Queenstown tops house price growth expectations for ninth quarter

Survey finds a net positive 23 per cent of respondents expect overall national median prices to rise over the next 12 months

Construction has commenced on Toru Apartments in Remarkable Park, in popular Frankton, Queenstown
Construction has commenced on Toru Apartments in Remarkable Park, in popular Frankton, Queenstown

Queenstown has maintained its two-year reign at the top of New Zealand for house price growth expectations, beating all other centres for the ninth consecutive quarter.

Colliers International’s latest Residential Property Market Outlook Survey found a net positive 23 per cent of respondents expect overall national median prices to rise over the next 12 months.

While this outweighs those who expect a decline, expectations in the December 2018 quarter have softened overall from a net positive 26 per cent in September 2018 and a net positive 36 per cent in June 2018.

Queenstown took out first place this quarter with a net positive 49.8 per cent of respondents expecting house price growth, followed by Tauranga/Mt Maunganui (46.8 per cent) and Wellington (36.6 per cent).

The top three remains unchanged from the previous quarter.

Queenstown has held onto the top spot since December 2016, when price growth expectations were at a net positive 75.8 per cent.

It claimed the crown from Hamilton, which recorded a net positive 75.8 per cent at September 2016. Before that, Tauranga/Mt Maunganui held the top spot, with 85.7 per cent at June 2016.

Toru Apartments in Queenstown features a mix of freehold one, two and three bedroom apartments
Toru Apartments in Queenstown features a mix of freehold one, two and three bedroom apartments

Fred Bramwell, Residential Sales Director at Colliers International Otago, says sales prices in Queenstown remain strong.

“We have seen a significant increase in listing activity over the past two months which is heartening for the purchaser market, but buyer enquiry leading into the end of the year has shown signs of softening.

“Sales prices have remained strong across all market sectors, and forecasts for burgeoning visitor and resident numbers are confidence boosting to those entering the market.”

Chris Dibble, Research and Communications Director at Colliers International, says the latest national result is up from a net positive 15 per cent at the December 2017 quarter.

However, the timing of that survey coincided with the November general election.

The region-by-region trend this quarter was of a modest dip in positivity, says Dibble.

“Queenstown was among eight of 12 regions to record a decline in the proportion of respondents expecting median prices to increase when compared to the previous quarter,” he says.

“While sentiment in Queenstown is still overwhelmingly positive, it is down 10.4 per cent from a net positive 60.2 per cent in the September.

“Bucking the regional trend were respondents’ expectations for Tauranga/Mt Maunganui, Wellington, Hamilton and Palmerston North, which were the only locations to record an increase in median price growth expectations this quarter relative to the previous quarter.”

Dibble says the survey also asked respondents about the likely impact of the Reserve Bank of New Zealand’s recently announced loan-to-value relaxations.

“When asked if the LVR move would have an influence on investor decisions for 2019, 26 per cent of respondents indicated they would invest more, 62 per cent the same and 12 per cent less.”

The quarterly research survey drew on a total of 5,962 responses.

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