Luxury NZ south island property lures cashed up Aussie buyers

Direct daily flights into Queenstown from Sydney, Melbourne and Brisbane as well as a ‘life’s too short’ mentality are fuelling strong interest for high-end NZ homes from cashed-up Australians.

16 Advance Terrace. Picture: Supplied

A “life’s too short” mentality is fuelling strong interest from wealthy Australians and Auck­landers buying high-end residential real estate in New Zealand’s Queenstown-Lakes District.

About $NZ815m has changed hands in houses and apartments valued at more than $NZ3m on the South Island over the past two years.

Luxury Real Estate director Terry Spice says that since the Covid pandemic, demand has been unprecedented, especially from Auckland buyers permanently moving south or buying a holiday home in and around Queenstown and Arrowtown.

There’s also growing interest from Australians, given direct daily flights into Queenstown from Sydney, Melbourne and Brisbane.

“In the past three or so years, we’ve really noticed a shift among high-net-worth clients who are keen to take advantage of lifestyle opportunities and are adopting a ‘life’s too short’ mentality,” the Arrowtown-based Snow says.

Luxury Real Estate co-director Nick Horton say: “We find that a lot of our Auckland or North Island clients start with holiday homes in the area and then find that they want to shift here permanently.

“In terms of the Australian market, the feedback we’re receiving is that they favour residential transactions in New Zealand because there’s no stamp duty, and low capital gains tax thresholds.

“Demand for luxury property in the Queenstown-Lakes District has risen significantly across the last decade, with noticeable spikes in 2018 when the market had fully emerged from the impact of the GFC and again in 2021 after the pandemic.

“Again, after last year’s election, inquiry on premium property increased, with further impact anticipated with the stabilisation and likely reductions in interest rates this year, combining with the high costs of renting locally making buying an attractive option as a holiday home or permanent residence.”

Horton says high demand for luxury holiday rentals has fuelled investment from buyers aiming on a long-term move to the area, with the strong income ­potential providing the solution to holding a property until a move was made.

Spice cites one of his Brisbane clients who first bought land above Lake Wakatipu in 2014 and built a premium holiday home so they could escape Queensland’s hot summers. They subsequently sold that property and are constructing a “best of the best” home in the Dalefield area.

The home at 2 Ayrshire Lane, Dalefield in Queenstown.

“They say buying and selling here is much more straightforward,” Spice says. “They love the Queenstown-Lakes District and have real confidence in its future as both an investment destination and an exceptional place to live.”

REINZ figures show that last year there were 70 house sales and seven landholdings sold above $3m. It’s a stark contrast with a decade ago, when only 12 houses changed hands for $3m-plus.

Horton says Queenstown used to be viewed as the backpacker adventure capital, but the socio-economic landscape is radically changing. He says Covid highlighted the importance of moving away from Queenstown’s traditional economic reliance on tourism.

“Queenstown Lakes District Council is keen to encourage a more diverse economy so that it is less vulnerable to external shocks and there are a wider mix of career options to attract profession­als,” Horton says. “This will involve ­facilitating and connecting entrepreneurs, business leaders and industry specialists to create new opportunities.

“Some of Queenstown’s resident population is pushing out to Cromwell, Alexandra and Wan­aka, all of which are seeing population increases.”

Gentrification is already well advanced across the district, with the likes of the new hospitality precinct Ayrburn, 3km from Arrowtown, a huge drawcard. While more than half the development is now open and receiving rave reviews, another five venues are still under construction.

Views from Elms Penthouse, Arrowtown Lake-Hayes Road at Queenstown.

Ayrburn will ultimately feature 11 bars and restaurants, an up-market retirement village, Northbrook, a boutique hotel, wedding venues, a florist, and bakery.

“Away from the bustle of Queenstown, Arrowtown and its rural surrounds have really come into their own,” Spice says.

“Buyers are attracted by the peaceful village atmosphere, the quality boutiques and eateries and the nearby lifestyle amenities such as the cycle trails, golf courses and day spas. There’s a really vibrant feel to Arrowtown, which is appealing to investors.”

Indeed, some Arrowtown residents believe Ayrburn is helping lift Arrowtown prices.

Improvements in health facilities have also helped attract new residents to the wider district, with the likes of the new private Southern Cross Hospital at Kawarau Park, and continuing development of the busy Frankton retail hub.

Horton adds that there’s a lot of optimism about the future of the district, and the investment in infrastructure and development underpin significant confidence in Queenstown as a place to own property.