Queenstown-Lakes’ ‘absolutely extraordinary’ growth makes it fastest growing district in NZ
Sunday, 12 November 2023
Queenstown Lakes has overtaken Selwyn as the fastest growing territorial authority area in the country, with thousands of people flocking from all over the world for a chance to stay in the popular tourism district.
Recently released Stats NZ data show the district grew by 8%, or 3900 people, in the year ending June 2023, following lower growth of 1.5% in 2022. The growth was driven by a net international migration gain of 2500 people, with net internal migration (1100) and natural increase (340) making smaller contributions.
The bigger Otago region grew by 2.7%, well over the New Zealand average of 2.1%.
Arrowtown economist Benje Patterson says while there has consistently been growth in the Queenstown Lakes district, growth of 8% was “absolutely extraordinary”.
“That means 1 in every 12 people didn’t live in the district a year ago. That is astonishing when you think about what it takes to pack up your life and move to a new place.”
Queenstown Lakes District Mayor Glyn Lewers said the figures were in line with the council’s most recent demand projections - an estimated resident population of 52,020 for 2023 compared to the Stats NZ figure of 52,800 residents.
“Having two different projection models, central government’s and our own, being so close gives us confidence that council’s projections stack up and are reliable.”
Lewers said seeing the growth mainly happening in Queenstown was “good data which will help our council in informing the decisions we make as we look at the Long Term Plan which will be consulted on next autumn”.
‘Double-edged sword’
Patterson said after a challenging Covid-19 period with businesses crying out for staff, the region was “incredibly grateful” to see the migration tap well and truly open.
However, the influx of people did bring its own set of challenges. “It is definitely a double-edged sword for us, because having a large number of people move here, not only from all over the world but also from all over New Zealand, means we can now service the customers coming in and have our businesses running at full capacity - but the pressure on our infrastructure, especially housing challenges, have once again become very acute.”
Patterson said while properties in Queenstown were being built at an impressive rate, having almost 4000 people moving into the area translated to a demand of about 1300 to 1500 more homes.
“The houses being built are of course not all rental properties. Some are holiday homes or retirement homes - we haven’t seen a massive lift in rentals available.” He said this has led to people “double-bunking”, moving into spare rooms, or even businesses buying or leasing accommodation for their staff to live in.
A Queenstown Lakes District Council (QLDC) spokesperson said while new migrants obviously created additional demand for housing, the actual number would depend on the demographic mix of the newcomers and the opportunities to see housing stock repurposed from one type of accommodation to another.
“As the district’s housing demand is particularly dynamic, there’s no easy way to predict the exact impact of newcomers apart from recognising that there’ll need to be an overall increase in [housing] supply over time to cope.”
Approximately 2300 new homes were consented in the district since January last year.
The spokesperson said there was no way for the council to determine if new homes being built will end up being used as family homes, rental properties or holiday accommodation, although “our experience is that properties cycle through different uses depending on market circumstances”.
'Changes to tenancy laws and healthy homes standards have had a detrimental impact on the number of dwellings used for long-term rentals. Also, the most recent census data showed 27% of houses were empty on census night.'
An imbalance between the number of local residents and the high number of visitors in the district meant the council had to pay for infrastructure upgrades to support a growing population without seeing a similar increase in rate-paying residents to fund these upgrades.
“One potential solution [is] the visitor levy proposed in 2019. Council has been awaiting the outcome of the general election before planning next steps on this,” the spokesperson said.
Council was working with a range of local and national stakeholders to address the issue of housing, but it was fundamentally not a housing provider, they said.
“While council can zone and make infrastructure provision to meet demand, the market determines what land is actually developed or made available for sale. There are a number of active developers in the market with whom we’re working closely to ensure a continuity of supply.
“The important thing is creating opportunities for the right type of housing development in the right areas to support a growing population and a changing demographic.”
Aidan Gisbert, 28, is one of the newcomers in the region who knows the struggle of finding stable long-term accommodation.
Gisbert moved to Queenstown in May from Whistler, Canada after a close friend suggested he spend a winter season in New Zealand.
He hopes to “stick around for a while” and spend at least another winter in Queenstown, but says finding long-term accommodation has been a challenge.
“Before flying over, I was in talks with someone about renting a small studio. When I got here, the person had just sold it. So I’ve been on the hunt for about two months, bouncing between hostels and short-term [rental] rooms.”
While there had been a housing shortage in Queenstown for many years, the addition of peer to peer accommodation such as Airbnb had made it worse, Lewers said.
Accommodation seekers have spoken about showing up to viewings with dozens of others also looking for rentals, paying top dollar for sub-par accommodation, and even becoming homeless or having to leave Queenstown due to an inability to find housing.
According to council’s Joint Housing Action Plan 2023-2028, there is a shortfall of approximately 3000 affordable homes and this is predicted to increase to just under 6400 homes by 2050 if nothing is done.
Despite the housing problem, Queenstown still has a lot to offer, said Gisbert, including beautiful scenery, plenty of outdoor activities, skiing in winter and the bustle of a tourism hotspot - even if it came with a hefty price tag.
“The cost of living is pretty high. I got a second job as being paid minimum wage on my first one didn’t allow me to save at all.”
Patterson said while it was unlikely Queenstown-Lakes would see even faster growth in the year ahead, growth in the district would likely still be faster than other parts of the country.
Other territorial authority areas growing faster than the New Zealand average include Selwyn district (5.2%), Mackenzie district (3.6%), Hamilton city (3.4%), Auckland and Western Bay of Plenty district (both 2.8%), Waikato and Central Otago districts (both 2.6%), Tauranga city (2.5%), and Waimakariri district (2.2%).
By the numbers
For 3,900 new people in Queenstown Lakes, you would need 1,300 to 1,500 houses based on the typical occupancy rates in census data, says Patterson.
Using calculations from Ministry of Transport data, Patterson estimates the district’s population growth will translate to about 2600 more cars for the 3900 additional people.
According to World Bank data, New Zealand has about 3.6 doctors for every 1000 people so that would mean around 13 extra doctors needed in the Queenstown Lakes district.
Of the 3900 extra people, around 340 of them were aged between 5 and 19, said Patterson. “If conservatively we assume that there are 25 people per class and 250 attend school then this would mean 10 extra classrooms are needed.”