Adam Leath 16 January 2026
Central Otago & Queenstown Lakes District Report
Should you invest here? Information you need to know on the latest property trends and developments in Central Otago
How it has been:
The Queenstown Lakes District and Central Otago markets have always had a touch of drama. Stunning scenery, boom-bust cycles, and all the emotions in between.
During the 2020-2021 boom, both areas saw property prices surge on the back of record-low interest rates, strong domestic migration, and Kiwis reassessing where they wanted to live. Queenstown Lakes in particular experienced rapid growth, driven by lifestyle demand, limited land supply, and international appeal.
Central Otago towns like Cromwell, Alexandra and Clyde also posted strong gains during this period, with some areas seeing double-digit annual growth as buyers priced out of larger centres looked for more affordable lifestyle alternatives.
Then came the correction of 2022-2024. As interest rates climbed and lending criteria tightened, the heat came out of the market. Sales volumes fell, buyers became more cautious, and price growth flattened. Unlike Auckland and Wellington, however, Queenstown Lakes did not see the same scale of decline. Values generally stabilised rather than dropped sharply.
Many vendors chose to sit tight. Investors were not rushing for the exits, particularly in areas with strong rental demand and tourism-driven fundamentals.
Despite the sales slowdown, rents across Queenstown Lakes and Central Otago continued rising. Tight rental supply, a tourism rebound, and ongoing worker shortages all contributed to sustained upward pressure. By late 2025, Central Otago and the Lakes District had become the most expensive region in New Zealand to rent, with average weekly rents approaching $750pw.
Gross rental yields were heavily compressed during the boom, especially in Queenstown itself. While it was common to see yields close to 3 percent in peak locations, the recent stabilisation of prices and continued rent growth has improved yields slightly. Lower-entry towns such as Cromwell and Alexandra continue to offer stronger yield profiles than Queenstown proper.
How its going:
Fast forward to late 2025, and the market feels steadier.
Queenstown Lakes remains one of the most expensive residential regions in the country with a median value of $1.64m. Central Otago towns remain significantly more affordable, with median values between $700k and $900k.
Prices are not racing ahead, but they are no longer falling. Most indicators point to a stable to gently rising market, rather than a sharp rebound.
Sales volumes are higher than the 2023-2024 lows, although still well below the frenzy of 2021. First home buyers are active again in Central Otago. Lifestyle buyers are cautiously returning. Well-priced homes in towns like Cromwell, Arrowtown and Lake Hāwea continue to attract solid interest.
Queenstown Lakes and Central Otago now consistently rank as the most expensive rental regions in the country. Worker accommodation shortages limited new supply and tourism-driven demand keep pressure on rents. Vacancy rates remain low by national standards.
Yields vary widely by location and property type. Queenstown itself remains yield-constrained due to high buy-in prices, while Cromwell, Clyde and surrounding areas often provide a better balance of cash flow and entry price.
Investor interest is beginning to pick up again. With planning changes allowing for greater density and smaller section sizes in parts of the region, there is growing optimism that more attainable housing stock will gradually enter the market. This is particularly relevant for first home buyers and long-term investors.
How its looking:
Sentiment heading into 2026? Cautious optimism with a splash of Pinot Noir.
Month-on-month growth is ticking along. CoreLogic data showed Queenstown-Lakes had strong growth early in the year with an increase in average price of 3.2% between February and March 2025. Mortgage rates are trending lower, affordability is (slightly) improving, and buyers are more confident.
Don’t expect fireworks, this is a slow burn. Price growth is likely to be moderate through 2025-2026, with buyer selectiveness remaining high. There’s plenty of stock on the market, so presentation and pricing are critical.
What you need to know:
The Southern Lakes market has weathered its fair share of ups and downs, but the long-term story remains strong. Queenstown-Lakes and Central Otago offer:
- Some of the highest rental demand in the country
- A high-quality lifestyle magnet for buyers
- Scarce land supply = long-term capital growth
2025 is a buyer-friendly environment. Prices are still 10-15% below peak. Rents are at record highs. Investor competition is low, but is on the rise with more coming into the market
For investors, here’s the cheat sheet:
- For yield: Alexandra, Cromwell, parts of Frankton.
- For capital growth: Wānaka, Queenstown Hill, Arrowtown.
- For balance: Lake Hāwea, central Queenstown, Frankton.
Investor sentiment is steadily improving. Many see this as a rare chance to lock in quality assets in one of NZ’s most desirable regions-while the market is still in a "buyer's market" phase.