Queenstown’s ‘ghost home’ nightmare

Queenstown’s housing problem is complex and not easy to fix, say those in the industry.

The expensive tourist town has seen a "ferocious" resurgence of population since it emptied of tourists and staff after Covid arrived.

Now they are back and there is a dire shortage of rental accommodation with some people sleeping in cars as winter approaches.

But the problem is not a lack of houses, says independent economist Benje Patterson, who lives in Queenstown.

Among issues faced by the town is that Covid led to a big demand for secondary homes by Aucklanders and others buying to holiday there but changes to legislation have made people more reluctant to rent their properties out.

Queenstown is still super expensive, Patterson says. While values have flattened, the town has not slumped like some other parts of the country’s housing market.

The latest OneRoof-Valocity house price figures show the average property value in Queenstown-Lakes district grew 1% in the last three months to $1.908 million, and is up more than half-a-million dollars on pre-Covid levels.

Harcourts agent Priscilla Uhrle says there is a dire housing shortage but that there are still plenty of affordable homes under $1m to buy if people look to apartments and older townhouses.

Queenstown has distinct categories in its housing market, ranging from managed apartments used by owners a set amount of time per year to multi-million-dollar luxury houses in the hills which often sit empty for parts of the year.

Patterson says the luxury homes don’t usually form part of the rental pool anyway but there are thousands and thousands of standard three to four-bedroom subdivision homes around, some of which have been bought as secondary homes, that are now not going to the rental pool either but rather to Airbnb and Bookabach.

Data shows rental properties with active bonds lodged went up in the early stages of Covid but have been steeply declining over the past year, he says.

"We’ve actually been losing rentals at the same time as we still had pretty sharp population growth."

Homeowners don’t want the "fuss" of putting the house into the rental pool, or they want to keep it as a holiday home or as something to retire to further down the track.

Patterson points to legislative changes which he thinks have misfired in a town with a different mix of tenants to other places.

The changes include the removal of tax deductibility for landlords, new healthy homes standards and also changes to the Residential Tenancy Act which Patterson says all play a role in a complex picture.

Healthy homes standards make it harder for older properties to be rented, but the standards don’t apply to short-term accommodation which is why in Queenstown those homes go on Airbnb.

Landlords have not been as active because of the removal of tax deductibility, and the Residential Tenancy Act changes have meant formerly common short-term rentals for eight or 10 months to seasonal workers are not so easy.

"Don’t get me wrong," Patterson says, "these are very well-intentioned policies that long-term are incredibly beneficial to help protect tenants but we’re facing the brunt of it here and now, because the stories of people sleeping in cars are real, absolutely real, you just need to drive around backstreets and see it at night."

There needs to be short-term levers made available in a town like Queenstown to encourage rentals, he says, because the housing exists.

"Put it this way, if someone gave me a crowbar and immunity from prosecution, you could solve it overnight.

"There are physically enough beds and enough sheets in this town to house everyone, it’s just availability and use of housing."

 - OneRoof