Heading for the hills

Queenstown continues to be a property hot spot, and with the market having settled down from the frenzy of the past few years, now could be the time to buy.

The mountain magic of Queenstown is one of those places people go to on holiday and never want to leave.

It has made the Central Otago town one of the country's property hot spots for many years, and not just for New Zealanders.

But it may be a good time for local buyers to start looking there again. Following a property expo in Auckland last week, real estate agent Cathy Campbell from Queenstown's Belle Property says the high exchange rate means some overseas investors are staying away.

"It seems to be a normal market now. Over the past few years it got very heated, but buyers are no longer in such a rush to purchase," Campbell says.

The figures dug out by independent resource queenstownproperty.com would seem to bear that out.

During the past six months there were 461 residential sales in the Queenstown area, compared with 528 for the same period last year.

While the time it took to sell a house remained about the same, bare lots took longer to move.

The median house price for the past two months was $510,000, although the presence of a couple of million-dollar-plus sales pushed the number up.

Over the past six months the median sale price averaged $448,300 for houses and $232,050 for vacant lots.

Wakatipu Real Estate Institute branch president Richard Newman says there are still plenty of buyers about, but some sellers had unrealistic expectations about how much they could sell their property for.

Campbell says while you can still get a 400m section with a lake view for $200,000, larger sections and lifestyle blocks can go for up to $2 million.

A three-bedroom, two-bathroom apartment near the town centre might cost around $500,000, while a family home could be around $700,000 to $800,000.

The most expensive property on Belle's books is part of a residential development on Closeburn Station. For just $6.5 million you can have a luxuriously finished home, a guest cottage, large vehicle barn and office on a 5000sq m section.

If Queenstown is too pricey, surrounding districts may be affordable.

Sandra Clark moved from Auckland to manage Queenstown-based television production house Great Southern Television.

After her initial dream of building a property lost out to the reality of section and building costs - significantly more expensive than building in Auckland - she bought what had been a holiday home in Arrowtown.

"It is in the old part of town, and it harks back to when I grew up on the fringe of Christchurch, riding my bike to school, going down to skip stones in the river, friendly neighbours and the feeling you can leave the door unlocked. It's the sort of environment I want to bring up my son in," Clark says.

"Our offices are in Daleford, halfway between Arrowtown and Queenstown, so my commute is 20 gorgeous minutes looking at Coronet Peak, not half an hour on the Northwest Motorway. The only traffic jams are when there is stock on the road, which is great for my three-year-old son."

Most areas are on sewerage schemes, although some smaller communities along the lake, including Kinloch and Glenorchy, are still on septic tanks.

Median rates are between $1200 to $1400 a year.

Belle sales director Julian Brown says it's an area that attracts people willing to buy top-end properties or lifestyle blocks.

"We see a lot of people from Auckland come here as a lifestyle destination. People want somewhere to holiday in or to move to in the future," Brown says.

Many Sydney, Melbourne and Brisbane residents also look to Queenstown for holiday homes or a lifestyle shift.

Brown says while six months ago builders were hard to come buy, they are now starting to free up, an indication some of the activity is coming off the boil.

Destination Queenstown chief executive David Kennedy says between 1999 and 2002 Queenstown land values doubled and the capital value of improvements increased 60 per cent.

"The driving factors for our growth are more air access. People can now live anywhere in New Zealand and do business," Kennedy says.

There are four direct flights from Auckland daily, and two a week from Sydney, going up to nine a week across the Tasman during the winter ski season.

"Uniquely for New Zealand, Queenstown is on the international property market, with 15 per cent of ownership international. To a large extent it was always like that," Kennedy says.

He says the filming of parts of Lord of the Rings in the region helped push the profile of Queenstown.

It brought another benefit, high speed broadband pipes, which make it easier to run a business from the town.

Tourism is now a year-round activity, although there are summer and winter peaks. The Tourism Research Council estimates visitor guest nights will grow almost 50 per cent by the end of the decade to about 2.1 million visitor nights a year.

While selling points may be the fishing, skiing, outdoors lifestyle and tourist activities - or the peace and quiet of the region - Kennedy says there is a simpler reason people come.

"The most common comment we get is the beauty. The first and foremost reason people come here is for scenery, and that is also a key reason people choose to live here."