At last, the Government has recognised the strains which five years of phenomenal population and metropolitan boundary growth in and around Queenstown have caused on the region’s infrastructure services.
Housing and Urban Development Minister Phil Twyford last month announced the granting of a $24 million, 10-year interest-free loan to Queenstown Lakes District Council to support major infrastructure projects around Ladies Mile at the entranceway to Queenstown.
It’s a gesture which is to be applauded. And we’re hoping there’s more to come from the Housing Infrastructure Fund (HIF).
The Housing Investment Fund investment is the start of a staged investment by the Queenstown Lakes District Council, Otago Regional Council and the New Zealand Transport Authority to manage the growing traffic pressures on State Highway 6.
The now fast-tracked infrastructure project to be underpinned by the funding include wastewater mains and a pump station, water supply reservoir and mains, a new roundabout on SH6, a pedestrian and cycle underpass, and bus stops.
The funding brings forward the development of around 1,100 houses by six years - with the first houses expected in 2020.
The Ladies Mile funding announcement follows the earlier notification of $52 million in HIF funding to enable the building of 1,850 houses in Kingston, and at new greenfield sites adjacent to Quail Rise on the Frankton Flats.
The latest announcement for Queenstown’s Ladies Mile will provide further support for the Frankton commercial centre and surrounding development.
In Kingston, the HIF budget will be used to build new water supply and sewage treatment plants, along with storm water network infrastructure for the existing town and new development. The first of 950 new houses in the suburb are expected to come on stream in 2020.
Across at Quail Rise South on the Frankton Flats, the HIF subsidy will bring forward housing construction by seven years, sustained by new infrastructure which will include a reservoir and water mains, a gravity wastewater main, bus stops, and a pedestrian underpass to the Frankton Flats commercial area.
These three developments at Ladies Mile, Kingston, and Quail Rise, will substantially boost Queenstown Lakes District Council’s ability to address the town’s increasing housing supply and affordability issues caused by huge demand from not only the resident population, but also seasonal and short-term workers and visitors.
Over the coming decade this investment in infrastructure through HIF funding will bring forward the construction of around 3,000 homes. The investment is well justified - with medium rents now more than $600 per week and house values rising seven per cent over the last year.
Councils in high growth areas such as Queenstown are keen to progress housing developments, particularly for affordable housing, and funding towards infrastructure to support those developments will go a long way to ease pressures on councils.
However, while these developments will bring new housing stock to the Queenstown market in the long-term, we know that hundreds of home buyers are in the market looking for new homes right now.
Of more immediacy, latest data out this month from the Real Estate Institute of New Zealand shows that median house prices in the Queenstown-Lakes District are up 9.64 per cent on the same time last year – rising from $850,000 in August 2017 to $932,000 in August 2018.
The Real Estate Institute of New Zealand Queenstown residential property market commentary notes: “Spring is on its way and this time last year the election was looming, and there was uncertainty around this, so hopefully this spring we will go back to a more active spring which is more the norm.”
Higher first-home borrowing limits for Queenstown announced too...
Timely then that the Government also announced last month that house price buying limits for the Queenstown Lakes region will be increased to enable more first-home buyers to get on to the property ladder.
The new caps will see the HomeStart and Welcome Home Loan house price brackets for the area increased to $600,000 for existing homes and $650,000 for new builds.
Acknowledging that Queenstown Lakes District had the highest median house price in New Zealand, Housing and Urban Development Minister Phil Twyford said it made obvious sense that our province should now also have the highest HomeStart house price cap to give buyers a fair chance at accessing the grant.
The real estate sector in town agrees that the previous HomeStart price caps of $500,000 for existing homes and $550,000 for new builds meant it was virtually impossible for first-home buyers to access the grants - with only seven percent of all house sales in Queenstown Lakes registered below $550,000 in the year to March 2018.
It was heartening to see that our housing affordability issue was not made a political football. The new pricing levels for homes in the Queenstown Lakes District come into effect from September 17.
In the meantime, going some way toward helping meet the supply matrix of the home-buying equation, Bayleys Queenstown is proud to bring you the latest edition of Preview magazine – showcasing homes and sections available to buy right now.
We trust you will enjoy perusing the best of Queenstown’s residential property market currently available for sale. And should any of the properties showcased in this issue of Preview magazine pique your interest, of course feel free to contact the Bayleys team member responsible for marketing the property.
Until next time,
Managing Director, Bayleys Queenstown.