Southern region general manager John Stewart said July's median price for Central Otago (excluding Queenstown) of $497,500 was a record for the region, running against the national trend.
"While low volumes and some high-priced sales in July put the median price significantly higher than June, our agents in Wanaka, Cromwell and Alexandra have watched prices climb steadily over the past three years and particularly the past 18 months," he said.
Demand for lifestyle blocks was strongest around Alexandra and Omakau while high-value homes had been selling well around Wanaka where about 40% of customers were looking to build. There were virtually no sections for sale under $300,000.
Sales in Wanaka over $1.5 million were few and far between last year but now there was a steady stream of properties selling for more than $2 million.
"One couple who had sold their land for dairying found a house they liked that the owners had bought for $1.3 million a year ago. It wasn't for sale, but the couple wanted it so badly they kept offering more and bought it recently for $2.5 million," Mr Stewart said.
Another couple could not decide which section they wanted so they bought two at $400,000 each.
There had been a lot of Australians buying holiday homes in the district. Inquiries from the United Kingdom were also becoming more frequent.
When former Auckland resident Pam Eaton told her friends and family she was moving to Cromwell, she received two very different replies.
"It was either a great thing to do, or have you lost your marbles?" Mrs Eaton said.
She is one of many who are moving south and paying high prices for houses in the Central Otago area, against the national trend.
Having lost her husband last year Mrs Eaton was on her own in Auckland, and after visiting her sister in Bannockburn for a short while, she returned to Auckland, and soon realised Cromwell was a great town.
She returned many times to look at property.
Her house in Auckland was already dropping in value, so her expectations of a high sale price had to be reduced.
After finding the "perfect place" in Cromwell, Mrs Eaton was forced to drop her Auckland house price even further, selling at $140,000 lower than her original asking price.
She said her land agent advised her not to take the offer, as she would feel she had not looked after her interests, but Mrs Eaton had her heart set on her new home, as it had everything she was looking for.
She had an option on it and needed to confirm as soon as possible.
Despite paying $480,000, Mrs Eaton said she had been prepared to pay what it cost to get what she wanted.
She admits she was surprised at the high prices of houses in Cromwell.
Building consents for the whole Central Otago region (excluding Queenstown) were 68 in July 2005-06, valued at $6.7 million; 82 for July 2006-07, $7.9 million; and 77 for July 2007-08, $7.4 million.
