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Real Estate Investar Blog

Housing hype dies down around Central Otago/Queenstown Lakes

A "frenzied" housing hype appears to have died down around the Central Otago and Queenstown Lakes region.

Demand for residential properties in Central Otago and Queenstown Lakes is down 9.2 per cent over the past three months, according to latest realestate.co.nz property figures.

The real-time market statistics show residential housing demand is down nationally on average 13.8 per cent over the past three months. While many regions experienced a cooling in demand, property demand in Otago and Southland climbed by 10.7 per cent and 24.5 per cent respectively.

Bayleys Cromwell-based real estate agent Gary Kirk said there was still "a lot" of interest in properties but the market had "levelled off".

"I think prices have levelled off and I don't think they will change much. The hype has slightly gone and it is probably a better market for people. People are still getting good money but we are not getting the number we were getting of open homes and people aren't battling to get a house now. The demand has dropped off. There are quite a few homes on the market."

The main problem was the lack of sections, he said.

"There are no sections for anyone to build on. There is nothing in Cromwell but there is real demand."

Harcourts Queenstown manager Geoff Stevens said the market was probably not as "frenzied" as it was leading up towards the end of last year, but there was still demand for property, and a shortage of properties for sale, in the resort town.

"It was quite frenetic but now there has been a button-off of demand to some extent...Loan Value Ratios are effecting investing but there is still demand and there is still a shortage of properties for sale. We are still seeing some properties going to multi-offers and going in excess of their asking price. Some properties are going exceptionally well but some are sticking around in the market place for a bit longer than we would expect."

Election year traditionally caused uncertainty in the market, he said.

"Last time there was an election year things went quiet. Shortly after the election finished and the Government was in power there were pent-up buyers want to buy and it took off again."

Other figures show the average property asking price in April compared with the previous month across the region increased 5.5 per cent to $867,517.

However, the asking price fell short of the January spike when the Central Otago and Lakes District reached a record average asking price of $888,567 - a 17.6 per cent increase compared with the previous month.

While across the country new property listings fell - including Otago (22.9 per cent) and Southland (34.2 per cent) - the Central Otago and Queenstown Lakes region had 200 more property listings - an increase of 3.1 per cent compared with April 2016.
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