Queenstown’s housing problems are worsened by the fact so many are left empty.
As Queenstown and Wānaka struggle with a massive housing crisis, more than a quarter of homes in the region are thought to be sitting empty.
In a new report, economist Benje Patterson said about 650 more new houses were built in the last year than were needed to meet the needs of both population growth and short-term stay demand.
However, there were fewer homes available for rent, forcing workers to sleep in cars, at visitor hostels and for many to leave town.
“The question we don’t have a certain answer to is, what are these new houses being used for?
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“It is likely many are unoccupied and have been constructed as holiday dwellings or homes to retire to in future,” Patterson said.
The most recent data available on unoccupied dwellings said about 27% of all houses in the district were unoccupied in 2018, he said.
Queenstown Lakes mayor Glyn Lewers noticed that about one in every three letterboxes he walked past in Wānaka during his election campaign was stuffed with flyers and likely a holiday home.
There were similar areas of houses around Queenstown, he said.
Many were likely owned by people who chose not to rent them, but he wanted to find out if there were barriers that stopped others from renting their homes.
The problem is fuelled by the Queenstown Lakes District having the highest house prices in New Zealand.
Despite Quotable Value recording the first quarterly house price drop in the district in January since August 2020, the average value of homes was just under $1.7 million.
In the labour market report commissioned by the Queenstown Lakes District Council, Patterson found almost 1100 more homes were consented in 2022 than were needed to meet population growth demands.
The Queenstown Lakes area has a challenging housing market. (first published September, 2019)
However, rental supply was shrinking.
Trade Me data showed a 49% drop in rental listings in the district from December 2021 to December 2022.
Ministry of Business, Innovation and Employment rental bond reports showed almost 100 fewer rental homes available in November 2022 compared to the same month in 2021.
The housing issue is having a major impact on businesses with many hospitality venues closing for days each week because they do not have enough staff to meet demand from tourists.
A recent Queenstown Business Chamber of Commerce survey found three-quarters of respondents said the availability of accommodation for staff was more than just a minor issue for their business.
One in three said the housing situation was their biggest barrier to achieving optimal staffing levels.
Patterson said establishing the cause of the rental shortage was challenging.
Homeowners preferring to make their houses available for short-term stay accommodation listings such as Airbnb were often blamed.
There had been a recent increase in the number of homes listed for short-term accommodation in the Queenstown Lakes District, but listing numbers were lower than before the Covid-19 pandemic, he said.
Lewers said the report showed that while building houses was an important piece of the solving the housing shortage puzzle, it would not be the whole solution.
“We must tackle this from many angles and in partnership with those who can help our community realise sustained change in the makeup of our housing market.”
He planned to engage with local developers and central government.
One solution could be to build more suitable homes to meet market demand, such as medium-density two-bedroom homes, he said
Chamber of Commerce acting chief executive Sharon Fifield said many employers were now having to consider providing worker accommodation as part of their longer term workforce strategy.
The report also showed that job numbers in the Queenstown Lakes District had recovered to close to a pre-Covid peak in December 2019.
However, there was an increase in businesses servicing the local population, such as construction and professional services, while hospitality struggled to serve returning tourists with 1200 fewer staff than in summer 2019-20.
Wages in the district were consistently rising far faster than they were nationally – going from an annual average of $59,716 in December 2021 to $65,119 in December 2022.