Growth in Queenstown market set to continue
Queenstown is in the upswing of a property cycle.
The Queenstown property market’s growth and expansion is expected to continue for at least the next two to three years, propelled by a range of factors including construction activity and tourism growth, according to a new report from Colliers International.
Commenting on this key finding of Colliers’ 2015 Queenstown property market review and outlook report, John Scobie, valuation director at Colliers International’s Queenstown office, says several strong tailwinds are fanning the property market’s sails in the resort town.
“Residential construction activity, tourism growth, commercial development at Frankton Flats and increased investor confidence have all come together to boost the local property market. As a result we’re seeing solid expansion across the key sectors.”
The Queenstown property market is now comfortably in the “upswing” part of the cycle and is expected to remain so for an extended period, Scobie says.
“The extended availability of low borrowing rates will keep the market in an expansion phase for longer. The town’s tourism boom and a fresh wave of residential and commercial construction activity will also help hold the market in this part of the cycle for at least the next two to three years.”
Colliers estimates the total value of commercial construction projects either underway or planned to commence in 2015 will exceed $250m.
“Once complete, these projects could provide a further 700 to 800 jobs – it creates a pretty positive business environment. This is without taking any residential development activity into account.. Added to this are the latest tourism and residential population growth projections, which help increase confidence in the town across the board,” says Scobie.
Annual visitor guest nights are up 9.6 per cent for the year ending January 2015, and the town’s peak population of 96,500 in 2015 is expected to rise to 115,500 by 2025.
“Statistics like these are giving developers and investors the confidence to press ahead with a number of key property projects, including the Shotover Country housing subdivision and the Frankton Flats commercial hub.”
A number of significant projects are underway at Frankton Flats, Scobie says. “Development is now in full swing following the resolution of most of the planning issues that have been holding back development over the past six years on the northern side of the airport runway. Significant roading and infrastructure development is also underway, including new highway construction, two roundabouts and stage one of the Eastern Arterial Access Road.”
The Frankton Flats area encompasses some 270ha of land which will provide for the bulk of future commercial and industrial expansion for the Queenstown area going forward.
Major developments in the area include:
- Remarkables Park: 25,000sq m of commercial mixed use development already established. Projects underway or in planning stages include The Landing retail centre, Ramada Hotel and a conference centre.
- Queenstown Central: 23ha of mixed use-zoned land providing potential for retail and commercial space and 600 residential units.
- Five Mile Stage one: around 15,000sq m of building area is nearing completion, with various national tenants including Rebel Sport, Briscoes, Countdown, Warehouse Stationery, Dick Smith, Number One Shoes, ANZ and Supercheap Auto. Stage two (13,000sq m) is now in planning.
- Shotover Park: release of industrial titles following PC19 due mid to late 2015.
- Queenstown International Airport: A 570sq m extension is being built on the northeast corner of the terminal. As well as increasing the size of domestic and international departure lounges, it will add additional security screening lanes and immigration booths (around $12m).
In the central business district, a scarcity of prime property is resulting in low sale yields. Ground floor retail vacancy in the Queenstown CBD is at zero. This is spurring on some new retail property developments,
Colliers International’s latest commercial property investor confidence survey shows Queenstown investors are the most upbeat in the country when it comes to the outlook for commercial property investment.
“Clearly the market is in excellent shape and has a solid base for growth through the rest of this cycle and into the future,” says Scobie.
Colliers’ overall projections for 2015 include:
- Property market growth and expansion in Queenstown expected to continue for at least the next two to three years.
- Queenstown’s ongoing housing shortage will result in significant price gains..
- Acute shortage of long term residential rental accommodation in Queenstown to continue, flowing through to rent increases.
- Shortage of tourist accommodation in Queenstown, with the town at capacity over peak periods.
- Shortage of tourist accommodation worsening, resulting in increasing room rates..
New hotel developments becoming increasingly viable.
The report can be downloaded from: