A global trend for owners of property in alpine resorts to “go for the winter and stay for the summer” is ringing true in New Zealand, according to Bayleys.
In its latest Total Property portfolio, the firm looked into purchaser dynamics across the country’s snow hotspots and found high levels of activity and an evolving buyer base given the rise of remote working models, year-round recreational activities, and potential for rental income as a hedge against inflation.
These leanings mirrored the findings of Bayleys’ global real estate partner Knight Frank in its Ski Property Report 2024 which canvassed client sentiment across 34 countries and territories.
It found buyers were seeking out snow-sure resorts with longer ski seasons, or targeting locations that offered a broader mix of ski and non-ski activities with recreational options for the summer months.
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Commercial and industrial property that supports residential growth in these snow-driven areas has also prospered, with satellite locations playing an important role given land constraints in the alpine towns themselves.
Bayleys South Island commercial director William Wallace points to the Queenstown market which effectively operates in its own market bubble.
Commercial property has attracted record yields, with some of the lowest vacancy rates in the country, and development activity is strong.
“Location, location, location means high demand, short supply, competition and rising values – buyers across all property sectors cannot get enough of Qutown.”
Wallace says off the back of Queenstown’s “darling status”, towns like Wānaka and Cromwell have also flourished, both for the points of difference they offer, and in the case of Cromwell, as a valuable satellite support town with significant industrial and logistics growth as businesses seek operational and bottom-line efficiencies.
He says there are opportunities for well-capitalised entities to acquire sites with scale in alpine locations, like 3.13ha of land with premium lake and alpine views across two high-profile sites in Takapō Lake Tekapo, and a 34ha Wānaka landholding with extensive lakefront profile.
“Sites with true scale are loaded with opportunity. Look at the evolving Ayrburn large-scale hospitality precinct with a planned retirement village, boutique hotel and conference centre near Arrowtown – it’s a paradigm shift for New Zealand.”
Bayleys Queenstown residential sales manager, Dee McQuillan says there has been a tangible swing in the real estate market post-pandemic and a notable influx of buyers out of Auckland.
“Queenstown is no longer just a once-a-year ski holiday destination, with many now relocating here for all, or a big part, of the year for better work-life balance supported by new hybrid work practices.”
High-profile new developments like Coronet Peak Alpine Villas, Waipuna Rise and Five Mile Villas are widening the buyer net further, says Bayleys national director projects, Suzie Wigglesworth.
Five Mile Villas is a Gibbons Co. development in Frankton offering 226 stand-alone, freehold two-bedroom residences, with Stage 1 scheduled for completion at the end of this year, then Stage 2 and 3 in early 2025.
“These Scandinavian-influenced residences will appeal to out-of-town buyers seeking an affordable ski base, first-home buyers, or investors – with bulk sale deals available for companies looking for worker accommodation,” says Wigglesworth.
Also in Frankton, the master-planned gated Waipuna Rise project by Queenstown-based property development company Latitude 45 offers options for owner-occupiers and investors, while Redwood Group’s Coronet Peak Alpine Villas is complete, with Stages 2 and 3 scheduled to settle later this year.
Wānaka is also undergoing significant growth, with increased demand from Auckland and other North Island buyers, according to Bayleys Wānaka branch manager, Sherie O’Neill-Johnson.
“Around 30 percent of sales in the last 12 months were to North Island/Auckland buyers, and overall, deal numbers are up on the same time last year.
"The Queenstown Lakes District, which includes Wānaka, has been one of the only regions in New Zealand to see value growth post-pandemic highs.”
Paul Anderson, chief executive officer for NZSki Limited says the Queenstown region has significant challenges in attracting and retaining workers in the service and hospitality sectors given the tight property market, hence it has front-footed the rental shortage.
NZSki owns and operates Coronet Peak and The Remarkables ski fields in Queenstown, and Mt Hutt in Methven.
It recently bought the Sir Cedrics Tahuna Pod Hostel in the CBD, has started building apartments in central Queenstown to supplement five houses it owns, and acquired a facility in Methven to provide accommodation for some of its Mt Hutt staff.
“Our accommodation portfolio will provide options across roles, age groups and budgets and while it’s not practical to house all our staff, and accommodation is not our core business, we’re being proactive – despite the upfront costs.”
The North Island’s Ruapehu District has cemented itself as a year-round destination for visitors with adventure pursuits like hiking, cycling, kayaking and fishing extending the region’s ski season.
Bayleys Whanganui and Ruapehu director John Bartley says recent clarity around ski field operations for Tūroa and Whakapapa has given the local business community a confidence boost, and will help support real estate activity and values.
“Ruapehu is not trying to be Queenstown. It’s an easily accessible, affordable and old-school destination and this is appreciated by national buyers who made up 44 percent of residential property purchasers through Bayleys Ruapehu in the last 12 months.”
- Supplied by Bayleys
