Queenstown residential property sales are down 50% on a year ago, which had been reflected in a 50% drop in real estate agents' returns.
Although prices in the Queenstown residential sector are static at a median $530,000-$550,000, the number of property sales is down 50% on a year ago and real estate agents' returns are down 50%.
Similarly, foreign interest in the area which peaked at 50% of sales at times has dropped to just 10% to 15% of the market, Real Estate Institute of New Zealand spokesman for the Central Otago Lakes district Adrian Snow said.
"Having the highest median price is more of a curse than a blessing, because the average wage and salary earner finds it hard to afford a home," Mr Snow said.
Queenstown was "definitely a buyer's market" now and for the first time in seven to eight years, domestic buyers were able to dominate the market.
Recent prices against capital values (CV) varied widely, from 10% below CV to 50% above and while domestic buyers could be down 10% to 15% on prices paid a year ago, they would also pay less for their next home.
Hardest hit in movement were homes in the $700,000 to $1 million bracket, with "very little activity," Mr Snow said.
It was a common complaint of Queenstown businesses that people suitable for new staff positions rejected offers because they could not afford to rent or buy in Queenstown.
At the front-end of the finance sector problem is the rising number of mortgagee sales of residential properties around Queenstown.
Mr Snow said although the institute did not keep statistics on mortgagee sales, they were increasing in Queenstown.
He did not believe the area was any worse than any other in the country, but conceded that having the highest median prices would flow into higher mortgages for buyers"There will be people out there who may have been more extended [bigger loans] than they would have liked," he said.
"The developers are coming under more pressure because of the global credit crunch and finance sector problems," he said of the raft of finance companies in trouble at present.
Although there were reports of up to 10% of real estate agents leaving the business in parts of the North Island, he believed only about 5% had left the immediate Queenstown area during the past year, both those who had retired and those who had left to pursue other careers.
