Harcourts Otago Market Report- Edition One 2021

t r o p e R Queenstown | Wanaka | Dunedin | Cromwell | Alexandra | Balclutha

Six offices. One team.

Highland Real Estate Group Ltd Licensed Agent REAA 2008

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In Dunedin the rise has been meteoric, up to a median of $618,000 in January 2021 compared to $589,000 in December 2020 and $548,000 12 months previously.

The Queenstown Lakes District saw a 7.6% decrease in median house prices from $1,055,000 in January 2020, down to $975,000 in January 2021. However, sales volumes increased 44.9% annually with 71 properties sold in January 2021.

It means that Queenstown and Wanaka are still among the most expensive places in the country to buy a house as expats in particular look to return home earlier than planned or make sound investments in a part of the country they hold dear.

Harcourts Otago’s team approach to selling property across its six offices is continuing to see outstanding results at auction, thanks to maximum exposure through Harcourt’s extensive referral network and buyer database.

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In the Central Otago District the median price in January 2021 was $670,000, compared to December 2020 at $669,000 and $585,000 in January 2020.

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The Harcourts website has also had almost twice as many unique visitors compared to any other real estate group for April and June 2020, the latest comparative figures available.

Wanaka is short of listings and with it’s ‘kiwi-centric’ appeal it’s affecting the ability of potential buyers from around the country to move into the township.

“While increasing numbers are coming to Queenstown and Wanaka from overseas as a lifestyle destination, people are also shifting around the country in large numbers,” says managing director Warwick Osborne.

“The pandemic has jumped us forward by many years in the realisation that people can work remotely but enjoy an outstanding lifestyle of lakeside living in the mountains with their families while they do so.

“While money is still ‘cheap’ and interest rates are still helping people to access the market, it’s a fluid situation which is difficult to predict over the coming year.”

s n o i t c u A The word auction has Latin origins, from the word augere (to increase). And in a market that is short on supply and enjoying record low interest rates, there never has been a truer word to describe the results an auction can deliver.

Each and every week we conduct auctions where we continue to be surprised (and our sellers are delighted) by the level of fierce interest and bidding on some homes. In the past three months Harcourts Otago has called 43 auctions, with 56% sold under the hammer and 35% sold post auction, an overall 91% sold. In many cases multiple bidders have competed to own the home.

Buyers appreciate the open and transparent process, and sellers are enjoying the benefits of a process where the buyers compete with each other, rather than directly with the seller.

Our team of auctioneers started the year with a one-day training and refresher course hosted by champion auctioneer Phil McGoldrick.

Highland Group Auction Manager Richard Stringer believes every auctioneer should train regularly and compete in auctioneering championships to ensure they’re at the top of their game. Several Harcourts auctioneers will compete in the LVD Auctioneering Invitational Champs in Queenstown at the end of March.

It’s attracted a field of over 40 auctioneers from around the country and Richard will be one of the judges.

91% SOLD

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QUEENSTOWN

Queenstown is still a place of exceptional aspirational demand when it comes to real estate, and we don’t believe that’s ever going to go away.

Property prices in the town continue to be boosted

by Australians and overseas kiwis who are buying houses online without even stepping foot in the resort. They’re using the latest Harcourts technology which enables them to get ‘inside’ a house for a bird’s eye view of the property, or having friends or family to view on their behalf.

The town may seem quieter, but there’s still good demand given that the market is relatively small compared to other parts of the country. Queenstown’s always punched well above its weight as a great contributor to GDP and it will in the future.

Increasing numbers of Kiwis have changed work patterns in the past year, working from home or a combo of home and office. People are taking a long-term view of where they want to live and work, factoring in remote working especially when money is incredibly cheap.

We’ve seen strong demand out of Wellington and Auckland thanks to continued Government spending and employment having a flow-on effect for Queenstown.

There’s considerable buyer interest with open homes staying busy and plenty of enquiries from local purchasers, out-of-towners and those returning Kiwis.

Supply in Queenstown is holding up with some older former rental homes in Fernhill and Sunshine Bay coming onto the market thanks to a drop in rental incomes, and Healthy Homes and tenancy legislation changes.

It’s difficult to predict what may happen in the short term with the return of LVRs and wider moves by the government to slow the market.

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MARKET REPORT 2021 | View online at www.harcourtsotago.co.nz

$550-$650 WEEKLY RENT

$1,120,000

MEDIAN DWELLING PRICE

$635,000

MEDIAN SECTION PRICE

TORU APARTMENTS SUCCESS The Toru Apartments in Remarkables Park have come on to the market and interest has been strong from the get-go.

The vendor is the Queenstown Housing Trust offering a 50% ownership scheme and of the ten properties Harcourts is selling on the open market, eight have already gone unconditional with only two available for purchase.

The just-completed apartments have been finished to a very high standard with one-bed prices at $450,000 - $495,000, and two beds at $625,000 - $650,000. As unit titles, owners will own the property outright.

All buyers to date have been locals or soon-to-be locals, and all bar one are owner-occupiers. It’s a great feel-good story for the resort as the Housing Trust is offering 25 apartments to buyers for the same price they cost to build -- it’s been a long time since a $200,000 mortgage could get you into your own home in Queenstown.

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WHERE ARE OUR BUYERS FROM?

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MARKET REPORT 2021

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WANAKA

$600-$650 WEEKLY RENT

$1,000,000

MEDIAN DWELLING PRICE

$515,000

MEDIAN SECTION PRICE

Median sale prices have been calculated from August 2020 - January 2021 Source REINZ

FREE MONEY – it’s a term we’re hearing more frequently in recent days, and commentary is that interest rates will likely stay relatively low into 2023 and maybe beyond. But is it the only thing driving the Wanaka market?

Arguably it’s a key driver, yes, but here in Wanaka we’re handling strong demand from Auckland and North Island buyers who have reflected on and assessed their employment, living arrangements and property and compared it to a lakeside lifestyle in this spectacular location. And then they’re moving forward with their plans.

Section developments are selling out, homes are being competed with multiple buyers keen and ready to go and investment properties are being snapped up in an effort to secure futures. Auctions continue to be the preference of buyers and sellers, and our results at Harcourts are the true measure of success. 64% of our auctions have sold under the hammer in the last three months, with another 21% sold soon after auction.

At any event we attend we’re always seeing and hearing from so many people who are keen to catch up with their local trusted agents. Most enquire about the market (the subject on everyone’s lips these days, let’s get out our crystal ball) and confide in us about their real estate plans so we can help making them a reality. The key word here is ‘trust’, something Harcourts is renowned for. If you have a property you think could benefit from the outstanding exposure we provide 365 days a year, then come and talk to us today.

DID YOU KNOW…

One of Mount Aspiring National Park’s most popular day walks – the Rob Roy Track -- has officially reopened. It closed in July 2019 after a significant slip undercut the track.

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However the good news is that opportunities are available for both buyers and sellers at present and our consultants have been kept busy gathering a portfolio of properties to showcase at popular summer events which attract visitors and participants from around New Zealand.

We’ve also been working hard on the launch of a brand-new subdivision to the market, which we’re hoping will go some way towards satisfying continued high demand for land. To find out more, be sure to get in touch as soon as possible for first dibs on the pick of the sites.

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DUNEDIN

Market

RECORD BREAKING ALL AROUND! 2021 kicked off with a low volume of sales with just 84 homes sold in January. However that’s no reflection on demand, more on limited choice combined with the traditional holiday period. After a challenging year and a lack of overseas travel, it seems Dunedin’ites were keen to get out and explore local holiday options, while the search for real estate went on the back burner.

DID YOU KNOW…

The legendary Cobb & Co is returning to the historic Dunedin Railway Station even as restoration work starts on the Heritage New Zealand category 1-listed building.

Here’s something for investors to take note: Demolition of the Cadbury building is well underway with building of the new hospital expected to start in the next two years. That means there could be as

The median days on market stretched out to 30 but

many as 1,000 workers needing accommodation on

we’re fully expecting that to come back to mid 20’s

this one project alone. Add to that other projects

this month.

such as the new ACC office building on Dowling

February has kicked off with a hiss and a roar, with a rush of properties coming on the market giving buyers a little more choice. However supply remains tight compared with demand and homes are still being

Street scheduled to start construction this year with completion in 2024, and you can quickly see how this infrastructure investment is going to maintain pressure on Dunedin housing supply.

snapped up quickly.

The median value rose to a record-breaking $618,000

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for January 2021, the first time it’s broken through the $600,000 barrier. This represents a 12.8% increase on January 2020, and the median has more than doubled in value over the last five years.

With interest rates remaining low, the demand will continue from first home buyers and others looking to upgrade their existing home.

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MARKET REPORT 2021 | View online at www.harcourtsotago.co.nz

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Overseas

MARKET REPORT 2021

$465

WEEKLY RENT

$300,000

MEDIAN SECTION PRICE

$580,000

MEDIAN DWELLING PRICE

Median sale prices have been calculated from August 2020 - January 2021 Source REINZ

The Dunedin City Council has released Variation 2 of the 2nd generation district plan (2GP) with public submissions open until March 4. It’s been a long-running saga to get this far so let’s hope there are no more delays, as the need for development land is greater than ever. In addition to opening up rural land for residential development, the plan also increases density by reducing minimum section size from 500sqm to 400sqm in residential 1 zoning. It also allows family flats to be built and could make it easier to build duplex-type homes or second dwellings on sections greater than 500sqm in size.

It will take some time for these changes to ease the shortage of residential real estate in Dunedin, so the future looks positive for further growth in house values in the meantime.

DID YOU KNOW…

Dunedin Mayor Aaron Hawkins has welcomed news that the last oil and gas exploration permit in the South Island is likely to be surrendered. He says the council’s focused on transitioning the city’s economy to being net-zero carbon by 2030.

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Market

We’ve had a very quiet start to the year in Balclutha with just four sales in the town and 10 overall in the district. The median value stayed fairly constant at $370,000.

This low sales volume is really due to a shortage of supply, as demand remains constant. There were just three sales in Milton, but we have seen demand from Dunedin buyers for areas south of the city, with some of the new builds in Waihola continuing to prove popular as they’re just a half hour commute to the city.

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CROMWELL

Cromwell is experiencing a similar market to the rest of the country, low stock volumes and high buyer demand driving up prices at a rate that continues to surprise all the pundits. The median dwelling price rose from $685,000 in October 2020 to $820,000 in January 2021, with median days to sell correspondingly down to 33 in January 2021 from 40 in October.

Ten properties have sold in the past three months valued at over a million dollars, showing a growing confidence in the value of some lovely Cromwell district homes. A property in Bannockburn, with outstanding views towards Cromwell and Lake Dunstan, recently sold for just under $2million.

It’s all indicative of the fact that Cromwell is growing up and has developed into a destination in its own right. Did you know it now has a bigger population than Alexandra?

We are seeing strong buyer interest and significant sales volume with section prices ranging from $275,000 to $595,000. A limited supply of titled sections has seen local building companies support this development, with titles due from mid-2021.

Buyer inquiry is strong out of the main centres.

The property rental market remains strong with limited housing availability and rents remaining stable although there’s so few available throughout Central Otago.

The commercial market is busy as well, with development in the industrial area continuing with two significant buildings under construction and another planned commercial subdivision awaiting consent. Queenstown companies are moving in, seeing Cromwell as a great ‘centre point’ for business. Sign It Signs has recently set up Sign It Central to cater for bigger businesses.

Highlands Motorsport Park continues to develop – an hilarious TV interview recently showcased it's ‘Loo with a View’ which shows you what the staff get up to when the boss is stuck in Australia. Seriously

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MARKET REPORT 2021 | View online at www.harcourtsotago.co.nz

$500-$550

$750,000

WEEKLY RENT

MEDIAN DWELLING PRICE

$320,000

MEDIAN SECTION PRICE

though, it shows they’re still willing and keen to invest in our town.

Old Cromwell continues to develop with the restoration of McNulty House all but completed, thanks to a successful auction run by the Harcourts Cromwell team raising over $8,500. The team arranged auction items and ran the auction on the day, as well as advertising it to the local community.

The outlook is positive, as being in a central location Cromwell is ideally placed to service the Central Otago and Southern Lakes districts.

DID YOU KNOW…

Australasia’s largest waterpark has been making a splash, drawing the crowds in their thousands to the shores of Lake Dunstan with 10,000sq m of inflatable equipment that makes up Kiwi Water Park.

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ALEXANDRA

$420-$450 WEEKLY RENT

$510,000

MEDIAN DWELLING PRICE

$305,000

MEDIAN SECTION PRICE

Median sale prices have been calculated from August 2020 - January 2021 Source REINZ

The median dwelling price is at 600,000 for January 2021, up 6% on the previous year. There were a total of 22 sales for January, down slightly on the year prior. A shortage of titled sections has seen a lift in prices with the median Alexandra section now $325,000. Clyde has seen a significant lift in section prices, with two recent sales each over $400,000.

At the current rate of sales there’s only five weeks’ supply of residential properties on the market, with average sale time now less than a month. That’s driving up prices – only 25% of those currently available properties are under $600,000. Vacant lifestyle blocks have been snapped up to the point where there’s now a shortage of listings and a significant increase in asking price.

Buyer demand remains strong with first home buyers and investors active in the market. First home buyers don’t have a lot of stock to choose from and some landlords are making the most of a capital gain.

On the commercial front, PGG Wrightson has moved into its new premises and GWD Toyota’s new showroom and workshop in Centennial Avenue opens in March. In a game of merry-go-around, that will enable another prominent business to relocate into the current GWD building.

Two exciting new developments have been given the go ahead. In Alexandra, a new Countdown supermarket has resource consent for a 3000sqm store expected to generate up to 60 new jobs. Site clearance should go ahead in spring with opening planned mid to late 2022.

Plans for a $200million retirement village in Clyde have been approved subject to resource consent, enabling developers to progress work on the 13ha site including 164 retirement homes, an 80-bed dementia care unit and 36-section subdivision.

Buyers are 48% local, 34% from the rest of the South Island and North Island buyers have significantly increased to 17%.

DID YOU KNOW…

The new owners of boutique Alexandra wine company Weaver Estate have connections to the man known as the godfather of Central Otago wine. Weaver Estate is one of Alexandra’s longestestablished vineyards and is now owned by Brian and Jen Watson. Jen’s father Alan Brady is one of Central Otago’s wine pioneers.

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PROJECT

g n i t e k r Ma Powered by Harcourts Otago

G I B BSTO N VA L L E Y STAT I O N P R OJ E CT T E ST I M O N I A L Knowledge and expertise gained over 25 years of project marketing defines Harcourts Otago as a leader in this field, covering everything from commercial, rural, lifestyle, residential, hotels and retail sectors.

Harcourts Otago is backed by the nationwide and global Harcourts brand, voted New Zealand’s Most Trusted Brand for eight years in a row by clients. And Gibbston Valley™ CEO Greg Hunt is one very satisfied client following last year’s hugely successful launch of Gibbston Valley™ Station.

BRIEF AND BACKGROUND Having bought the station land in 2003, owners Greg Hunt and Phil Griffiths gained development consent in 2007. Then, under a District Plan review, gained Resort Zoning in December 2019, when they launched their high-end Lodge & Spa located on the current winery site. Harcourts was appointed to assist with the marketing launch preChristmas 2020, with a range of properties in the first development of the $750million, 1,000-acre station. A selection of two, three and four-bedroom properties (ranging in price from $1.25m plus GST to $4.5m plus GST) formed part of this introduction to the market.

The resort will also include access to a nine-hole golf course, a Country Club and Spa, Wellness Centre, Restaurant, Gym and a bespoke Vintner’s Village with Artisan Shops, Café and Garden Centre.

The first stage of the development is a collection of 98 homes, collectively called The Vines.

Building is anticipated to start in August this year.

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MARKET REPORT 2021 | View online at www.harcourtsotago.co.nz

CLIENTS REFLECTIONS “New Zealand has been positioned favourably out of the Covid pandemic and has enhanced its position and perception as a quality destination and possible bolt-hole for any future crisis,” says Greg “Gibbston Valley™ has recognised this favourable positioning of New Zealand and the appeal that Queenstown and Central Otago has, not only within New Zealand but the Australian and wider market”.

“We see Gibbston Valley™ being well-positioned to appeal to this audience as a place to own a home, potentially a second or third home, while recognising the opportunity that it is a great investment ”.

“I knew we needed an affiliation with a quality real estate agency to give us the reach through their databases, client relationships and channels to the audience we needed, which is why we chose Harcourts Otago”.

“I couldn’t have been more impressed by Hamish Walker and Warwick Osborne from the moment they presented their marketing plans, developing a good integrated campaign that demonstrated how invested they were in working with me as a team, thinking outside the square and selling a unique resort product. In particular, Hamish has been an integral go-between for our sales office and Harcourts, ensuring the resort was optimally positioned starting the marketing campaign”.

R E S U LT S The initial launch of sites at Gibbston Valley Station drew “unprecedented” levels of enquiry in a frenetic ten-day period where further sections were released early to meet demand. Sir John Key, cricket star Brendon McCullum and others were among the first to sign up, setting the benchmark for a ‘flight to quality’.

The Harcourts team and Greg were unexpectedly kept busy over the Christmas and New Year period delivering contracts and dealing with enquiries thanks to wide-ranging marketing and media campaigns.

“They worked really hard and I was impressed to see the hours they put in as a team,” says Greg.

Harcourts Queenstown managing director Warwick Osborne says the company’s delighted to work with owners of a development of this scale and quality. “This is the first resort of this nature seen in New Zealand for many years,” he says.

FUTURE PLANS Golf course sections are planned for release in April.

We have a great team and by thinking outside the square we continue emphasising our points of difference. We’re looking forward to hosting buyers at our annual Gibbston Valley Concert in 2022 concert so they get to experience the benefits of living at Gibbston Valley,” says Greg.

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Otago

Our vast network of active buyers in the region, nationally and internationally gives you the best chance of generating maximum interest in your property.

With the power of the largest real estate group in New Zealand behind us, our business is specifically set up to enable buyers and sellers from around the world to come together and mutually achieve their property ambitions.

Cromwell.

Alexandra.

Balclutha.

Dunedin.

Wanaka.

Queenstown.

03 445 1155 cromwell@harcourts.co.nz

03 418 1990 balclutha@harcourts.co.nz

03 443 7829 wanaka@harcourts.co.nz

03 440 2088 alexandra@harcourts.co.nz

03 477 5334 dunedin@harcourts.co.nz

03 441 0777 queenstown@harcourts.co.nz

www.harcourtsotago.co.nz Highland Real Estate Group Ltd Licensed Agent Reaa 2008