Queenstown sections in strong demand

Press, 3 July 1985, Page 29

Queenstown sections in strong demand

From

SUE FEA,

in Queenstown Pre-selling of sections in Queenstown has become common. The average section price is about $60,000 and it appears that preselling is the only way many buyers can enter the market. Demand for land in the area is still high and about 360 sections are “in the pipeline,” expected to be completely serviced and developed in a series of seven subdivisions by the end of 1986. Only those subdivisions have been granted the necessary scheme plan approvals, but it is thought that still more subdivisions are being planned. A number of those 360 sections set down for the end of next year have either already been sold or will have been sold by then. Preselling means a buyer has to pay only about a $5OOO deposit on a $50,000 section until the title is issued. Some sections are being sold many months before title is issued and in some cases again before settlement date. However, a Real Estate Institute spokesman in Queenstown, Mr Bob Robertson, says some investors who have bought through pre-selling now face settlement amid very high interest rates. Group investors, especially from Canterbury,

Otago, and Southland, were getting together and pooling their money to invest in Queenstown land, he said. Many Southland fanners were showing interest in the larger sections at Kelvin Heights. Not many sections were available right in Queenstown itself at the moment, Mr Robertson said. Section prices started about $45,000 for Frankton, between $60,000 and $70,000 at Kelvin Heights, and about $130,000 for a lakefront section there. They were between $50,000 and $70,000 at Fernhill and Sunshine Bay and about $60,000 on average in the Commonage subdivision on Queenstown Hill, Mr Robertson said. Prices had probably “plateaued” somewhat since Christmas, but Queenstown was one of the biggest growth areas in the South Island and the demand was still there for land and property. Queenstown was a “cashed up place” with high equity, he said. The demand would continue as developers arrived from out of town and bought up property in which to house their workforce. Mr Robertson predicts a chaotic effect on the market from the pressures of the T.H.C.’s new hotel development in Queenstown, when construction begins. A second ski-field in the

area, the new Remarkables ski area, due to open next week, would also increase demand, he said. Mr Robertson believed all the sections coming on stream will sell provided they do not all come on the market too quickly. Of the 360 approved sections, more than 60 are part of Fernhill Developments’ subsivision, about 20 are in the Sunshine Bay Developments’ subdivision, 24 in the Hilton Hensman subdivision in Fernhill Road, more than 35 in the Lake View subdivision, more than 50 in the Mountford subdivision near the Goldfields mining town, more than 70 in the Marina Heights subdivision, 81 at the Kawarau Falls subdivision, and 21 in the Lake County Council’s Balmoral subdivision at Kelvin Heights. The county engineer, Mr Les Matchell, said those were the biggest subdivisions but more plans were expected to go before the Lake County Council soon for a balance of area between Fernhill and Sunshine Bay. More sections were also expected in Larchwoods, Heights. The County Council may be contemplating further development of its Balmoral subdivision. There is still a balance of subdivisible land above Wynyard Crescent at Femlull and the Queenstown Borough Coun-

cil has further plans for additions to its Commonage subdivision. Land value in some cases had increased from 200 to 300 per cent and inflation was encouraging a strong demand for land, Mr Matchell said. Land was good security and had a better chance of capital gains. Recent comments that Queenstown is being bought out by overseas investors are not justified, in Mr Matchell’s opinion. Many of the investors, were from Otago and Southland, he said. People were realising that if they did not invest soon all the prime sites would be taken up. However, it was not uncommon for sections in the Queenstown area to be bought and sold two or three times a year — some must have been sold six times, Mr Matchell said. The demand was for a good view, the beauty of the area being the main attraction, but capital gain was at the heart of many purchases.