Wanaka’s growing reputation as a place to visit and live in permanently continues to drive demand in the residential market, while the construction sector struggles to provide sufficient new supply. Sales activity remains solid reflecting ongoing buyer interest at current price levels.
Residential values within the Upper Clutha area, after an extended period of significant increases, are consolidating at elevated levels. The March quarter of 2018 saw the area’s median all but unchanged from a year earlier at $857,500. Over the same period, sales within Wanaka generated a median of $925,000.
Sales activity has stabilised in the Wanaka area, increasing by 2% since the prior December 2017 quarter. A strong economy, low interest rates, a challenged supply backdrop and continued demand are underpinning values at current levels.
Wanaka provides appealing lifestyle benefits with an outdoor adventure playground, a growing café and restaurant scene and a relaxed picturesque environment. The extent of the area’s desirability is reflected by the rapidly expanding permanent population, growing by 8% over the 2017 year, significantly higher than the national population growth rate of 2%.
The Wanaka tourism sector continues to thrive with the number of guest nights showing further growth. Over the 12 months to March 2018 guest nights for both domestic and international tourists reached record highs of 356,000 and 574,000 respectively.
The monthly tourism estimates for regional tourism organisations show the Lake Wanaka Tourism area has experienced the strongest growth across the entire country, with the total annual spend increasing by 22% to $544 million over the year to March 2018.
The past 3 years has seen steady growth in residential prices as reflected in various price bands. Over the 12 months to March 2018, the proportion of sales to occur above $1 million dollars made up close to half of the market compared with the 17% share in 2016. By comparison the number of sales for less than $1 million dollars continued to decrease year on year.
The Upper Clutha area has seen all towns experience a marked increase in value over the 12 months to March 2018. Luggate witnessed the largest value growth of 18%, although it is important to note the low transaction levels may distort the results. Lake Hawea witnessed the second highest value growth of 10%, followed by Albert Town up 8% and Wanaka up 7%.
Market dynamics in the Central Otago/Lakes District remain tight and show the amount of property available to sell continuing to remain at very low levels, significantly below the long term average. At current levels of inventory, the existing stock would sell down in just 21 weeks, just under one third of the long term average.
Over the March 2018 quarter the Queenstown Lakes District experienced an 18% decrease in the number of building consents issued since the December 2017 quarter, although the numbers are still up 7% from the same period a year earlier. A more restrictive and tighter credit landscape is seeing development slow. A noticeable increase in multi-unit dwellings is evident, making up 40% of all consents issued over the March 2018 quarter.
Section prices in Wanaka surged over the March 2018 quarter reaching a record median value of $610,000. Sales activity for sections has however decreased significantly with just 13 sales recorded over Q1 2018, down 60% from the same period a year earlier. Agency feedback suggests that activity remains at high levels however this is not currently reflected in sales statistics due to the delay in the issuance of Certificates of Title.
Wanaka Hot Spot Map – 6 Months to March 2018