Property prices are surging in New Zealand vacation hotspot Queenstown as tourism puts the mountainous South Island town on the radar of Chinese investors.
Residential property prices in Queenstown jumped 22 percent in the year to the end of May to an average NZ$875,002 ($593,950), according to government valuer QV on Wednesday.
The rise was nearly twice the national average of 12.4 percent and even steeper than the booming Auckland market, where prices rose 15.4 percent to NZ$955,793.
New Zealand’s house prices are among the fastest rising in the world, according to the International Monetary Fund, in large part to an influx of foreign investors and migration.
“Housing supply, particularly in Auckland and Queenstown, is not able to keep up with demand and this is driving values ever higher,” said QV spokeswoman Andrea Rush in a statement.
Tourism has helped put the Queenstown on the map for foreign investors, who are keen to have a rental property that doubles as a holiday home. The countryside was a backdrop for the “The Lord of the Rings” movies.
Queenstown-based real estate agent Mei Chen said that in the past year the fastest growth was coming from Chinese investors.
Chen said many clients from China were looking for properties priced at NZ$2 million or more which they could rent for part of the year.
The lakeside town of less than 20,000 people hosts around 1.3 million international tourists a year, up from 980,000 in 2009, according to its tourism agency. The number of Chinese tourists has grown 867 percent over the past five years.