Queenstown development: ‘Astronomical’ prices for Airbnb-style apartments
Wednesday, 10 April 2024
A $2 billion central Queenstown development selling apartments for “astronomical” prices is being criticised for adding unwanted Airbnb-type houses to the town and increasing traffic woes.
Lakeview/Taumata sales agents are meeting potential Australian investors this week as they look to sell the first stage of the development — 224 apartments, including a 475sqm penthouse priced at $25.5 million.
The bulk of the apartments range in price from $750,000 for a studio unit to $2.75m for three bedrooms and between $8m and $11m for a sub-penthouse.
The marketing material promotes substantial returns for short term holiday rentals - such as Airbnb - from $450 a night for a studio unit to $2200 a night for a three-bedroom apartment.
It paints a beautiful picture of the completed development, which would include four hotels, shops, restaurants, bars, an art gallery, public plaza, gym, hot pools and housing for 1500 people, in 14 years time.
“We are curating a community beyond mere construction; the locale will nurture diversity and a deep sense of belonging interwoven with the existing cultural tapestry of Tāhuna/Queenstown,” it says.
Despite not having resource consent, many features are written about in the present tense, such as restaurants that “promise an unparalleled epicurean adventure” and pet groomers who “offer the finest treatments for your furry friend”.
And in a town bereft of car parks, which experiences daily congestion and frequent gridlock at peak times, there is no mention of car parks, but “concierge services” and a “fleet of luxurious vehicles”.
It does say the company has designed a “transportation strategy that reflects our values of sustainability, community engagement, and utmost convenience”.
Stuff requested a copy of the transportation strategy but had not received it before deadline.
Hotelier Mark Rose said the whole development was weird, especially given that it was on Queenstown Lakes District Council-owned land.
“The council are using ratepayers land to do exactly what ratepayers don’t want.
“They don’t want more congestion … and if we’re going to use it as visitor accommodation, it’s going to put more stress on infrastructure.”
Following concerns over short term visitor accommodation negatively impacting the long-term rental market in Queenstown the council tried to introduce limits, but lost to Airbnb in a court case.
The development sits on 10ha of prime real estate, which previously housed the Lakeview camping ground.
The council is selling the underlying land in a deferred settlement as developers 94 Feet, and Centuria Capital complete each stage of the development.
Ratepayers will gain $77m from the deal, as well as up to 50% of the development’s profit as the values change over time.
Mayor Glyn Lewers said he could understand the developer’s push for short term visitor accommodation in the marketing material as it would establish a commercial return.
It was better to have the apartments in town than in the suburbs, he said.
The council could not force developers to include car parking as any requirements were dropped from the District Plan and, more recently, removed by central government.
“But do we want a fleet of cars going up there? We’ve got to turn our heads to other modes of getting there,” he said.
He was confident the completed development would be a good outcome for the community.
“We still own the land and they’ve got to meet their requirements. The deal is an exemplar for how local government does deals,” he said.
Queenstown Lakes Community Housing Trust chief executive Julie Scott said it was a shame there were not more units aimed at the long term rental market.
However the trust would receive a “fantastic” 5% of net sale proceeds from the consortium, which it would use to develop housing in other parts of town.
It had already received an initial payment, she said.
The council had retained ownership of part of the former holiday park land, known as the Lynch Block, which she hoped would be used for affordable housing in the future.
The first stage of the development also included a co-living space with 94 rooms for rent with shared facilities, which the consortium would own and appoint an operator to manage.
Questions have also been raised about the cost of the apartments, which per square metre are about double other properties in central Queenstown.
“You can buy an amazing house in Queenstown for half that price and it won’t be in the middle of a construction zone for the next 10 years,” a businessman who did not want to be named said.
A real estate agent confirmed the prices were “astronomical”, though “not outside the realms of possibility”.
“There are people out there who want these products, but there are so many unknowns around timing and construction,” she said.
In February exclusive sales agents NZ Sotheby’s International Realty said $100m worth of apartments in the development had sold in the three months prior, before they were listed on the market.
A consortium spokeswoman said sales had now tipped over $100m and while the $25.5m penthouse had not yet sold, two sub-penthouses have sold to one buyer.