Press Release - 5 July 2007

With such a strong transient work force, increasing interest rates, continued growth in property values, home affordability is an ongoing point of discussion in the Wakatipu region. 

Will owning your own home in Queenstown become more difficult if not impossible for new entrants to achieve?

MAC Property has recently completed a study of home affordability in the Wakatipu Basin selecting dwellings sales in Lake Hayes Estate and unit sales in the Fernhill / Sunshine Bay as target areas. They have also compared the median house sale price and median household incomes of the Queenstown Lakes District with the National medians and the medians of a number of other centres around New Zealand.

With a Queenstown Lakes District April median dwelling sale price of $529,500, a purchaser utilising 100% financing will be spending 75% of their median gross household income on debt servicing.

This points to renting as a much more affordable option, although some rental growth could be expected as demand increases and landlords seek to re-coop rising interest costs. Rental levels have not increased substantially in the past five years and are low in comparison to the cost of purchasing and owning.

If rental returns remain low, there will be no incentive for investors to build or purchase new property for rental investment purposes and thus restricting supply. This means it is becoming more difficult for single income families to purchase even the cheapest family dwelling or unit in the Wakatipu Basin.

If you wish to obtain more information on the above please contact Doug Reid

Click here to view the detailed analaysis.