Changes to how rural land is developed in Queenstown are already driving up land prices – years before any new zoning laws might come into effect.
But developers are prepared to take the punt on land that may be subdividable in the future.
One particular chunk of land that stretches between Lower Shotover and Lake Hayes has already seen some big sales – and more are likely to come as developers and local authorities work out how to grow the region.
Queensland Lakes District Council already has the go-ahead from government to fast track a proposed rezoning of the land on the Te Pūtahi Ladies Mile corridor on State Highway 6, which could eventually provide some 2400 new homes.
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The land on the northern side of the road, according to OneRoof analysis, comprises more than a dozen properties, some large some small, with a combined RV of more than $100 million, while the unimproved land on the southern side has a combined RV of more than $30m.
The proposed rezoning would only cover 120 hectares along the Frankton Ladies Mile stretch, with some high-profile sites sitting outside the proposal.
The earmarked land is currently zoned low density rural, rural lifestyle and large lot residential land. The council wants apartments and duplexes, rather than standalone houses, along with open spaces, community facilities and a new commercial centre, and public and active transport such as walking and cycling.
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The changes are still some months away, with the rezoning panel set to take submissions from experts and the public in November and December before it makes its recommendations to the Minister for Environment.
A spokesperson for the council told OneRoof that should the Minister for Environment ratify an approval within the expected timeframe, then the new provisions could be operative in the first half of 2024.
Buyers are taking notice and are already eyeing up land in the area for development.
Planner Scott Freeman, from Southern Planning Group, said that the value of the properties along the stretch would be significantly more if the new zoning comes into effect, and some buyers would be willing to take a punt that it does.
“The advantage [for rural land] is that if you can do X number of new lots, that’s where the value is,” he told OneRoof.
“A lot of my clients are developers wanting increased intensification. The council will allow some lifestyle in rural areas and then push intensification in urban areas.”
Chris Farhi, Bayleys head of insights, said putting a price on land potential was tricky.
“A component of the land value includes the development potential. But there are places with a house and improvements that override the value of the subdivision potential. Some places might have more added value if you could cut off and retain the kick-ass house, plus have land for subdivision without destroying the value of the house,” he said.
Huge subdivisions already sell for big dollars in Queenstown-Lakes.
Hamish Walker, of Walker and Co Realty, is seeing large growth in neighbourhoods around Lake Hayes. Photo / Supplied
This five-bedroom home on Frankton Ladies Mile Highway, in Lakes Hayes Estate, Queenstown, sits on 3.2ha and sold for $15m last year. Photo / Supplied
Last year a 2.37ha block on Howards Drive, off Ladies Mile, sold for just over $93m. Known as the Kawarau Park development, the site has premium medical tenants as well as retail and hospitality.
Bayleys Queenstown agent Chris Campbell recently sold a 163ha development site for $70m to developer RCL Group. The property, at Homestead Bay, is next to the developer’s Hanley’s Farm subdivision of some 1000 sections, and RCL plans to carve their new acquisition into 1700 to 2300 sections over the next 10 years.
And this week OneRoof reported that Hamish Walker, of Walker and Co Realty, had sold a luxury estate in Queenstown for well over $40m. OneRoof understands that part of the land involved can be potentially subdivided.
He also sold a five-bedroom home on a 3.2ha block on Frankton Ladies Mile Highway last year for $15m, $11m more than what the vendor paid for it in 2019.
Walker told OneRoof that he’s seeing large growth in neighbourhoods around the Kawarau Park medical, retail and hospitality hub which is driving record home prices in suburbs like Lake Hayes.
The proposed zoning changes to properties along Frankton-Ladies Mile, in Queenstown. Photo / Supplied
“Three months ago I sold a brand-new four-bedroom home in Lake Hayes for $5.25m, the previous records had been around $3m and $2.65m. Because of the developed areas with those facilities, people are seeing it as a desirable place to live.”
Walker said he had another site of several hectares he’s bringing to market later this month on Ladies Mile that should fetch over $30m.
“It’s just development land, but it’s within the consultation area. Some of these people would have bought four to seven years ago, before the prospect of subdivision, and now they’ll make four times their money when they sell,” he said.
Ryan Johnson, Bayleys national commercial and industrial director, said that despite the challenging conditions across the real estate sector, there had been continued domestic and offshore interest in development land sales.
“Purchasers are seeing through the current cycle and getting their pipelines set for the next five to 10 years. Buyers are very focused on quality development opportunities to support what will be continued residential housing demand, particularly in strong population growth areas like Auckland, Waikato, Bay of Plenty, Canterbury and Queenstown.”
He said developers thinking long-term were planning 15-20 years ahead.
“They’ve got the balance sheets, they believe in New Zealand Inc, and they’re prepared to wait,” he said, adding that master-planned developments which pull together residential, commercial and, increasingly, a retirement village are particularly appealing as they “de-risk” the development.
A trophy land development site on Lodge Road, in Jacks Point, Queenstown, is looking for $40m. Photo / Supplied
New Zealand Sotheby’s International Realty is marketing a 24ha block on Lodge Road, in Jack’s Point, south of Frankton Ladies Mile, which has a special purpose zone for visitor accommodation or other tourism ventures. Price expectations for the property are around $40m.
The agency is pitching the site overlooking Homestead Bay as the only remaining luxury development site in Queenstown, suggesting the extensive lake views will nail an ultra-luxe global resort brand for a high-end resort development. Homes in neighbouring Jack’s Point Reserve are worth up to $20m and the site has a usage agreement with the Jack’s Point golf course, which it overlooks.
Colliers Otago managing director John Scobie noted in the company’s recent property market review that the high cost of land is challenging for Queenstown’s low and medium-income earners as the gap grows between them and mortgage-free luxury homeowners but pointed to a swag of developments around Queenstown, some as small as 30 lots.
As well as the large-scale Te Pūtahi Ladies Mile corridor, there are other subdivisions planned, including over 33ha at Goldfields Heights, between Frankton and the town centre, which will release 600-700 sections in the next 15 years and Park Ridge, a 48ha Special Housing Area, also on State Highway 6, that will have 632 sections and a commercial centre.
On the Frankton-Ladies Mile highway, retirement village owner Arvida is building 141 villas and 29 apartments, alongside its country club and a hospital and dementia care unit, planned for early 2025 completion.
For low-income earners, Tewa Banks, an affordable housing development of 68 sites in Arrowtown will be completed by the end of 2025 and Ngāi Tahu Property, in partnership with the Crown, is building 300 apartments and terrace homes, a third qualifying for KiwiBuild, on the former Wakatipu High School site on Gorge Road.
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