Queenstown is in the middle of a ‘‘perfect storm'' of housing supply and demand, posting one of the largest annual increases in property values across the country.
It appears just as Auckland created a ‘‘halo effect'' in recent months, as its high prices forced buyers out to regional destinations, Queenstown's ballooning prices have similarly made other Central Otago townships more attractive to buyers.
The national value is now 37% above the previous market peak of late 2007.
Nationally, the Quotable Value price index for April has the national price up 12% on a year ago at $568,000, Auckland up 16.5% at $942,760, Queenstown up 17.8% at $842,600 and Dunedin up 9% at $317,700.
QV national spokeswoman Andrea Rush said home values increased in all the main centres and many of the regional centres during April, as the promise of continued record low interest rates provided confidence in the housing sector.
ASB economist Kim Mundy said while housing would influence the Reserve Bank's willingness to cut the interest-driving official cash rate, there was a growing likelihood the bank would ‘‘ratchet up'' its lending restrictions to dampen the housing impact of still-lower interest rates.
‘‘House sales are continuing to outpace the supply of houses and this tightness is putting pressure on house prices,'' she said.
She expects the Reserve Bank to cut the OCR by a further 25 basis points next month and in August from its present 2.25% record low.
Of the 100 areas covered by QV, only the Buller and Grey districts showed annual price declines, while 45% of the 100 areas posted double-figure gains, ranging from 10% up to 27% in southwest Hamilton.
Ms Rush said the average value at Queenstown Lakes was $842,600 and Central Otago was up 13.5% at $366,400. That growth was now spreading to nearby centres such as Wanaka, Cromwell and Clyde as people looked beyond Queenstown for more affordable housing.
‘‘There is strong growth occurring in Central Otago, with the Queenstown market experiencing a perfect storm between a massive shortage of tourist accommodation and rental accommodation for people living in the town, as well as huge demand for homes, holiday homes and investment property,'' she said yesterday.
For the same reasons, Central Otago and Clutha districts were both up more than 5% during the past three months, she said.
‘‘Meanwhile, it appears investors have also returned to the Invercargill market and values are on the rise there, too,'' Ms Rush said.
QV's Dunedin registered valuer, Duncan Jack, said home values in the city were continuing to show steady increases, up 2.2% during the past three months and 9% on a year ago. The average value was now $317,700.
He noted city sales numbers were up by more than 15% on a year ago and the strongest competition continued to be in the low to mid value ranges, between $200,000 and $350,000.
‘‘There continues to be good levels of demand from first-home buyers, local movers, those relocating to live in the city and also from out-of-town investors looking for the good yields that the city offers,'' Mr Jack said.
Anecdotally, some city real estate agents have in recent weeks claimed more than 50% of their respective sales have been to buyers outside Otago, the ODT has been told.
Mr Jack said ‘‘As with previous months the competition from buyers is resulting in properties selling quickly and assisting in driving values levels up.''
