An analysis of the Wānaka property market indicates ongoing supply issues in the tightly held commercial and industrial markets.

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.

The Wānaka market “remains active and has been fairly resilient to the challenging market conditions experienced in other parts of New Zealand,” Colliers Otago director of valuation Heather Beard said. 

“However, the local market has not been completely immune to current economic conditions. Buyers are now more cautious and are taking a conservative approach.”

Wānaka commercial market ‘tightly held’

Heather said the local commercial property market “continues to be tightly held and buyers looking for investment opportunities in the town centre facing a limited supply of stock”.

Buyers are showing more caution and are taking the time to evaluate investment opportunities thoroughly. 

There is a limited supply of stock for buyers looking to invest in the town centre.

She cited the example of the Mediterranean Market and McKenzie & Willis building, at 6/22 Ardmore Street, which sold in August after being first listed for sale in November 2021.

Retail vacancy remains low and there is also minimal office vacancy in the town centre, with no new supply of retail and office space in the short term, and “the high cost of land and construction is continuing to challenge the viability of new developments in the town centre.”

Tenant demand slowed during late 2023 and 2024, but tenants wishing to enter the Wānaka market do have options in the Three Parks development, “where new supply is ongoing at a steady rate”.

Read more: ‘Support local’ in challenging retail sector - business chamber boss

‘Continued demand’ in Wānaka industrial market

There is continued demand from investors for modern, high quality industrial property in Wānaka with long-term leases in place, Heather said, but the availability of stock is an “ongoing issue due to the tightly held nature of the Wānaka market”. 

Rents in the Anderson Heights Business Park and Ballantyne Road industrial areas have continued to increase over late 2023 and 2024, although at a slower pace than the previous two years. 

“Rents for existing premises are expected to stabilise going forward due to challenging economic conditions and tenant affordability ceilings being reached.

“There are very few vacant, titled, industrial sites currently available to purchase in Wānaka.

“There is also a supply shortage of industrial facilities, with several planned developments requiring tenant commitment before construction can commence, particularly in Three Parks.” 

Region-wide trends and projections

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.”

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

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