RESEARCH & CONSULTING

Transcription

1 A Market Demand Study prepared for QUEENSTOWN LAKES DISTRICT COUNCIL Of Date

2 Contents Page 1 Executive Summary Opinion Overview Study Objectives Background Demand Projections Limitations Authors Introduction Background Objectives Scope Critical Assumption Methodology Introduction Primary Research Secondary Research Background Location Analysis Cardrona Valley, including the existing Village and Study Area Site Analysis Study Area Population Profile Key Findings Development Potential and Site Capacity Overview Site Capacity / Building Typology Key Points Residential Analysis Overview Catchment Methodology Population Analysis Homeownership / Affordability Absentee Owners

3 6.6 Property Supply New Residential sections and Apartment Absorption Remaining Capacity Proposed Development Residential Demand Forecast 42 7 Tourism Analysis - Short Stay Visitors Visitor Analysis QLDC Level Short Stay Accommodation Market Short Stay Demand Drivers Key Findings Short Stay Visitors Proposed Development Short Stay Accommodation Forecast Business Analysis - Long Stay Workers Overview Worker Market Proposed Development Long Stay Accommodation Forecast Overseas Experience Overview Observations Key Findings Conclusion Indicative Demand & Timing/Staging of Development CBRE Opinion

4 1 Executive Summary 1.1 Opinion We summarise our key opinions as follows: CBRE s demand analysis indicates that demand for residential and visitor/worker accommodation in Cardrona will be considerably greater over the 18 years between 2009 and 2026 than MCS s proposed capacity of 969 units. In our opinion therefore, there will be sufficient demand to facilitate the successful development of the wider Cardrona area, including MCS and the existing village. In our opinion, the demand profile for the area should enable the creation of an integrated development catering for a wide range of uses which should, over time, lead to a vibrant and sustainable year round community. We would not expect the feasibility of MCS to be at the expense of development of Cardrona Village. To the contrary, we would expect the above described demand shift to have a positive impact on demand for property at Cardrona Village. Cardrona has the necessary attributes to facilitate development of an integrated and sustainable village over the medium/long term. At present, the valley has very much a winter focus, but we are of the opinion that over the medium term, summer activities can be enhanced and developed. This will result in a less seasonal demand profile, more in line with Queenstown and Wanaka, and more supportive of a sustainable village environment. This expectation is consistent with overseas experience. Furthermore, we note that within a minute drive, there are a wide range of summer and further winter activities as well as commercial and township amenities. Cardrona currently has a population of 66 and any incremental growth from this base will not be material. However, as Cardrona develops, spear-headed by development of MCS, we would expect a demand shift, and comparatively material new demand. The recent development of Benbrae in Cardrona Village illustrates the potential demand shift that can occur. This high density development of 90 proposed units has already achieved (within a comparatively short time frame) 67 sales and presales. This almost doubles the number of units in Cardrona. In our opinion, within 18 years of the commencement of MCS (by 2026), there will be more than sufficient demand to absorb the development capacity of both MCS and Cardrona Village. As a result of this 4

5 demand, and assuming adequate design flexibility to meet market demand sectors, development of MCS would be feasible. The above opinions are based on forecasts which rely on our research and analysis of the factors likely to impact the demand for development at Cardrona Valley. They reflect our best estimate of future demand relative to our knowledge as at the date of this report. However, like any forecast, the figures presented and relied upon in forming our opinions represent only one permutation of many possible future scenarios. To this extent, our opinions are indicative estimates of potential future demand at Cardrona Valley. 1.2 Overview Mount Cardrona Station ( MCS ) is a substantial land holding located at the base of Cardrona Ski field and with frontage to Cardrona Valley Road. The land already has existing use development rights, however, the owners of have reached agreement with Queenstown Lakes District Council ( QLDC ) to proceed with a plan change to improve the form and quality of future development. At this preliminary stage, the exact form and location of the new zone has not been confirmed. However, the Plan Change would provide zoning to encourage visitor accommodation and residential development while minimising effects on the impressive landscapes in the vicinity of the site. The following table compares the future capacity of Cardrona Village and the proposed capacity of MCS, either through a plan change or development of the existing zone. Cardrona Type Village Existing Zone Plan Change Scenario 1 Scenario 2 Visitor Accommodation , * Residential Total , * includes high density residential Additional development capacity - may be over stated due to the inclusion of potential development on a floodplain Source: RA Skidmore Urban Design Ltd It is acknowledged that QLDC wish to ensure that MCS and the existing Cardrona Village develop in a complementary way, which enables a sustainable and integrated community to establish within the valley. 5

6 1.2 Study Objectives The agreed objective of this study is as follows: Based on an analysis of current and projected demand, as well as the shift in demand that additional development at Cardrona may create, determine the feasibility of the proposed development and answer the following questions: Will there be sufficient demand to feasibly support: Transient accommodation (quality hotel, mid market hotel, budget or backpacker accommodation) Staff accommodation Residences for permanent (owner occupier) accommodation Residences for owner occupier holiday accommodation Other uses as proposed, or potentially permissible. In addition, provide advice as to the likely uptake of the proposed development to the extent that this may impact staging from a market demand perspective. Please note that our analysis has not explicitly considered the requirement for commercial facilities. The objective of this study was to determine the feasibility of the proposed development. While commercial facilities are obviously integral to the success of an integrated village, the size and extent of commercial facilities is directly correlated to the creation of a sustainable village, with a mix of permanent residents and short stay occupants. This report does address our opinion as to whether a sustainable village can be created at MCS. 1.3 Background Location Cardrona is located in a spectacular mountain environment with excellent proximity to a range of winter activities. It is en-route between two larger and established townships, Queenstown and Wanaka. MCS features an elevated plateau well suited for development. The current permanent population of Cardrona is 66 and existing development in Cardrona Village is a mix of short stay and owner occupier accommodation. The extent of this development is relatively limited, with less than 25% of the capacity of the existing village having been developed. The village currently relies heavily on the surrounding 6

7 winter activity, with limited existing summer and shoulder season attractions. While Cardrona has a strong history, extending back to the late 1800s, there is limited ability for tourists to observe and participate in the heritage of the valley. The lack of development and infrastructure at Cardrona means that skiers or workers in the valley predominantly travel from Wanaka and Queenstown Permanent Residents QLD has experienced strong growth since QLDC is anticipating continued strong resident population growth over the next 20 years, with the population more than doubling over this period. Absentee owners represent a material proportion (estimated by CBRE to be approximately 60% to 80%) of purchases of property stock in the QLD, in new, integrated mixed use developments Tourism Not surprisingly, skiing is the overwhelming driver for winter visits. However, Queenstown has a strong and more sustained tourism period through the summer months. The greater QLD market exhibits a peak summer period of around six months, winter period of three months, and a three month off-peak/shoulder period. Given the range of existing winter activities at Cardrona, demand for accommodation facilities in Cardrona during the three peak winter months (July-September) is already established. Indeed, the greater Wanaka area (including Treble Cone, Cardrona, Snow Farm, and Snow Park) has a 50% market share of ski field visitor days in the QLD (335,000) with the balance (335,000) being within Wakatipu at Remarkables and Coronet Peak. Forecast visitor night growth in QLD is expected to increase 3.4% per annum through to 2012, compared to the New Zealand average of 2.9%. This growth expectation is consistent with the expected growth in passenger numbers at Queenstown International Airport, where within 6-7 years, it is anticipated that there will be daily flights from Australia. Similarly, while Wanaka Airport is at present utilised mainly for nonscheduled charter flights, it is anticipating material passenger growth and, ultimately, by around 2021, scheduled Boeing 737 and AS320 flights. 7

8 Locally, the Snow Farm and Park in Cardrona have experienced very strong visitor growth over recent years with 60,000 skier days in The existing (comparatively small) horse-trekking facility in Cardrona attracts some 3,500 visitors annually. Other existing summer attractions include limited walkways and mountain bike tracks Overseas Experience We are privy to a report prepared by Ecosign Mountain Resort Planners Ltd dated September This report seeks to draw comparisons between MCS and other ski resorts in Australia, Canada, and the United States. Key findings from this evaluation are: It appears that when ski resorts are in their initial development stages, they primarily rely upon winter season demand. As they mature, it is apparent that more summer orientated facilities are progressively developed to decrease seasonality. Most ski resorts are characterised by a low permanent resident population (18 to 50%). The growth and development of resorts varies. For example, Sun Peaks in Canada (which has an approved Master Plan for up to 6,000 units) had 68 dwelling units in 1994, and this had grown to 1,435 by Similarly, in the Three Sisters Resort in Canada (which has a Master Plan for development of 4,000 units), 1,100 dwelling units were developed between 1996 and 2005, with another 250 currently under construction. The number (supply) of accommodation units typically represents between approximately 0.4% and 0.6% of skier numbers. 1.4 Demand Projections In establishing our demand projections, we have individually modelled our forecasts for residential accommodation, short stay visitor, and worker accommodation demand, and have then combined these findings to determine an overall demand profile and an estimate of the cumulative demand for accommodation units (whether resident, visitor, or worker) in Cardrona Valley. These forecasts have then been used to analyse and consider the probable staging of development. Fundamentally, our demand projections reflect the fact that: There is already sufficient (and growing) demand to support a material demand shift in supply in Cardrona Valley over the three month ski season from July to September, as evidenced by the Benbrae development as previously discussed. 8

9 Within QLD, there is a considerable amount of travelling between ski fields, whereas MCS and Cardrona Village can provide accommodation immediately at the base of three snow related activities. There is material population growth expected for QLD. In our opinion, given the established attraction of Cardrona and assuming a good development strategy for greater Cardrona, Cardrona Valley could capture a reasonable percentage of this new growth. However, the extent of medium to long term market share growth will depend on the ability to develop summer demand drivers. In our opinion, development of summer attractions at Cardrona can reasonably be expected to be possible, given overseas experience and the experience at QLD and Wanaka, and also given the real potential to develop/establish: o A heritage profile for the valley o Walkways o Mountain biking o 4WD tracks o Year round hospitality businesses based on the convention / conference, and spa markets o Other outdoor related attractions, and potentially o A golf course. Our detailed analysis and findings are found in Sections 6.9, 7.5 and 8.3 respectively, however for each of the key demand sectors, we note as follows: Residential Demand Permanent and Non-permanent (absentee) The fundamental assumptions in determining residential demand are as follows: We have considered the main catchment area population growth for QLD (based on QLDC projections of approximately 1,000 p.a.) and, based on a household density of 2.4 people per household, estimated the number of new households in QLDC to meet this demand. We consider that (based on our comments in Section 6.9) Cardrona Valley would capture approximately 4% of all new households (one in 25) in the main QLD catchment area, particularly if some of the housing satisfies the medium to lower value market which will improve the liquidity of the development 9

10 product. We would expect the total market share for Cardrona to grow to between 6 and 7% as development establishes and a demand shift occurs. We have assumed that 35% of all residential unit sales will be to permanent residents (owner occupiers), with the balance being absentee owners (see section 6.5). We are aware that other studies relative to Wanaka estimate that approximately 50% of all residential unit sales will be to permanent residents (owner occupiers) while we do not concur with this estimate we have illustrated the impact of a 50/50 split on demand for comparative/sensitivity analysis purposes. Our forecasts represent demand for between 50 and 97 additional units per annum over the forecast period, which compares favourable with Cromwell which experienced an average annual take-up over the 5 years between 2001 and 2005 of 71, or 14% of sales in the main catchment area. It also compares favourably with the number of units added by the Benbrae development in Cardrona Village (40 units completed thus far and 50 more to be built 74% sold). We forecast total residential demand (permanent and absentee owners) at 734 units by 2018 and 1,493 units by Visitor/Short Stay We have considered this sector of the market under two sections, namely demand for hotel style accommodation and demand for budget/backpacker accommodation. We have assumed that much of the non- permanent residential housing (absentee ownership), as discussed above, will be sold with the ability to be within a management pool for short/medium stay accommodation, as is typical in many modern resorts in New Zealand and Australia. As a result of this structure, dedicated short stay accommodation demand (such as a purpose built hotel unit) is to a large extent offset by the non-permanent residential accommodation that is likely to be available under a serviced apartment model. Bearing this in mind, our key assumptions are noted as follows: We are aware of actual QLD hotel and backpacker stay units nights (see section 7.1.2), and have forecast these over the forecast period. 10

11 We forecast that Cardrona will capture 2% of the total QLD hotel and backpacker markets, rising to and stabilising at just under 5% by We consider a hotel or backpacker operator would accept a 52% initial occupancy rate (Year 1) with an expectation that this would increase to around 70% within 5 years. We forecast demand for Cardrona Valley for around 340 hotel rooms and 156 backpacker units by 2018, and 536 hotel rooms and 206 backpacker units by Worker Accommodation We estimate that approximately 51,000 worker days (accommodation nights) would exist in 2009 in Cardrona, with this demand resulting from employees associated with skiing, the proving ground, commercials/films and on site hotel/restaurant workers. We expect that the quality of accommodation demanded by these workers will vary between mid to high end accommodation, and budget accommodation, with the latter being in greater demand. 51,000 worker days results in feasible demand of 97 accommodation units in 2009, rising, conservatively, to 111 units by 2018 and 125 by The growth in demand for worker accommodation is low partly because part of this demand will be able to be satisfied by the residential accommodation provided within the development that (as discussed), when not occupied by owners, is available within a management pool for short/medium stay accommodation Overall Demand and Possible Supply/Staging The following table summarises our projections for the resident/visitor and worker demand components for Cardrona: Permanent resident take up annual cumulative Non permanent Resident take up annual cumulative Total residential take up annual cumulative Mid/high end short stay accom. annual cumulative Mid/high end worker accom. annual cumulative Budget short stay accom. annual cumulative Budget worker accom. annual cumulative Total annual cumulative ,000 1,177 1,280 1, Source: CB Richard Ellis 11

12 In summary, we forecast that there is demand for 1,389 units in Cardona (including MCS and Cardrona Village) within a 10 year time frame and 2,414 units by For comparative/sensitivity analysis purposes, if we assume that the split between permanent and absentee owners is 50/50, the total demand falls to 1,169 units within a 10 year time frame and 1,966 units by Our forecast for development staging/timing (supply) is shown below: Residential Demand annual cumulative Residential Supply residential exc.non permanent units available for short stay (66.6%) non permanent residential units available for short stay (33.3%) Total Residential Supply annual cumulative Mid to high end short/long stay demand Short stay visitor Long stay worker Total mid to high end short/long stay demand Less non permanent residential units available for short stay (33.3%) Purpose built mid to high end short/long stay demand annual cumulative Purpose built mid to high end short/long stay supply annual cumulative Budget short/long stay demand Short stay visitor Long stay worker Total budget short/long stay demand annual cumulative Purpose built budget short/long stay supply annual cumulative Total Supply annual cumulative ,023 1,151 1,234 1,396 1,488 1,585 1,669 1,758 1,854 1,957 2,068 Note: some rounding errors apply Source: CB Richard E We note that: Based on our assumptions with development staging, and assuming a development start date of 2009, we forecast total feasible supply to reach 1,234 units by the end of 2018 and 2,068 units by The forecast supply within the ten year horizon is less than the forecast demand (of 1,389 units) as a result of the likely stepwise (or lumpy ) nature of supply relative to demand. Notwithstanding that resorts such as that proposed at MCS require established summer activities for overall success, it is interesting to note the relationship evident at overseas resorts between skier numbers and the number of accommodation units for ski resorts. The expected total feasible supply of 1,234 units by

13 represents 0.6% of current skier numbers (which we expect to increase over the next 10 years) in greater Cardrona (Cardrona together with the Snow Farm and Park). These parameters are comfortably in line with the experience of ski-focussed resorts overseas, particularly given that as skier numbers increase, this ratio will reduce. 1.5 Limitations Reliance upon this document by anyone other than Queenstown Lakes District Council and the proprietors of Mount Cardrona Station is not authorised by CB Richard Ellis and CB Richard Ellis is not liable for any loss arising from such use or reliance. The document should not be reproduced without our written authority. This document may contain information which is directly derived from other sources, without verification by us. Where the content of this document has been derived, in whole or in part, from sources other than CB Richard Ellis, CB Richard Ellis does not warrant or represent that such information is accurate or correct. Our assessments and forecasts rely to a large extent on information which is directly derived from other sources, without verification by us. Additionally, it should be noted in relation to the assessments and forecasts contained in the report that some variables cannot be estimated with certainty and our assessments and forecasts represent assumptions which are not guaranteed to hold. Accordingly, our assessments and forecasts should only be considered in an illustrative rather than definitive context and no warranties are provided as to their actual and eventual accuracy. 1.6 Authors This report was prepared by: 1. John Schellekens, Senior Director Valuation and Advisory Services. John holds a B.Com (VPM) and a Master of Property Studies (with Distn) from Lincoln University and is a Senior Member of the New Zealand Property Institute. 2. Zoltan Moricz, Director Research and Consultancy. Zoltan holds a MA (1 st Class Honours) from the University of Auckland and a Post Graduate Diploma in Finance from Massey University. 13

14 2 Introduction 2.1 Background MCS is a substantial land holding located at the base of Cardrona Ski field and with frontage to Cardrona Valley Road. The land already has existing development rights, however, the owners of have reached agreement with Queenstown Lakes District Council (QLDC) to proceed with a plan change to improve the form and quality of future development. At this preliminary stage the exact form and location of the new zone has not been confirmed. However, based on urban design analysis the Plan Change is likely to provide zoning to encourage a mix of visitor accommodation and residential development while minimising effects on the impressive landscapes in the vicinity of the site. Objectives have been agreed between QLDC and MCS as per a report to Strategy Committee of 12 October Objectives The agreed objective of this study is as follows: Based on an analysis of current and projected demand, as well as the shift in demand that additional development at Cardrona may create, determine the feasibility of the proposed development and answer the following questions: Will there be sufficient demand to feasibly support: Transient accommodation (quality hotel, mid market hotel, budget or backpacker accommodation) Staff accommodation Residences for permanent (owner occupier) accommodation Residences for owner occupier holiday accommodation Other uses as proposed, or potentially permissible. In addition, provide advice as to the likely uptake of the proposed development to the extent that this may impact staging from a market demand perspective. It was agreed that CBRE would complete a detailed analysis of supply in Cardrona and the greater Queenstown Lakes District (QLD) area, however, undertake only a high level consideration of supply in the balance of the QLD area. As the proposal is a semi greenfields 14

15 development and is unique, being a proposed largely self-contained and freestanding village with its own infrastructure, supply analysis across the QLD area was not a focus of this study. In terms of determining feasibility, we were to provide our advice from a high level perspective, but with opinions based on thorough underlying research. We acknowledge that the draft objectives agreed between QLDC and MCS are: To ensure that development within the zone has a significantly lesser effect on the outstanding natural landscape of the Cardrona Valley (as compared to the current zoning) To ensure that development is contained and that a defined urban edge is established in order to ensure against sprawl To ensure a high quality mixed use and mixed density development, which provides accommodation for residents, visitors, and seasonal workers in an integrated manner To require best practice urban design principles to be employed throughout To ensure that the MCS land and the existing village develop in a complementary way, which enables a sustainable and integrated community to establish within the valley To provide for and encourage recreational opportunities within the zone and in connection with other development areas in the vicinity To enhance the ecological values of the Mount Cardrona site To recognise and enhance the heritage values that exist within the zone To ensure that infrastructure is provided in an environmentally acceptable manner and where practicable, is co-ordinated with the existing Cardrona village. 2.3 Scope Our scope included: Providing a context for the site (in terms of physical characteristics and location), or setting the scene for the primary demand analysis Investigating current demand - firstly within New Zealand, then to a regional level (QLD) and then down to the specific Cardrona level. Investigations included: Demographics 15

16 Tourism Demand Drivers, including: o Detailed analysis of ski fields o Development of an events calendar and understanding the demand implications of these events o Business o Other Considering Cardrona s point of difference Understanding the likely demand shift - research the potential demand shift resulting from completion of the proposed development and seek to find international comparisons of semi greenfield developments developed in similar ski field locations to determine the demand shift. Apart from a ski field focus as above, we also sought to research other related demand that is self generated from a new settlement of the type proposed. Finally, given the above, we considered the feasibility of implementation of either the existing zone or the proposed plan change. 2.4 Critical Assumption In forming our opinion as to the feasibility of the proposed development, we have assumed the following: We are aware that Transit is unlikely to adopt the Crown Range Road as a State Highway. Our report assumes that the Crown Range Road will remain open to all forms of traffic, including buses, coaches and shuttles, and continue to provide a quality of access at least equivalent to that provided at present. 16

17 3 Methodology 3.1 Introduction Our methodology involved a combination of primary and secondary research, together with reliance on information and insights from within CBRE, to provide a basis for forming an opinion as to the feasibility of the proposed Cardrona development. 3.2 Primary Research CBRE visited Cardrona Valley and locations within the greater QLD and conducted a number of interviews. Specifically, we met with: John Lee, previous owner of Cardrona Ski field and current owner/operator of the Snow Farm Sam Lee, operator of the Cardrona Snow Park Shaun Gilbertson, previous (recent) manager of Cardrona Ski Field and current manager of Southern Hemisphere Proving Ground Duncan Kennedy, CEO of Destination Queenstown Jenny Parker, as a representative of QLDC Duncan Smith, manager of Coronet Peak and Remarkables Ski Fields Richard Hanson, part owner of Treble Cone Ski Field The manager of the Cardrona Hotel We also conducted telephone interviews with: Andy Chapman, current manager of Cardrona Ski Field Chris Read, Manager of Queenstown Airport Debbie Thompson, owner of Back Country Saddles (Horse Trekking) Department of Conservation, Wanaka Office Wanaka Tourism Ben O Malley, Millbrook Development Manager Warrick Kerr and Barry Robertson, Bayleys Real Estate Mark Simpson, Mac Property The objective of these interviews was to gain an insight into the key operational successes and challenges of businesses in the greater QLD, with a focus on Cardrona. 17

18 3.3 Secondary Research Details of the information sources include: 1. Information obtained from interviews with real estate agents, tourism operators, QDLC and Destination Queenstown 2. Statistics New Zealand 3. Research reports completed by third parties, including: a. Wanaka 2020 b. Property Economics 4. Urban Design Study, by R A Skidmore Urban Design Ltd. March Rural Visitor Zone MCS, Yield Assessment, by R A Skidmore Urban Design Ltd. 6. Vehicle movement information (Crown Range Road), provided by QLDC. Sample counts in 2004, 2005 and The Economic Significant of the Southern Lakes Ski Areas 2005 Winter Season. New Zealand Tourism Research Institute. December Regional Visitor Monitor. Angus & Associates Ltd. April Housing Affordability in Queenstown Lakes District. David Mead, Hill Young Cooper and Tricia Austin, University of Auckland. June New Zealand Regional Tourism Forecasts , Lake Wanaka RTO & Queenstown RTO. Tourism Research Council. 11. Southland Visitor Statistics. Department of Conservation. September Snow Park Village. Snow Park NZ. 13. RPNZ Limited Property Database 14. Resort Evaluation Matrix, Ecosign Mountain Resort Planners, Ltd. September Queenstown and Wanaka Growth Management Options Study 16. Queenstown Lakes District Council Long Term Community Council Plan, Queenstown Lakes District Council 17. AMP / Massey University Home Affordability Report 18. QLDC Population Projections 18

19 4 Background 4.1 Location Analysis Cardrona Valley, including the existing Village and Study Area Overview MCS has a spectacular mountain setting, en route between Queenstown and Wanaka and close to a range of existing, predominantly winter focussed, recreational activities. The existing village at Cardrona comprises some 16 hectares of Rural Visitor Zoned land. Existing development is focussed on the western side of the road (and river), although previously there were two historic villages on either side of the river. Current uses (described from North to South) in the village include: Use Recreation Ski Access SUBJECT Ski Access Lodge Church Rural / Lifestyle development Accommodation Short Stay Accommodation Land for development Hotel and Accommodation Short Stay Accommodation Land for development Accommodation Accommodation Rural / Res. subdivision Horse Trekking Comments Monster Trucks. Access to Cardrona Ski Field. Access to subject development. Access to Snow Park, Snow Farm and Proving Ground. Buildings associated with the Proving Grounds. Hot Toddy Lodge. Early character church. Pringles subdivision. 12 lots of 8,000sqm to 8ha in size. Approximately half of the sites are built on. Four proposed owner occupier units. Three accommodation units, apparently with approval for three further units. 4,900 sqms of development land currently for sale. Zoned Rural Visitor Zone. Cardrona Hotel with restaurant and 16 hotel style units. Significant Brand Value for location. Benbrae development. 90 units planned, some completed and sold and some under construction. One, two and three bed configuration. Mostly sold. Potentially a restaurant and bar to be developed. Two vacant development sites (approx. 4,350 and 4,700 sqms) currently for sale. Zoned Rural Visitor Zone. Established residences, together with some flood prone land that is currently being filled and may have further development potential. Cardrona Valley townhouses. Under development. Potentially eight units (duplexes). Proposed subdivision of 6 sites, together with additional development land. Commercial horse trekking business operated from a small farmlet. RGZ Rural General Zone, RVZ Rural Visitor Zone Zoning RGZ RGZ RGZ RGZ RGZ RVZ RVZ RVZ RVZ RVZ RVZ RVZ RGZ RGZ RGZ RGZ 19

20 4.1.2 Proximity to Other Settlements Proximity to nearby villages Village Travel Distance (kms) Travel time (mins) Travel Distance from Queenstown (kms) Wanaka Arrowtown Queenstown Cromwell Proximity to Infrastructure The proximity of Cardrona to key infrastructure and facilities is summarised as follows: Proximity to infrastructure and facilities Facility Travel Distance (kms) Airports Wanaka Airport 29 Queenstown Airport 39 Ski Facilities (to ski carpark) Cardrona Ski Field 14 Snow Farm/Park 14 Treble Cone Ski Field 53 Coronet Ski Fieled 51 Remarkables Ski Field 55 Walkways Roaring Meg 0.5 Cardrona River (potential) 0.5 Golf Courses Millbrook 35 Kelvin Heights 46 Wanaka Golf Club 24 Lakes / Boating Lake Wanaka 24 Lake Hayes 33 Wanaka Library 23 Schools Primary 24 Secondary 26 Queenstown Events Centre 38 Wanaka Events Centre 24 Conference Facilities Wanaka 20 Queenstown 39 Commercial Facilities / Services Wanaka 25 Queenstown 44 20

21 4.1.4 Roading Connections The Crown Range Road/Cardrona Valley Road creates the main axis through the valley and the main focus for existing and proposed development. We note: Being a main traffic route, Cardrona Range Road effectively operates as a through road The existing roading/parking layout in the existing Cardrona Village is not particularly well suited for passing vehicles wanting to stop and use local facilities Typical vehicle movements per week in both directions range between 9,000 and 12,000. Interestingly, vehicle movements appear to be broadly consistent through winter and summer months. The other key roads in the area include the main access road to Cardrona Ski Field which is located some two kilometres to the north of the existing village and alongside MCS RVZ, while the access road to the Snow Farm, Snow Park and the Proving Grounds is immediately opposite. 4.2 Site Analysis Study Area Site Attributes is a large land holding. The study area including the existing RVZ: Has well formed access off the Crown Range Road, almost opposite the entry to the Snow Farm and Snow Park access road Generally rises moderately some metres above the Crown Range Road to a large naturally terraced area that rises some metres over a distance of some two kilometres, to the foot of Mount Cardrona Has an easterly aspect, overlooking the Cardrona Valley and toward Mount Pisa Enjoys early morning sun and is sufficiently to the east of Mount Cardrona so that it does not lose the sun in the afternoon in winter until approximately 3:00 4:00pm Is approximately two kilometres north of the existing Cardrona Village (Cardrona Hotel), being a walkable distance 21

22 The following photographs illustrate the site and surrounds: Cardrona Valley, western view Mount Cardrona Station Mount Cardrona Station, plateau Resource Management Overview Approximately 16.2 hectares of land (some 15 ha of which is owned by MCS) on the subject site is zoned Rural Visitor Zone, being a zone that enables relatively flexible development including visitor accommodation to a relatively high density. The Rural Visitor zoned land is currently located close to the Cardrona Valley Road and is some two kilometres to the north of the existing Cardrona Village (also Rural Visitor Zoned land). 22

23 As part of a strategic planning exercise for the entire District, in December 2003 the QLDC co-ordinated a workshop with local residents of Cardrona to set out a community vision, strategic goals and priorities for the next 10 to 20 years for the Cardrona community. The resulting Cardrona Community Plan was endorsed by the Council and provided key community outcomes for Cardrona Valley. This plan recommended shifting the location of the Rural Visitor Zone located on MCS on to the terrace above Cardrona Valley Road and identified the need to create a linkage between the two Rural Visitor Zoned locations. The current owners of MCS were approached by QLDC to initiate a Plan Change to relocate the boundaries of the Rural Visitor Zoned land on MCS and improve the basis of the zone to ensure an appropriate mix of uses, incorporating permanent residential housing, visitor accommodation, worker housing and ancillary small scale commercial amenities. 4.3 Population Profile The following table presents a high level analysis of the surrounding population profile. Please note that the population estimates summarised in this section (based on Statistics New Zealand figures) relate to a catchment area that is slightly larger than the catchment area used for the dedicated QLDC population numbers. A detailed analysis can be found in Section Six of this report. Population 2001 Ave. HH Income Cardrona 66 $29,809 Wanaka 3,750 $49,604 Queenstown 11,949 $58,149 Source: Statistics New Zealand The 2001 census reported 66 usual residents in Cardrona Valley. Reflecting the rural and mountainous nature of the valley, the average household income is low; close to $30,000 pa. The greenfields nature of the existing Cardrona Valley makes it difficult to forecast population with any confidence. In contrast, the wider Wanaka region is forecast to have around 5,200 people by 2006, representing a 39% increase over the 2001 census. The average household income for this area was just under $50,000 pa. Queenstown had a 2001 usually resident population of around 12,000 people. Over the five years to 2006 this is forecast to 23

24 increase to 13,000, representing 9% growth over the period. The average household income is the highest amongst our comparables at just over $58,000 pa. 4.4 Key Findings Cardrona is located in a spectacular mountain environment with excellent proximity to a range of winter activities. It is en route between two larger and established townships, Queenstown and Wanaka. The current usually resident population of Cardrona is 66. As at the date of this report there are approximately 100 to 105 units (including owner occupier units, hotel rooms and short stay accommodation units), with further units currently under construction. At present the amount of development in Cardrona is limited and, as such, the village relies heavily on the surrounding winter activity, with comparatively limited existing summer attractions. The lack of development at Cardrona also means that any skiers or workers in the valley predominantly travel from Wanaka and Queenstown. Nevertheless, within a minute drive, there are a wide range of summer and further winter activities as well as commercial and township amenities. The site provides excellent opportunities for the development of a mixed use zone. The current Cardrona Village is located on a busy through road with development focused on the western side. The greenfields nature of the existing village and the lack of development makes it difficult to forecast population growth with any confidence. The average household income of the existing Cardrona Valley population is materially below both Wanaka and Queenstown. 24

25 5 Development Potential and Site Capacity 5.1 Overview The study area (which comprises the existing MCS Rural Visitor Zone and the area proposed for the new zone under a proposed plan change) is a substantial land holding located at the base of Cardrona Ski field and with frontage to Cardrona Valley Road. The following plan illustrates the Study Area (provided August 2006): The primary difference between the implementation of a plan change and that that would be permitted under the existing zone, is that under the existing zone, development would have been clustered in a smaller area closer to the ski access road; an area with largely inferior topography and slightly further from existing development in Cardrona. The current proposal encapsulated by the plan change utilises the elevated terraced area of the site with better connection to the existing village. It is less visible from the Crown Range Road than development that would occur in the RVZ. 25

26 5.2 Site Capacity / Building Typology R.A. Skidmore Urban Design Limited have undertaken a yield assessment report for the existing zone and plan change are which estimates that the plan change would provide a mix of low to high density development and would provide capacity for around 1,000 units. The following table provides a comparison of the existing Cardrona Village, the existing use rights and proposal at MCS. Cardrona Type Village Existing Zone Plan Change Scenario 1 Scenario 2 Visitor Accommodation , * Residential Total , * includes high density residential Additional development capacity - may be over stated due to the inclusion of potential development on a floodplain Source: RA Skidmore Urban Design Ltd Based on the existing zone provisions, it is estimated that the existing Cardrona Village has additional capacity of around 574 units. It is noted that this capacity relates to a village with limited infrastructure in terms of services such as sewage disposal, a lack of integration of uses, somewhat fragmented development to date, roading issues with a major arterial route bisecting the development and flood plain areas, particularly off the eastern side of the Crown Range Road. To put the potential development of the existing zone at MCS into perspective: The Jacks Point development is expected to provide approximately 650 residential units in the short term, provided by way of primarily low density development, however, the overall development is likely to provide a total capacity of 2,375 units with one dwelling per 1.9 hectares. The Kawarau Falls development is likely to provide some 1,100 units within 15 precincts with a very strong focus on tourism accommodation and with development generally to a high density. The total land area is 4 hectares. The Peninsula Bay development in Wanaka provides for approximately 400 low density residential lots at a density of one unit per 5.3 hectares. The Remarkables Park Zone for integrated development with the potential to accommodate 1,800 units. 26

27 The Benbrae development will on completion provide 90 visitor accommodation units; 40 are already complete and sold and 27are sold subject to completion. This development reflects a density of 157 units per ha. 5.3 Key Points The yield from the existing zone is between 824 and 1,400 units. The plan change proposes approximately 1,000 units. The existing village currently provides some 100 to 105 units (as at the date of this report) with potential for a further approximate 574 units. 27

28 6 Residential Analysis 6.1 Overview This section provides an overview of the population profile using the 2001 and 2006 census, the forecast resident population by QLDC (out to 2026), a high level analysis of affordability issues, the proportion of absentee owner sales (domestic and international), as well as Cardrona s future property supply. The section concludes with the potential demand from residents. 6.2 Catchment Methodology In order to profile the population living in and around Cardrona, it is necessary to define geographic regions. A number of factors determine a locality catchment area. include: These The site attributes and building typology The accessibility of the site through the roading network Geographical constraints that act as barriers The network of competitive facilities. Section 4 of this report provides an overview of the material site attributes including its easterly aspect, distance from the existing Cardrona Village and surrounding ski fields and facilities, the site s proximity to other settlements and key infrastructure and facilities as well as providing an outline of the roading infrastructure. Earlier in this report, we have provided an overview of development potential and site capacity within MCS. There are geographical constraints to the site s catchment area from the surrounding mountainous terrain. This results in areas of very little or no population over significant tracts of land within what otherwise would serve as Cardrona s potential catchment area. Another factor influencing the shape and extent of the chosen catchment areas is the boundaries of the spatial units on which the census population data is based. Area Units are the most convenient spatial statistics unit for the analysis of the various catchments demographic characteristics as they are the smallest statistical units for which Statistics NZ produces population forecasts. However, in the case of Cardrona, the sparseness of the population outside the main urban areas means that Area Units are too large to provide a suitable basis for our analysis. Therefore, we used the smallest units for which Census 28

29 Demographic and Socio Economic data is available. These units are called Meshblocks. The catchment area boundaries reflect meshblock boundaries, which in some cases distorts the shape of the catchment area. This, in our opinion, does not have a material impact on the study. For the purpose of profiling various catchments, we have provided three catchments within the wider Cardrona locality: Cardrona - Encompassing MCS and the Cardrona Valley from approximately the base of the Crown Range, north to the outskirts of Wanaka Wanaka Including both the urban and rural outskirts of the Wanaka Township. It extends east to include the townships of Luggate and Albert Town Queenstown - Including the core Queenstown and Frankton townships and their growing periphery. In addition it includes Arrowtown and Lake Hayes. The following map provides an outline of the various catchments used in the preceding and forthcoming population profile. 6.3 Population Analysis This section primarily deals with the historic population levels of the catchment areas as well as the key socio economic characteristics of this population. The basis of the information is Statistics New Zealand s (SNZ) 2001 Census. We then use SNZ census 2006 provisional results to analyse the potential growth in the market from 2001 to

30 Lastly, we project the permanent population out to 2026 using QLDC population forecast Current Usually Resident Population Profile The following table provides a snapshot of the usually resident population from the 2001 census for Cardrona, Wanaka and Queenstown. Main Catchments Total Main New Cardrona Wanaka Queenstown Catchment Area Zealand POPULATION 66 3,750 11,949 15,765 3,736,551 Catchment % of Total Trade Area 0% 24% 76% No OF HOUSEHOLDS 24 1,623 4,824 6,471 1,367,937 HOUSEHOLD DENSITY AGE DISTRIBUTION % 18% 18% 18% 23% % 6% 6% 6% 7% % 12% 19% 18% 13% % 14% 21% 19% 15% % 29% 24% 25% 26% 60+ 9% 21% 12% 14% 16% Average Age ETHNICITY European 95% 94% 88% 89% 74% Maori 5% 3% 6% 5% 14% Pacific Islander 0% 0% 1% 1% 6% Asian 0% 2% 5% 4% 6% Other 0% 0% 0% 0% 1% HOUSEHOLD INCOME loss 0% 0% 1% 0% 0% 0-$10,000 0% 4% 3% 3% 6% $10,001-$20,000 25% 17% 9% 11% 18% $20,001-30,000 0% 19% 14% 15% 15% $30,001-$40,000 0% 13% 12% 12% 11% $40,0001-$50,000 25% 12% 13% 12% 10% $50,0001-$70,000 25% 20% 20% 20% 16% $70,0001-$100,000 0% 8% 16% 14% 11% $100, % 6% 13% 12% 12% Average income $29,809 $49,604 $58,149 $55,901 $49,395 % variation from NZ average -40% 0% 18% 13% HOUSING STATUS Own with/without mortgage 38% 55% 48% 50% 63% EMPLOYMENT Full Time 75% 48% 65% 61% 47% Part Time 6% 18% 13% 14% 14% Unemployed 6% 2% 2% 2% 5% Not in Labour Force 13% 32% 20% 23% 33% Source: Statistics NZ, CB Richard Ellis 30

31 Age Structure 35% % of Population in age group 30% 25% 20% 15% 10% Cardrona Wanaka Queenstown New Zealand 5% 0% Age Groups Source Statistics NZ, CB Richard cbre $70,000 Average Household Income $60,000 $50,000 Combined Cardrona/Wanaka/Queenstown New Zealand Income $40,000 $30,000 $20,000 $10,000 $0 Cardrona Wanaka Queenstown Source Statistics NZ, CB Richard Ellis Catchments cbre The salient points from this demographic profile are: In 2001 there were 66 usually resident people in Cardrona Valley and 24 households. This low population base means that it is difficult to develop growth forecasts for the Valley. Household densities are typically lower in Wanaka and Queenstown than the national average (2.4 compared to the national average of 2.7). People living in Wanaka are typically older than the New Zealand average, while Queenstown residents are slightly younger. There are a comparatively large number of households in the $50,000 to $70,000 income bracket. This may reflect the fact that 31

32 the proportion of people aged 15 to 59 (working age) in the Main Catchment Area (Cardrona, Wanaka and Queenstown) was 68%, compared to the national average of 61%. There are significantly fewer young persons (who are typically non income earners) in the Main Catchment and slightly fewer retirees (who are typically low and fixed income earners). There are proportionally more people employed full time in Queenstown than the New Zealand average, and around the same proportion of part time employees. In the same market there are proportionally fewer people not in the labour force. Wanaka is closer to the national employment profile than Queenstown. However, there are slightly more people employed, either full or part time, than the national average Census 2006 The 2006 Census was undertaken in March of this year and full results are expected early At the time of writing this report, SNZ has released provisional census night counts. Census night counts are different from the usually resident population this report uses. Census night statistics are the number of people in an area on census night, and include permanent residents, visitors and transients. The usually resident population includes people who normally live in an area, whether they are present on the day of the census or not. The Census 2006 provisional census night counts follow: Census Night Population Area Unit (Provisional) Hawea 1,032 1,308 1,900 Frankton 1,350 1,740 1,770 Wanaka 3,303 4,422 6,440 Glenorchy Kelvin Heights ,030 Sunshine Bay 1,965 2,310 2,780 Wakatipu 1,245 1,713 2,770 Lake Hayes Matukituki Arrowtown 1,542 1,833 2,310 Queenstown Bay 3,354 4,713 6,040 Queenstown Hill 4,011 4,737 5,800 QLD 19,821 25,146 32,400 Wanaka includes the existing Cardrona Village The salient points from this table include: Cardrona is included in the Wanaka Area Unit. 32

33 In 2006, the census night population way 32,400. This represents a comparatively strong increase of 29% from 2001, similar to the 27% increase between 1996 and In contrast, the New Zealand 2006 census night population growth rate was 7.8% and the South Island growth rate was 6.8%. The largest proportional increases between 2001 and 2006 were in Wakatipu, Hawea and Wanaka, which includes the existing Cardrona Village Projected Resident Population This section details the forecast population growth from 2005 to We understand QLDC projections are the product of detailed research into the QLDC market, including the Queenstown and Wanaka Growth Management Options Study. This was a report prepared for QLDC by Hill Young Cooper Ltd which addresses, among other issues, population projections. More recently, we understand Rationale Ltd updated these projections for QLDC as of early However, we understand that these projections are primarily based on past growth patterns, and don t take into account development rights associated with existing zoning. Due to the limited growth in the Cardrona Valley in the past, the projections do not forecast significant growth in the area moving forward. We consider the QLDC projections to be the most appropriate to use in this report as they have been generated from significant local research and have been adopted by QLDC. 45,000 Population Projections 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, Regional Catchment Population Queenstown Wanaka CBRE 33

34 Regional Catchment Population 19,352 24,628 30,231 35,947 42,261 Queenstown 9,949 12,435 15,221 18,571 22,681 Wanaka 4,248 5,685 7,249 8,427 9,915 Other 5,155 6,507 7,761 8,948 9,666 Please note that the catchment area utilised in the QLDC forecasts varies slightly from the catchment area associated with the statistics NZ population figures. Hence the slight difference between the above figures and those referred to in Section 4.3. The salient result from this projection is that by 2011 QLDC forecast 24,600 residents. This is forecast to increase to 42,300 people by This represents 118% growth between 2006 and 2026, which compares to the NZ average growth of 14% over the same period Key Findings There has been strong permanent population growth in the District since The population has a high proportion of above average incomes and high employment levels QLDC is expecting strong resident population growth over the next 20 years, with an additional 23,000 people or approximately 9,300 households. This is more than double the current estimated population of 19,000 permanent residents. These projections are based on past growth and do not consider potential growth resulting from implementation of existing zones. Low household densities (number of people per residence) in the District. We reiterate that due to the existing very small population of Cardrona Village (66 usually resident population), is very difficult to draw conclusions about future population growth in the greater Cardrona area. In relation to the study area, it is clear that we are considering a new, integrated village, which, if appropriately developed, will likely create a short term shift in demand and then a more moderate population growth profile. 6.4 Homeownership / Affordability Homeownership The Housing Affordability in Queenstown Lakes District report (June 2004, prepared for QLDC), provides a detailed analysis of 1 Source: Statistics New Zealand, Population Projections - Medium 34

35 homeownership in the District. percentage of homeownership in the QLD. The following table identifies the Owned without mortgage Owned with mortgage Urban Area Queenstown Urban Area 21% 22% 29% 27% Wanaka 40% 46% 23% 30% Queenstown Lakes District 29% 30% 30% 29% New Zealand 32% 32% 37% 35% Source: Housing Affordability in Queenstown Lakes District The salient points from this table are: The largest movement in terms of tenure between 1996 and 2001 was an increase in the proportion of houses in Wanaka occupied by owners without a mortgage. This trend may be related to the larger retirement segment and or a greater proportion of second / holiday homes in Wanaka. In the Queenstown Urban Area, the homeownership rate fell slightly from 50% to 49%. Homeownership in QLD is lower than the New Zealand average Affordability In 2001, the New Zealand homeownership rate, with or without a mortgage, was 63%. This compares to 59% for QLD. Housing affordability is becoming an increasingly important issue in New Zealand. Material house price inflation and only moderate wage inflation has resulted in an increasing proportion of households finding it tough to afford reasonable housing options. QLDC commissioned a report into the nature and scale of the housing affordability problems facing its district in 2004; Housing Affordability in Queenstown Lakes District prepared by David Mead, Hill Young Cooper Ltd and Tricia Austin, University of Auckland. The salient issues from this report are: Housing is considered affordable if a household can access adequate housing by spending a maximum of 30% of their gross income. There is relatively little government provision of affordable housing in the district. Housing New Zealand has 14 houses in Queenstown and 6 in Wanaka. The property market grew significantly between 2001 and o Section prices increased from an average $110,000 to $240,000 (40% per annum) 35

36 o House prices increased from an average of $200,000 to around $400,000 over the same period, (33% per annum) Lower priced sections are close to average section values, implying no or limited cheap purchase options. In 2001, most households were able to pay the mortgage on an average priced home based on a one-and-a-half income household. In 2003, a double income (minimum) was expected to be required to meet mortgage payments. This is a material shift in a very short time frame and we do not believe this trend to have reversed over the past three years. We note that since 2003, property value increases have continued to outstrip wage increases placing further pressure on housing affordability. In fact, as at June 2006, the average house sale price in Queenstown is $600,000 which is around twice what it was five years ago. The AMP/Massey Home Affordability Index indicates Central Otago Lakes is the least affordable region in New Zealand, leading Auckland. Central Otago Lakes (including Queenstown and Wanaka) regional affordability is 153% more than the New Zealand average. That is, given the relativity of income levels, the median dwelling price and mortgage interest rates, buying a home is 53% more unaffordable in QLDC than the national average Key Findings Wanaka has a comparatively high homeownership rate without a mortgage while Queenstowns is comparatively low. Both Queenstown and Wanaka have comparatively low proportions of homeownership with a mortgage. Limited housing affordability and a commensurate low proportion of home ownership in the district. The plan change provides an opportunity to embrace the QLDC affordable housing strategy with particular focus on providing employee housing for workers within Cardrona Valley. The Queenstown Lakes District is the least affordable area in the country. 6.5 Absentee Owners Overseas Absentee Owner Profile Based on anecdotal evidence, we note the following trends. 36

37 Proportion of Overseas Absentee Buyers The proportion of overseas buyers varies between real estate products. Overseas purchases of lifestyle property represent between 20% and 25% of all acquisitions in QLDC. The proportion of overseas purchasers of apartment or terraced housing is between 15% and 30% (but typically in the 20% to 25% range) of all acquisitions in QLDC Origin of Overseas Absentee Buyers Overseas purchases originate from a diverse range of countries including Australia, Asia, UK, US and the Middle East. An active subpopulation of this market is expatriate New Zealanders who typically come from the UK, but also Asia Purchaser Considerations Most overseas purchasers are buying for lifestyle reasons, and hence the high proportion of acquisitions in the lifestyle block market. They are buying on the expectation that activities such as golf and skiing are readily accessible and available and are enticed by the natural landscape and environment. They typically purchase either an improved lifestyle section (which could be part of a larger community estate), or centrally located apartment. Lifestyle section sales are typically to high net worth individuals who view the property as their second or third home. It is unlikely to be their usual residence. Prices range from $1 million to around $2 million. Apartment sales are at more moderate price levels and are typically of serviced apartments with on site managers and limited owner occupier use rights Developer Marketing Local developers are maturing. Consequently they are building up purchaser contact databases and forming relationships from which there are a material number of initial sales. Many of these contacts are overseas investors who have bought in previous developments and have made a capital return substantial enough to warrant further investment with this developer. The key driver here is the relationship formed between the developer and purchaser. 37

38 6.5.2 Domestic Absentee Owner Profile Origin of Domestic Absentee Buyers 75% of sales are to locally domiciled residents, including QLD residents. Key New Zealand markets include Auckland, Otago and QLD. Auckland is the key domestic absentee owner market, representing around 40 to 50% of sales. Aucklanders typically buy in and around Queenstown. Dunedin and Southland is a small but important absentee owner market. Wellington is not an established market, however, interest is growing and sales may reach 5 to 10% in the near term. Christchurch is not a key QLD market, however, those Christchurch residents who purchase in the area, typically buy in greater Wanaka rather than Queenstown Purchaser Considerations Domestic absentee buyers have a similar purchase profile as their overseas counterparts, typically purchasing lifestyle or apartment properties Key Findings Absentee owner purchases focus on lifestyle property and apartments. Sales to overseas purchases account for around 20%-25% of all sales in QLD. Absentee owners from within New Zealand, primarily from Auckland and Otago, account for around 40%-55% of total sales in QLD. In total, overseas and New Zealand absentee owners account for 60%-80% of total sales in QLD. Given the above, permanent residents account for 20%-40% of sales. 6.6 Property Supply Cardrona The existing supply in Cardrona is referred to in Section on Page 19 of this report. Generally, it is a small community with: Approximately 52 short stay units and 16 hotel rooms existing owner occupier houses, including a mix of lifestyle property, modern units and traditional residential housing 38

39 Three development sections are currently for sale, which are all zoned Rural Visitor. The total area is some 1.3 to 1.5ha An additional area of land within the flood plain area (eastern side of road) is currently being filled, potentially for future development There are still some undeveloped (approximately 6) sites within the Pringles Creek subdivision and further small scale rural/residential subdivisions proposed. Snow Farm has lodge accommodation for around 70 people, on site, in units ranging from bunk share to apartment style. Snow Park is currently constructing 24 apartment units. These are likely to be sold down to investors with a management pool in place. In addition, Snow Park are developing a 50 bed, low-income, shared style accommodation and restaurant block. In the future, Snow Park has plans to extend their accommodation capacity. Cardrona Ski field has on-site accommodation for 8 people. Referring to the Rebecca Skidmore report, we understand that the total capacity on the basis of residential units, within Cardrona Village is 574 units, which is a relatively small capacity compared to other major development within the Queenstown Lakes District, as referenced in the table relating to dwelling capacity in Section 6.7 of this report Key Findings Current development within the Cardrona Valley is a mix of short stay and owner occupier accommodation, although short stay accommodation is likely to grow at a faster rate in the medium term. Less than 25% of the capacity of the existing Cardrona Village (as per the Urban Design Study) has been developed. 6.7 New Residential sections and Apartment Absorption We have undertaken analysis of first time sales of residential land (<1 hectare) and apartments constructed between 1980 and 2005 in the area highlighted below: 39

40 The graph below illustrates all new land and apartment sales in the area since New Section and Apartment Sales N o. of Sales Queenstown Wanaka Cromwell Cardrona Total Source: RPNZ Key Findings The majority of development has occurred in the Queenstown area; however, there has been a significant increase in development in the Wanaka and Cromwell areas over the past 5 years. As a consequence, during the last five years, Queenstown s market share of the main catchment area has declined. Wanaka had 657 sales over the past 5 years to 2005 or 26% of the total. Cromwell had 356 sales. over the past 5 years to 2005 or 14% of the total. 40