What To Do With Your Holiday Home During A Pandemic
Wanaka – a beautiful holiday spot that is enjoyed by millions but now that the borders are closed what does that mean for property investors who have been letting their properties out as holiday homes?
Data collected by Tourism Central Otago has shown that Wanaka has not suffered the 40 to 60% drop so far that was predicted. It has in fact only experienced a 16% drop in visitor numbers since July 2020 compared to the same time last year due to the great number of New Zealanders getting out and about and exploring their own backyard. But it is also showing that New Zealanders aren’t spending as much as the international tourists would have. Tourism New Zealand’s recent research into what Kiwis want from domestic holidays has highlighted concerns over the cost of holidaying in the Wanaka region.
Local observations are that during the peak periods such as Christmas and New Years Wanaka was extraordinarily busy but once the holidays were over it has become noticeably much quieter. Waitangi weekend saw a lot of people come to town and Glendhu Bay camping ground enjoyed many visitors. But now the big holiday period is over Wanaka’s accommodation, tourism and hospitality industries are suffering. Many restaurants and bars are talking of shutting down on selected nights, pressure is on those that have employed staff but with no diners ‘there’s only so much cleaning you can do’ says one waiter I recently met.
There has been a sharp reduction in short term accommodation providers business. Motels, holiday parks, holiday homes are seeing very few bookings coming through over the next late Summer to Autumn period. In addition to this with the constant imminent threat of a potential covid lockdown, bookings are being made at much shorter notice. For those up-and-coming special events and long weekends such as the Wanaka A&P Show and Otago Anniversary weekend, bookings are being made for more cost effective accommodation options but for those in between times it is quieter than Wanaka is used to.
What does this mean for those with holiday homes in Wanaka? Buying a home in Wanaka is an expensive investment and the yields are low but the capital growth over time has seen exceptional leaps. It is fine for those that can weather the storm and are happy to have their homes vacant for large periods of the year. But for those that have a mortgage on their second home and bought them for the investment potential but only wanted holidaymakers using their houses they will be suffering.
There is a light at the end of the tunnel! With the current high and growing property prices there are large numbers of people in the area looking to rent on lengthier terms which can be anything from 3, 6 to 12 months and even longer. The pandemic has brought more Kiwis to Wanaka from overseas and from places like Auckland.
People who have dreamt of a life in Wanaka with its natural beauty and lifestyle opportunities are making that move perhaps earlier than they would’ve if the world hadn’t endured a pandemic. They are coming to Wanaka and renting whilst they find or build their dream home or they’re just trying it out to see if Wanaka really is the paradise they hoped for. There are also a number of foreign workers who are still employed locally looking for cost effective renting options.
For those with holiday homes that want more financial security right now considering renting out to tenants on longer terms will help you survive these challenging times. At Proppy Management we have a number of potential tenants waiting for the right property to come up. Contact us today to explore the option of renting out your holiday home on a longer term.