NZ's top-priced property sale for 2019: Local council paid 2.4 times own valuation

516 Ladies Mile, Lake Hayes. Photo / Sotheby's International Realty

In setting this year's top residential or lifestyle property sale price, the Queenstown Lakes District Council paid 2.4 times over the valuation listed on its own website.

The council's rating information showed a valuation of $6.4m for 516 Frankton-Ladies Mile Highway yet it paid $15.5m for that same site.

The valuation listed had no relevance to the true worth, it indicated.

"Rateable valuations are broadly-based assessments. They are not necessarily indicative of the current market value of large development blocks," a council spokesman said.

The council valuation shows the land was valued at $3.6m and the five-bedroom, 440sq m copper-roofed house and pool at $2.81m.

The council hasn't yet announced in any detail what it plans to do with the property.

Nick Goodall and Kelvin Davidson of property data and analysis business CoreLogic said the 2019 property record for a residential or lifestyle property was the $15.5 million sale of 516 Frankton-Ladies Mile Highway, a 14.6ha site with one house in the Wakatipu Basin.

"We're seeing the most expensive sale for the year and nothing higher than $15.5m has been sold so far in 2019," Davidson said this month.

Agents Sotheby's International Realty recorded the sale on April 18.

In May, the council confirmed it had bought the significant site but it only announced a price at $13.78m, thought not to include GST.

CoreLogic's Davidson said: "It looks a prime site for new housing so if that was the case, it wouldn't be uncommon to pay above valuation. The valuation was as at July 1, 2017, so not totally out of date yet – and in any case, the CV is just a guide, and when it was done could easily have been prepared on the basis that the site would stay the way it was. Potential for redevelopment changes the game quite a lot."

Mayor Jim Boult has said previously that potential future uses of the land could include community facilities, such as sports fields and open parks, partial use for a transport hub or park-and-ride facility.

Boult has long supported a bed tax to fund tourism infrastructure and development, saying a district of just 20,000 residents can't sustain support for an annual tourist influx of three million.

The council said the land also had the potential for education purposes, for example, a new primary or high school.

"As the largest population centre in the wider Wakatipu, the need for some form of community and recreation hub in the Lake Hayes Estate/Shotover Country area is obvious.

"Opportunities like this to purchase large areas of flat land are rare and this 14ha site has the potential to offer a number of valuable community uses,'' Boult said earlier this year.

704 Malaghans Rd, Speargrass Flat. Photo / supplied

A council spokesman said this month no definite plans could yet be revealed.

"The council is currently progressing development designs for the site and is working through future use options, including a potential community building, sports fields and transport infrastructure."

The settlement did not occur until July 16, he said.

"The council is currently seeking a resource consent for interim informal public recreation of the site," he said, citing running, walking, informal sport, picnicking and dog walking.

"The council is still in the early stages of development planning and intends to consult with the community about future potential uses as the development plans progress."

The council bought a property near Lake Hayes. Photo / supplied

CoreLogic has previously announced other top-priced residential deals this year including:

• The transfer of a $13.9m "stunning hidden getaway" near Arrowtown, at 704 Malaghans Rd, Speargrass Flat, when owner Tim Roberts transferred the property out of his own name and into his company, Malaghans 704;
• Around $12m, the sale of 205 Church Bay Rd, Te Rere Cove, Waiheke Island by David Parkinson and Dee Crawford to financier Martyn Reesby;
• $12m for 20 Omaha Block Access Rd, Leigh: Carmel and Hugh Fisher's Panetiki bought the headland from the J R Courtenay Trustee Co;
• $10.5m, 27 Hanene St, St Heliers: Michael John Reid and Pauline Mary Reid bought this place in May;
• $10.2m, 14 Aumoe Ave, St Heliers: Douglas Colin Brooker, Anna Margaret Brooker and Lasbrook Trustees bought this place on June 28.

The 13.9ha Te Rere Cove, Church Bay, Waiheke Island. Photo / Brett Phibbs

David Fea of Sotheby's marketed the Frankton-Ladies Mile property.

Mark Harris, Sotheby's managing director, said this week he was unsure if he could discuss details but when told the agency had set 2019's record, said: "Thank you. We didn't know it was a record. That's good to know. We also completed the highest residential house sale of the year in Queenstown so far which was confidential but above $8m, and recently another large sale for $11m in Tauranga. All were to Kiwi purchasers."

Fea advertised it as "a renowned and admired Queenstown property with significant development opportunity." The property had a 600m frontage to the main highway from Frankton to Lake Hayes, is a minute's drive from Lake Hayes and five minutes from Frankton.

The rural lifestyle place was in a significant location and provided an opportunity for an astute investor, he said. It was "offered to the market for the first time in 30 years. The seller has decided to relocate elsewhere so her cherished property must be sold."

Housing, a retirement village, education or innovation, private school, private lodge/resort, equestrian centre, deer farm, commercial winery/cheesery, artisan gallery or tourism activities were cited in the ad earlier this year.

OneRoof editor Owen Vaughan said: "It's no surprise that the big sales so far this year are in Queenstown and prime waterfront Auckland. The top end of the market has not really strayed from these locations and is unlikely to in the near future, with the foreign buyer ban removing any pressure on domestic buyers to seek luxury properties outside these markets."

Land, location and development opportunities are still the most valuable components of these transactions, even though the houses themselves may not seem to be worth the record amounts exchanged, Vaughan said.

Property records show previous owners of 516 Frankton-Ladies Mile as Janice Catherine Walker and Sonya Jane Walker.

This year's top commercial sale was by Mansons TCLM of a freehold site with an almost-finished multi-level office block at 155 Fanshawe St for $247m to an overseas pension fund.