- An eight-bedroom home on Bendemeer Lane in Lake Hayes sold for over $12 million last month.
- Lake Hayes and Arrowtown have seen significant price growth, with average values up 67.9% and 80.7%.
- The demand is driven by upper-market buyers and a shortage of new housing.
An eight-bedroom home on Bendemeer Lane, in the wealthy Queenstown suburb of Lake Hayes, sold last month for just north of $12 million.
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It’s one of several big sales in the suburb, which has enjoyed huge price growth in the last five years.
New data from OneRoof shows properties in Lake Hayes and neighbouring Arrowtown have outperformed the rest of the country and are on a fast track to becoming New Zealand’s most expensive suburbs, a record currently held by Auckland’s Herne Bay.
The average property value in Lakes Hayes has jumped $1.135m (67.9%) since December 2019 to $2.806m, while Arrowtown’s has grown $1.255m (80.7%) to $2.811m over the same period. No other suburb has come close to matching their gains.
The data identified 32 other suburbs where property values were up by more than $500,000 after five years of market peaks and troughs. The nationwide value gain was $219,000 over the same period, although the research found six suburbs, mostly in urban Auckland, where homeowners lost money.
The house price surge in Lake Hayes and Arrowtown is being driven by buyers at the upper end of the market.
Cam Winter, of Oliver Road, who brokered the Bendemeer Lane deal, told OneRoof he had also sold a luxury home on Arrowtown Lake Hayes Road for $5.9m and two others in the vicinity for more than $4m.
He said his Lake Hayes buyers, some of whom were from Australia, rated the suburb’s high-class bars and restaurants, including the award-winning Amisfield Winery, Mora restaurant and winery, and the new Ayrburn dining spot that opened earlier this year.
“We’re seeing interest out of Sydney and out of the region. It’s a massive hotspot,” he said, adding that both Lake Hayes and Arrowtown appealed to holiday buyers who wanted to avoid the crush of Queenstown.
16 Advance Terrace, in Arrowtown, has an asking price of $6.47m. Photo / Supplied
Walker & Co agent Hamish Walker says buyers in Lake Hayes and Arrowtown are paying 50-90% more than in early 2020. Photo / Supplied
“It’s an absolute mecca. The money is pouring in.”
Winter said bigger and better homes had replaced much of the suburbs’ old housing stock, driving up prices. Buyers who didn’t want to wait were prepared to pay a premium for a new home, the construction costs of which ranged from $10,000 to $50,000 per square metre.
One such house is 16 Advance Terrace, in Arrowtown, which Winter has listed with an asking price of $6.47m.
All the agents OneRoof spoke to say the suburbs have benefitted from the fact that Queenstown Lakes District Council has approved very few new subdivisions in the district.
Walker & Co agent Hamish Walker, who recently got $5m for a four-bedroom bedroom home on Advance Terrace, said buyers were paying 50% to 90% more than people paid for properties back in 2020, when Covid restrictions closed the doors on international tourism for two years.
“A small 90sqm home that sold at auction in 2021 for $1.2m sold a year later in late 2022 for $2.4m after some renovations,” he told OneRoof.
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Richard Newman, principal of Bayleys’ Arrowtown office, said that Arrowtown locals were adamant that the town’s boundaries should not expand to add to the housing supply. “Any changes to the district plan have got to be notified and they’re heavily opposed by the locals. They want to keep it as it is,” he said.
He said that while Bayleys had listings for properties around the $1.6m to $2m price range, agents were also listing a new build four-bedroom place for circa $3.3m at 24B Hertford Street, Arrowtown, a spec build that replaced the old crib.
Harcourts agent Megan Osborne said that there was a lot of local wealth in both Lake Hayes and Arrowtown. “People are upsizing their family home as well as retirees choosing luxury retirement with increased infrastructure and new medical facilities making this more feasible,” she said.
She also cited a shortage of good quality stock in the district, although noted there had been a lift in new listings in recent months.
A four-bedroom home at 24B Hertford Street, in Arrowtown, is up for grabs for around $3m. Photo / Supplied
Regional economist Benje Patterson, who has lived and worked in Arrowtown for the past six years, said that after the “speed wobbles” in the area during Covid, low interest rates fuelled the recovery.
“There was insatiable demand to come and live in the area. We had population growth tipping close to 7 to 8%,” he said, citing sales activity from cashed-up buyers wanting a holiday home and investors looking at rentals or Airbnb.
Patterson said the geography of both suburbs – they are bounded by the lake and/or golf courses – had helped limit supply.
Value growth comes at a cost for local businesses, though. Many had difficulty attracting – and, more importantly, housing – the estimated 1000 workers needed to service the two towns.
The Queenstown Lakes Community Housing Trust, Patterson said, had just launched the first of a hoped-for 68 new affordable homes to be built by 2026, which will house some 10% of the workforce and go some way to alleviating the problems.
He said that demand has now spilled over to Cromwell, 40 minutes to the east of Arrowtown, where there is more land for businesses, industry, and homes.
- Click here to find more properties for sale in Queenstown Lakes
