Central Otago’s Bright Future For Investment
With a high-performing tourism sector and solid year-on-year growth, Central Otago may well be the golden egg for astute investors.
Most of us are familiar with the gold rush history of Central Otago. Heroic stories of boom and bust and wayward fortune hunters are part of the region’s charm. These days, Otago has out-grown its history, proving a far more durable source of wealth than sluicing for gold.
Otago’s tourism is founded on remarkable natural beauty. Its captivating landscape has the power to take the breath away. This made it home to the earliest iconic walking tracks – including the Milford and Routeburn – which now attract thousands a year. The region also has many claims to ‘Adventure capital of the world’. The first bungee jump happened outside Queenstown and it boasts four commercial ski fields including Treble Cone, the South Island’s largest. Jet-boating and mountain biking are also popular year-round pursuits, and it’s not just thrill seekers who are drawn South – there are around 130 wineries and more than 2,000 ha of vines.
Is tourism fickle? Some argue that it is more volatile than other sectors. However, this is dependent on the size and vulnerability of the region’s offering. Otago has cemented such a strong brand in the international market, that it’s resilient. The signs are there that this goes far beyond a bungee jump and a jetboat thrill. More and more tourism is looking like a long-term lynchpin for economic and urban development, making up 20% of New Zealand’s export earnings with numbers set to increase 35% by 2024. In a broader context, New Zealand’s net migration is four times the UK and US. Auckland has the largest population and business base – but proportionately Central Otago’s year-on-year growth of 16% outstrips the bigger centers.
The activity is palpable. In Queenstown, Jacks Point will have 700 homes and a commercial precinct with 6,000 sqm of retail/commercial space. Nearby Henley Downs offers more affordable medium density housing with 2,000 sites. Development at Frankton Flats is also continuing with residential, commercial and retail developments and there has been significant investment in infrastructure, with the new Kawarau Bridge and the eastern route from the airport.
In Wanaka, Airport Corporation is well placed to make the investment needed to service jets, having secured a 100-year lease on the airport. The Northlake subdivision will bring 1,600 homes, while further east the mixed-use development at Three Parks covers over 100ha. Cromwell has also surged over the past 10-15 years thanks to horticulture and wine with more than 1,000 sections earmarked for new homes and school roles growing by 15% annually.
As the region gathers momentum it may pay to watch the smaller towns such as Kingston, Clyde, Luggate or Cardrona. The economics underpinning this growth is looking to bring lasting change – unlike the gold that inspired those early booms.