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Queenstown rents take a hit as tourism dries up

As average rent prices climb across New Zealand in spite of the pandemic, tourist town Queenstown has seen its rent prices plummet by 10 per cent since the same time last year.

According to MBIE’s data, average rents for NZ rose by 4.8 per cent in the three months to June since the previous year. Surprisingly, rent prices in many parts of NZ were unaffected by the lockdowns.

“Given that international visitors account for about 65 per cent of total tourism spending in Queenstown, it’s not surprising that the border closure will have hampered the economy and rental property demand,” explains Kelvin Davidson, Senior Property Economist for CoreLogic.

“Supply also seems to be playing a role, however, with the number of new rental listings for the year-to-date at its highest level since 2014.”

Masterton, which saw a 15 per cent fall in rental prices, can also blame oversupply for its falling prices – with new rental listings for the year to date the highest in the area since 2016.

As Davidson points out, it’s a combination of rising supply and the removal of international tourists that has impacted Queenstown.

Southland District, which relies on international visitors for 55 per cent of its tourism, has seen its rents continue to rise, regardless of the missing influx of visitors.

“Looking ahead, the recession and further increases in unemployment mean that weaker rental trends could spread to other parts of the country,” warns Mr Davidson.

“Indeed, at the worst point of the GFC (mid-2009), national average rents fell by 0.5 per cent on an annual basis, with more than half of the various districts/cities seeing rents decline.

“A repeat of that scenario would be good for tenants, but clearly very unwelcome for landlords.”

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