Queenstown Housing Crisis
Snow, Tourism, Party, just some of the things we think of when Queenstown comes to mind. A place where adrenalin junkies can call home. For the less typical thrill seekers, skiing, luging and catching some sun on the lake front makes for a relaxing holiday. For those of you who would rather have experiences that would terrify your mother, try skydiving, mountain climbing or a bungy jump.
While Queenstown seems like the dream place for many tourists, it is not always the case for those trying to make a living. Rising house prices, we have all heard how unaffordable Auckland has become. Queenstown has now been crowned the most unaffordable place to buy a home, not something to get excited about. Owning a home in the Queenstown Lakes District is looking more like a mere dream, but there are other options for you.
A ski resort town surrounded by stunning mountains and scenery that is home to the world’s most elite and the hottest tourist destination. Sound familiar? Queenstown comes to mind, but I’m talking about Aspen in the Rocky Mountains of Colorado. The similarities are indistinguishable when it comes to tourism and the housing problem. Aspen is a ski resort town that has fell victim to ridiculous house prices that has led to locals being driven away. Average house prices are in the millions and rent is higher than that in Queenstown. Property development has surpassed tourism as the driving industry. Something that Queenstown is heading towards. We can’t allow this to happen because tourism plays a critical role in New Zealand’s economy.
How could one of the most pulsating and unique destinations on earth get caught up in a housing scandal? It is an effect of being one of the most desirable places to live and work in New Zealand. No one would blame anyone for wanting to capture the glorious mountain landscapes that makes Queenstown so striking. Young travellers are drawn to the resort town, often seeking adventure and employment. For those who are mesmerised by Queenstown’s charm, they stomach the brunt of the crisis in trying to find suitable accommodation.
Suitable accommodation is a loose term for young foreigners. For us typical New Zealanders we would expect a room to ourselves, a clean healthy environment and rent that won’t make you break the piggy bank. For many young foreigners living in Queenstown, this would be considered the ultimate luxury. There have been cases of 15-30 people living in one house and yet foreign workers are not deterred. You would expect Queenstown to have economic growth and well-paid workers, right? That’s not quit the case. To make matters worse, the economic growth of the town is making affordable accommodation difficult. You might be surprised to find that the average wage is under $50,000 a year. Not what you would expect in a town that is New Zealand’s top tourist destination.
Queenstown makes a tin of sardines look spacious. Locals are being pushed out of the town because of unaffordable housing and living costs. This is having a flow on effect for other towns like Cromwell and Wanaka which are in high demand. Drive through Queenstown and you will see new houses being built everywhere. But these are not for the young workers or struggling families. Queenstown’s high life attracts the kind of people who fly into the airport with their private jet. Many of the homes are only used a few times a year by these ostentatious home owners. They have no real need to rent out their property. Book a batch is a popular sight where batch owners advertise accommodation for when they are not using it. Still, this is a costly and temporary solution for the many workers who are struggling to find accommodation.
It is no surprise that workers of the new shopping centre out in Frankton are having to live on site. It becomes further complicated when there isn’t accommodation to support the workers that are needed to improve infrastructure and housing.
With over two million visitors a year, businesses that are tourist related are thriving. But what happens if people continue to leave the resort town? Take away all the visitors and you are left with around 30,000 people who actually live there. That’s smaller than Ashburton. With only 15,000 rate payers, there is unprecedented pressure on infrastructure to cope with all the traffic. The New Zealand economy hinges on Queenstown’s success in the tourism industry. There needs to be continued growth in business to enable economic development in the region. If people continue to leave, there won’t be anyone left to support tourism business’s that are expected to double.
How to Beat the Crisis:
If you are some of the lucky few who own a house, there is always the option to renovate. Renovation on your Queenstown home can add significant value without baring the cost of buying a new home. If you like the location you are in, renovating your existing Queenstown home is an attractive prospect. Perhaps you are in a position to buy or build a new home, renovating helps to add value to your existing home while making it attractive for potential buyers. There are of course some disadvantages to consider. You may need to make greater compromises when renovating because of having to work around the existing structure. Unforeseen issues, such as structure, materials and legal requirements, can delay and increase the cost of the renovation. A renovation can cost almost twice as much per square metre than a new build because of these unforeseen circumstances.
Tips to minimise headaches:
- Have the original house plans.
- Make a budget.
- Decide if you are renovating for profit or comfort, you don’t want to over-capitalise.
- Be prepared to alter existing plans/budget as the project progresses.
- Know what you can and can’t do yourself.
- Understand what consents apply to you.
- Find the right Queenstown builder.
- Get a Registered Master Builder and trusted team to do the work.
While there are many things to consider when renovating, it can be a practical solution if you love the location. Renovations can also be an option if you spot a bargain on an older home that has potential.
Building your Home:
Building a new home appeals to many of us, you get to create your own masterpiece while adding a personal touch. Central Queenstown housing is often too expensive, so people have opted to purchase land and build new homes in developments outside of Queenstown. Frankton, Shot Over Country, Lake Hayes Estate, and Jacks Point have experienced substantial growth, being the few locations where flat land is available. If you don’t mind the commute it is a cheaper option. In saying that, ‘cheap’ has a whole different meaning when the average house price in Queenstown in August was $1.90 million. This dramatic price increase has led to many purchasing land and building a new home. Sure, it might not have the million-dollar view but being able to create your own home and be part of the build is very rewarding. There are steps that you can take to ensure that you build a healthy home.
Tips when building a new home:
- Insulation is critical.
- Orientation - what is the best position for your home?
- Energy costs, consider energy efficient appliances.
- Heating - which heat source suits your home and family?
- Plan for delays.
- Construction materials - what suits you and your environment?
See more of our handy tips when it comes to building at ‘10 Things To Consider When Building A House In New Zealand’.
Does Queenstown have a housing crisis?
Yes, ask anyone in Queenstown and they will say the same. The crisis is more to do with lack of supply and increasing population which naturally drives up prices. It certainly seems more affordable to build a new home rather than purchase an old house that has lake views. The JMI construction team have expanded their operations to the Queenstown Lakes District so that we can help with the growing demand in new builds and renovations. We don’t want home ownership to continue to be mere dreams; so we are helping to make it a reality. Housing prices are expected to decrease with new developments and restrictions on lending, opening up opportunities for many.
The more houses the better really, once supply is higher than demand we will start to see housing and rent become more affordable. There is always the option of moving to Cromwell, a 50-minute drive East of Queenstown, where housing is more affordable. But this will only be a solution if people are willing to build or else Cromwell will start to feel the same pressures. It seems as though the only way to not fall victim to extravagant house prices is to build an affordable home.
The Queenstown Lakes District Council has an enormous challenge on their hands to balance growth and accommodation. If the tourism industry takes a turn of the worst we can expect to have a nation-wide issue.
Owning a home in the Queenstown Lakes District can seem unaffordable. We are coming to your aid with affordable high-quality builds and renovations that will ensure you get maximum value.
Be sure to get in contact with us and we will make your challenge our mission.