The latest overview of the Otago property market produced by Colliers outlines that while positive sentiment continues to grow, global uncertainty around trade and geopolitical tensions remain a threat to the ongoing recovery.
The annual Otago Property Market Review & Outlook was published by Colliers Otago this month and examined the residential, commercial, industrial, and lifestyle sectors from across the region, including Queenstown, Wānaka, Cromwell, and Dunedin.
The outlook notes some trends that are prevalent across other areas of the New Zealand market. This includes the impact of lower interest rates starting to boost buyer enquiry, construction costs remaining a concern for developers, and that premium assets are still transacting.
Tourism is one of the major drivers of growth in the wider Otago region and Queenstown Airport recorded a 10.3 per cent year-on-year increase in international passenger numbers in the year ending May 2025. This ongoing increase may lead to a shortage of hotel rooms in peak periods in the future.
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Heather Beard, Director of Valuation at Colliers Otago, oversees the Otago Property Market Review & Outlook and says there are signs the market is on the upswing.
"The property market appears to have turned a corner with stabilised interest rates, improving investment confidence, and cautious optimism in the market," Beard says.
"Furthermore, we are starting to see more activity from developers re-entering the market, which bodes well for residential opportunities in Queenstown as supply has been a longstanding challenge for the area to ensure enough accommodation is available for workers."
From a commercial standpoint, CBD retail assets remain tightly held in Queenstown with no recent deals to benchmark any movement in yields.
Industrial property in Queenstown remains sought-after among buyers and investment metrics are strong with low vacancy rates placing upward pressure on rents, particularly in Frankton.
In Dunedin, industrial vacancy rates remain at notable lows with a lack of supply of available stock and development land forcing developers to look at city fringe locations such as North Taieri.
Demand from investors remains in line with national trends and the Dunedin industrial sector has shown resiliency amid the challenging economic conditions across the country.
A revitalised retail precinct in George Street in the Dunedin CBD has proven popular, while large format retail has performed well due to high tenant demand.
Looking at the residential market in Wānaka, it remains one of opportunity for buyers with a high number of listings expected to keep prices stable into next year.
Cromwell continues to emerge as an affordable commercial and industrial location compared to Queenstown and Wānaka and high-quality assets with strong tenancy fundamentals have caught the attention of investors.
This year's report marks 30 years of analysis of property data and insights that have been produced by Colliers Otago.
It was started by Barry Robertson of Robertson Valuations in the early 1990s. This was then superseded by Macpherson Valuation in Queenstown in 1994, which then became Mac Property in 2003.
The company became a Colliers franchise in 2008 and since then, the Otago Property Market Review & Outlook has become an established annual publication.
Recently, every report from the past three decades was digitised into searchable PDFs by the Lakes District Museum & Gallery, meaning they are freely available to anyone to access as a resource.
- Supplied by Colliers
