Optimism returning to property market
Queenstown's property market looks set for another upswing, but it might be more sustainable this time around.
The white-hot housing market, which saw buyers fighting to grab anything up sale, lost some of its temperature in recent years, as high interest rates, the cost of living crisis, and global uncertainty finally started to bite.
And that's continued into 2025, with buyers now adopt a “wait and see” approach before committing to a sale or purchase.
They have the negotiating advantage and are taking longer to commit, assessing the multitude of options, and displaying high price sensitivity, according to Colliers annual Otago Property Market Review & Outlook published last week.
But, despite that, prices remain high in this ever-popular town, and there are now signs both supply and demand will increase, bringing more balance to the market.
"The property market appears to have turned a corner with stabilised interest rates, improving investment confidence, and cautious optimism in the market,” Heather Beard, Director of Valuation at Colliers Otago, says.
"Furthermore, we are starting to see more activity from developers re-entering the market, which bodes well for residential opportunities in Queenstown as supply has been a longstanding challenge for the area to ensure enough accommodation is available for workers.
"We await to see the impact of the Government’s announcement of the ‘Golden Visa’, which may contribute to buyer interest in the high-end residential market across the wider region."
First-home buyers continue to be the dominant market segment, with properties under $1.5m in strong demand.
Newer, entry-level suburbs like Fernhill, Sunshine Bay, Hanley’s Farm, Shotover Country and Frankton have continued to see good demand for listings. A three-bedroom home in Hanley’s Farm that sold for $1.165 million in 2021 resold in late 2024 for $1.568m—an annualised growth rate of nearly 9%.
Numerous townhouse developments are also being marketed for sale that aim to meet the needs of the sub-$1.5m first-home buyer market, including the 226 Five Mile Villas, 39 Kawarau Villas, and 68 Lakehouse Villas, all in Frankton.
Sections too remain sought-after, with a shortage of titled, flat, entry-level land in Queenstown.
The final Hanley’s Farm sections were sold in February 2025 with prices ranging from $1,000sqm for larger lots to $1,400 for smaller sites. Sites at neighbouring Park Ridge subdivision were released the same month with prices from $1,394sqm to $1,566sqm for a 371-square-metre site.
The report notes there are also around 6000 homes in Fast-Track Approvals Act developments.
On the rental front, prices are softening slightly. Queenstown’s median weekly rent for a three-bedroom home is now $983, down from $975 last July - not a huge drop, but a sign that supply is starting to catch up, helped by all those new home-and-income builds in places like Hanley’s Farm.
The report also covers residential, commercial and industrial property across Otago, and is available on the Colliers Otago website, colliersotago.co.nz
