Newcomers, investors and holiday makers fuel Wanaka property market
While the population of Wanaka is small, at just over 7,000 residents, it has almost doubled since the 1996 census count of 3,618, according to Statistics New Zealand (StatsNZ.). This is well above the national population growth rate of 11% between 1996 and 2006.
The number of occupied dwellings in Wanaka, which now stands at 3,003, has increased at a high rate as well, with 48.1% more dwellings in 2006 than in 2001, according to StatsNZ.
As a result of the increase in population over the last five years and the demand for property in the area from holiday makers and investors, Wanaka has experienced strong upward pressure on residential prices, with a median now well above the national median sale price for residential dwellings. According to the Real Estate Institute of New Zealand (REINZ) statistics, Wanaka recorded a December quarter 2007 median sale price of $560,000, up just slightly on the same quarter in 2006 but 22.2% from $458,300 in the December 2005 quarter.
The latest December quarter has shown an increase in the number of transactions following a slight drop off in the September quarter, although this is based on provisional figures. The average number of days to sell a property in Wanaka increased in the same quarter, but remains historically low. This suggests that there are still plenty of interested parties on the buying side, but the number of properties being brought to market is low, says Bayleys Research in its latest overview of the Wanaka market.
The top end of Wanaka’s residential property market has experienced phenomenal growth in median sale price since the turn of the century. The median sale price for the top 15% of residential dwellings, measured by Bayleys Research by sale price value, stood at $1.275 million for the second half of 2007, based on provisional data from REINZ. This is exceptionally high and almost three times the median price for a top end dwelling in the six months ending December 2000, says Sarah Davidson, Bayleys Research analyst.
“This high-end residential market is typically unpredictable, characterised by a low number of sales which tends to skew the median sale price. However, the trend line shows the rate at which the prestige end of the market is growing is very strong. “
Bayleys Wanaka branch manger Mat Andrews says their have been some outstanding homes built in Wanaka in recent years
“The architectural and building quality of the best homes in Wanaka is right up there with the top houses not only in New Zealand but internationally and when you combine this with the magnificent lake and mountainside location that Wanaka offers, it’s not hard to see why people are wiling to pay a premium for this.
“Whereas Queenstown has become too commercialised and over developed for the liking of some people, Wanaka has also retained much of its small town charm and this is also attracting local, national and international buyers. People from outside the area are still mainly buying holiday or investment property here but we are seeing an increasing number of people wanting to life in Wanaka permanently as well.”
The Queenstown Lakes District Council (QLDC) expects the current population of Wanaka to grow to over 14,500 residents by 2026 and the number of daily visitors to increase from 2006’s 5,000 people per day to 11,000 per day in 2026.
Wanaka’s popularity has been driven by the area’s picturesque setting, located on the shores of Lake Wanaka. Not surprisingly then, the median sale price for lifestyle properties in Wanaka has been on a rapid growth path for the last seven years. The 2007 provisional median sale price for Wanaka lifestyle property is $580,000, while at the end of 2006 the median sale price for lifestyle property was $409,000. The 2007 result is 280% higher than the median recorded in 2001, according to latest statistics from REINZ.
The annual transaction count has been low over recent years following a peak in 2003 when the number of lifestyle properties sold was 105. In 2003 a number of significant developments, including Camphill Estate, were released to the market boosting the opportunity for purchasers to acquire sections in the area and hence the volume of sales over the year increased significantly. With fewer sections being released to the market in 2004, the median sale price was driven up 49% over the year.
QLDC’s current policy for managing its strong population growth, while maintaining the area’s natural assets which is a compelling reason for people to move to or visit the district, is to avoid the expansion of settlements into surrounding rural areas and to restrict lifestyle subdivisions. Mat Andrews says this has restricted the supply of lifestyle sections to the market and consequently put pressure on prices.
For more information contact Mat Andrews, Bayleys Wanaka, ph 03 443 5330 or 027 483 6261 or email mat.andrews@bayleys.co.nz
