Central Otago property record

Media Release August 27, 2008

Dairying and the dollar push Central Otago property record

The dairying boom and the exchange rate are driving demand for higher end properties in Central Otago, pushing median prices in the area to record levels, First National says.

First National New Zealand general manager John Stewart noted July’s median price for Central Otago (excluding Queenstown) of $497,500 was a record for the area. Three years ago the median was bobbing around the $300,000 mark.

“While low volumes and some high priced sales in July put the median price significantly higher than June, our agents in Wanaka, Cromwell and Alexandra have watched prices climb steadily over the past three years and particularly the past 18 months.

“Strongest demand is coming from two main areas at present – people who have sold land to the dairy industry and are moving into the area wanting upmarket properties; and buyers from Australia and the United Kingdom wanting holiday homes and appreciating the Kiwi exchange rate.”

Demand for lifestyle blocks was strongest around Alexandra and Omakau. Around Wanaka, high value homes had been selling well, around 40% of customers were looking to build and there were virtually no sections for sale under $300,000.

“In Wanaka, 18 months ago the number of sales over $1.5million were few and far between,” Mr Stewart said.

“Property owners there don’t seem to trade as often as in Queenstown. But now we are seeing a consistent stream of properties selling for over $2million.

“One couple who had sold their land for dairying found a house they liked that the owners had bought for around $1.3million a year ago. It wasn’t for sale, but the couple wanted it so badly they kept offering more and bought it recently for $2.5million.

“Another couple couldn’t decide which $400,000 section they wanted so they bought two.

“There’s been a lot of Australians coming to buy holiday homes and investments and we are currently getting more enquiries from the UK.

“It seems that a lot of people are discovering Central Otago.”

First National Alexandra principal Anne Kinnaird, who is the Alexandra spokesperson for the Lakes District Real Estate Institute Committee, said many of their buyers were retiring farmers from Southland.

“Alexandra is a popular holiday spot. For these people, they have been coming here for years for holidays and now they come to retire here. Our climate is great, the views are gorgeous, and it’s a wonderful place to live.”

Demand had been such that upmarket lifestyle properties were now hard to come by and agents were on the lookout for fresh listings.

First National Cromwell principal Henry van der Velden , who is the Cromwell spokesperson for the Lakes District Real Estate Institute Committee, said the horticultural, viticultural and industrial sectors in Cromwell were doing the best at present. Residential houses and sections were starting to increase from the lows of the winter.

“Confidence is definitely still there as building consents both in number and value are higher than levels two years ago.”

Building consents for the whole Central Otago area (excluding Queenstown) were at 68 in the period July 05/06 (valued at $6.7m), 82 for July 06/07 (valued at $7.9m) and 77 for July 07/08 (valued at $7.4m).

ENDS

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