An analysis of the Wānaka property market indicates that interest in the residential market is fairly steady but buyers are cautious.

Colliers’ annual property market wrap-up and projection report says market sentiment is expected to improve in the coming year, both in Wānaka and across the region.

“Wānaka remains a desirable location to live and holiday in, with domestic migration and visitor numbers providing solid local economic drivers,” Colliers Otago director of valuation Heather Beard said.

According to Statistics New Zealand, population growth in Wānaka and surrounds averaged 4.5 percent per annum over the five years to 2023. In comparison, population growth across New Zealand for the same period was only 1.3 percent per annum.

Still, it has been a mixed year for the local residential market.

Interest and activity in the entry level range sector of the residential market remains steady with “good demand”, Heather said, while the luxury market has “generally proven to be robust”.

Section sales, on the other hand, “remain slow”.

“Titles have been released in several new developments in 2024, accounting for the large volume of section sales during the year,” Heather said. “However, it is worth noting that the majority of these sections were signed up in 2021 and 2022 in more favourable market conditions.”

“There has only been a limited number of titled section sales in Wānaka outside of these developments between January and July 2024.”

Even though interest in the luxury market has been “fairly strong”, actual transaction levels remain low.

Just seven sales above $4M were concluded between January and July 2024, two of which were lifestyle properties. 

The highest price paid for a residential dwelling in Wānaka in 2024, to the end of August, was $7.84M, well down from the previous record sale price in 2023 of $10M for a residential property on a 2ha block.

In the rental market, the “extreme rental property shortage” has eased, listings have increased, and rents “appear to be stabilising” after a period of rapid growth.

The median weekly market rental in Wānaka in the first half of 2024 was $820 per week, more than $160 under the comparable Queenstown median of $975.

Market sentiment across the region is expected to improve into 2025, especially with the improved outlook for interest rate cuts, Heather said.

“With uncertainty and challenges facing both buyers and sellers in the market we have certainly seen the ‘wait-and-see’ approach play out this year.”

Wānaka was one of the locations with “pockets of stronger activity”, along with Queenstown and Central Otago, because the attraction “as a lifestyle choice for people leaving the main cities remains strong”.

Region-wide, Heather said she expected transaction volumes to pick up as the effect of decreasing interest rates gradually begins to flow through into the market. 

“However, highly geared homeowners will continue to be challenged until we see any significant effect on mortgage rates, which is still a long way off.”

Read the full 2024 Colliers Property Market Review and Outlook report here.

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