Corelogic Queenstown Lakes
Kelvin Davidson, Senior Property Economist, Corelogic.
1 June 2021
Rental data is sourced from the Ministry of Business, Innovation and Employment based on rental bonds lodged. This data is supplied to us grouped into geographic areas based on statistical area units used by Statistics NZ for the census and as a result do not always match well with common usage suburb names.
The rental data for each area is matched to property price information from our database to determine property prices and therefore yield. The yield is calculated as the annualised rental income divided by the median property value calculated using our E-Valuer.
The rental market across Queenstown Lakes has recently been dominated by houses, as tends to be the case in most parts of the country. Of the 416 properties recently on the rental market, 269 (65%) have been houses, with 50 flats (12%) and 97 apartments (23%).
The largest sub-market for rental houses lately has been Queenstown/ Frankton/Arrowtown (156), with Wānaka also having a significant figure (99). Queenstown Central (14) is much smaller. In terms of the concentration of houses amongst recent properties available for rent, Wānaka’s figure is 100% (ie no flats or apartments), while it’s 55% in Queenstown/Frankton/Arrowtown and 41% in Queenstown Central.
Queenstown/Frankton/Arrowtown has had the most flats (44) and apartments (83), although the share of apartments in Queenstown Central’s recently available rentals has been higher (41% versus 29%).
House Size, By Bedroom Count
Looking specifically at houses (269 properties), 52% recently on the rental market across Queenstown Lakes have had three bedrooms, with another 25% in the four-bedroom bracket and 16% with two bedrooms. Only 4% have had five bedrooms and 2% with one. It’s common across the country for rental houses to be towards the smaller end of the spectrum (especially three bedrooms), rather than being larger five-bedroom stock.
For three-bedroom houses recently on the rental market, the most properties have been in Queenstown/Frankton/ Arrowtown (74), followed by Wānaka (57). By concentration, three-bedroom properties are about 60% of the house market in Queenstown Central and Wānaka, but less than 50% in Queenstown/Frankton/Arrowtown.
In the four-bedroom category, the most properties have recently been in Queenstown/Frankton/Arrowtown (35) and Wānaka (28), although again the concentration is higher in Queenstown Central (36%). Note that Queenstown Central has recently had no one, two, or five-bedroom houses available on the market to rent.
Rent And Yield
By matching average value to rent we can look at gross yield for three-bedroom houses in each area.
Median weekly rents for threebedroom houses across Queenstown Lakes are relatively uniform, at $575 in Wānaka, and $600 in both Queenstown Central and Queenstown/Frankton/ Arrowtown. However, the values for these properties differ a little more, ranging from $1.01 million in Wānaka up to $1.20 million in Queenstown/ Frankton/Arrowtown.
In turn, that means yields also differ a bit, with the highest of 3.0% in Wānaka, down to 2.6% in Queenstown/Frankton/ Arrowtown. By national standards, these rental yields are low, but the flipside is that over the years investors in Queenstown Lakes have made significant capital gains.
That said, there’s obviously been more volatility and uncertainty over the past year or so, and rents themselves have been weak. Indeed, for three-bedroom houses, they’ve dropped by nearly 5% in Wānaka lately, and by almost 25% across other parts of the district.