Confidence levels in Queenstown's real estate sector as a lifestyle and holiday home destination are to be robustly tested for the first time since the recession began - with one of the biggest residential property auctions the town has ever experienced.
Some 20 homes, apartments and bare section plots in and around the Queenstown Basin have been placed up for sale in a one day auction taking place on May 3.
The offerings range from a one-bedroom apartment in the centre of town, through to comfortable three-bedroom suburban dwellings, right up to enormous partly developed landholdings on the outskirts of town.
The auction campaign is being coordinated by Bayleys Queenstown and has already drawn close interest from not only potential buyers, but also land valuers, accountants, and the town's legal fraternity which manages scores of medium-sized investment and trust funds on behalf of private clients.
Bayleys Queenstown director David Murray said the sheer diversity of the auction portfolio would benchmark property values in the town as the market headed into the winter season which normally attracted buying interest from Australian holiday-makers in town to ski.
"Previously, real estate agencies, including ours, have tended to theme auction days around one particular segment of the market - such as just bare land, or just apartments, or just stand-alone residences. This portfolio has taken an 'umbrella' approach to the greater market, so at the end of the process we will be able to get a much more comprehensive picture of buyer confidence across the board," Mr Murray said.
"There are a number of motivating factors behind the sale of these properties. These include overseas owners - particularly Australians - who have used the properties for winter holiday homes in a ski destination for several years but who are now looking for a new location.
"There are also a considerable number of local owner/occupier residents moving for no particular reason other than a change in personal circumstances. And finally, there are several New Zealand property investors who have felt the financial effects of the Government's removal of tax incentives on residential property ownership last year, and are simply wanting to exit the property market and find alternative investment opportunities.
"For example, we have one client selling now so he is cashed up and in a position to buy shares in one of the state-owned electricity generators when that share offering comes to market later in the year.
"The one thing they have in common is that our clients are all vendors who are serious about achieving a sale on the day'," Mr Murray said.
With 20 properties up for offer on May 3, the latest Bayleys Queenstown auction portfolio easily surpasses the 2010 auction sale of 13 upmarket apartments in the Pounamu Prime and Bowen View complexes.
Mr Murray said there were only two mortgagee auctions in the current portfolio - a 900 square metre residential section on the way into town from the airport and a multi-dwelling zoned 8590 square metre site at Jacks Point Golfing Resort development.
"This is a far cry from several years ago when mortgagee and receivership offerings were a virtual monthly occurrence as developers and their financiers went 'to the wall'," he said.
"The solidity of this portfolio shows there is now considerably more 'spine' in the property market, and while we are certainly a long way off any boom, the property cycle has definitely turned and is entering a new phase where prices will be firming, albeit on lower sales volumes."
Mr Murray said that as a secondary home location, property prices in Queenstown had been relatively stagnant for the past three to four years - with many holiday home owners forced to quit their holdings in order to consolidate debt on their primary residence or refinance their businesses.
"We are starting to see that trend loosen up as Aucklanders once again begin returning here for their skiing holidays, combined with renewed interest out of Southland's rural sector which for the past 24 months has seen many farmers paying down their debt levels. Those farmers, particularly those within a two-hours driving radius, are now once again looking for holiday homes in and around Queenstown," Mr Murray said.
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