 68 sales this time last year, and less properties available often leads to higher priced offers being put on the table.
Across Otago, the average time for a property to sell is 41 days, with lower price homes often being snapped up quicker than those in higher price brackets. This figure is down 9 days on this time last year.
UPCOMING CHANGES FOR INVESTORS
We are all watching and waiting to see what impact July 1st will bring, with changes to investment properties hitting on this date. We have the new changes to the Brightline test (being reduced to 2 years vs the current 10), as well as interest deductibility being reinstated. We expect to see an increase of investors in the market after this time, and what pressure that could put on house prices and accessibility for first home buyers is still to be seen.
Right now we are recommending that if you are looking to buy a property - get in touch ASAP and let’s get you pre-approved and purchase-ready.
MARKET CONDITIONS
Interest rates and the cost of living continue to pressure the market, with no signs of easing soon. The Reserve Bank maintained the Official Cash Rate at 5.5% during both their April and May meetings, as inflation remains higher than the RBNZ's target for considering a reduction.
Interest rates are still relatively high compared to recent years, but experts anticipate they will likely start to decline towards the end of 2024 or early 2025. We are already seeing some downward movement as banks compete for potential borrowers, but note they are dropping the 2-5 year fixed terms that nobody is interested in and retaining big margins on the sought after 6-12 months fixed terms. There are some excellent cash back offers available right now, and we can assist you in negotiating the best deal with your lender.
If you are looking to purchase a property in the near future, then get in touch with our Queenstown mortgage advisors. We understand both local and national market trends and can advise you around your property purchase, no matter whether it’s a first home or an addition to your property portfolio.
Get started by calling us on 03 441 1307 or complete our online form and we’ll be in touch.
Source: REINZ & Queenstown Real Estate Sales