Couch surfing and sleeping in vans: New Zealand’s housing crisis grips Queenstown

Tourist hub plagued by lack of homes, surging rents and traveller influx provides ‘starkest’ picture of country’s property crunch

When Merlin Traçable finishes work at a ski rental shop in Queenstown, New Zealand, he looks for a place to park his van.

Traçable, a 26-year-old from France on a working holiday, won’t be pulling up near his home. He doesn’t have a house, just a van, a winter sleeping bag and a blanket – currently Traçable’s only antidotes to temperatures that dipped to -4C a few nights ago.

“It is like a little joke between us,” he says of the dozens of other people he says sleep in their cars and vans in the high-end resort town that graces most of New Zealand’s tourism brochures. “We are the homeless people of Queenstown.”

It’s not that Traçable can’t afford a home, although it is expensive. It’s that he can’t find one.

“The big problem is the shower and the kitchen,” Traçable says of his van life. “You can go to the gym or the hostel, but it is not convenient.”

Merlin Traçable. Photograph: James Allan/The Guardian

Queenstown, a picturesque town in New Zealand’s southern alps, is in the grip of a housing crisis, with a lack of available housing and surging rents. Visitors from around the world are drawn to its ski fields and summer adventure sports, with the stream of workers needed to power the tourism sector exacerbating a housing shortage. New rental regulations and the surge of international travellers and workers following the reopening of New Zealand’s borders after the pandemic have deepened the problem.

A waitlist for affordable housing that normally grows by about 100 households a year increased by more than 200 in May and June. Businesses, already stretched by the lean years of Covid, are forced to buy properties to house employees or risk losing them.

“It’s the sort of archetypal problem that we’ve got right throughout New Zealand, which was not building enough affordable houses for people to live in places where the populations have been growing,” says Arthur Grimes, a senior fellow at Motu Economic and Public Policy Research Trust.

“Queenstown is just the starkest example of that.”

Rental prices surge

New Zealand housing stock is extremely expensive, says Grimes, pointing to the 50% increase in house prices between 2016 and 2021. The average cost of a home in New Zealand is about NZ$900,000 ($555,000/£435,000), compared to a little under NZ$600,000 in the UK.

While the nation’s house prices slumped about 13% in the 12 months ending in April, Queenstown’s prices grew slightly. The Queenstown area, which also encompasses Wanaka and Arrowtown, recently recorded the biggest increase in rental prices in the country, spiking at almost 20% in the 12 months ending in March. The median weekly rent is $700, second only to an affluent harbour enclave in Auckland.

People shop in central Queenstown. Businesses are struggling to retain staff as housing affordability worsens.

Photograph: James Allan/The Guardian

Construction in Queenstown has mostly kept up with population growth, but many houses are unaffordable and built for holiday homeowners, according to Benje Patterson, a local economist. More than 25% of homes were listed as unoccupied in the most recent census in 2018. This figure could now be higher due to a series of “well-intentioned policies” designed to protect tenants which have disincentivized landlords to list their properties as long-term rentals, says Patterson.

Rental properties for long-term tenants must now meet much higher standards, such as for heating and insulation, that do not apply if a property is listed as a short-term holiday rental on platforms like Airbnb. It’s also more difficult to remove a long-term tenant, even at the end of a fixed term, so holiday homeowners who once rented out their Queenstown properties for several months each year when they weren’t using them are now thinking twice, says Patterson.

“People are deciding: ‘Oh, look, I’m just not going to rent [my second home] for those eight or 10 months of the year because I don’t want to ... risk giving up my summer if the tenant won’t leave,” he says.

The new standards and rental regulations were drawn up alongside public consultation, research and analysis, according to a statement from the ministry of business, innovation and employment.

Businesses are adding more strain to the housing market. Increasingly, firms lease and buy properties to secure housing for employees, says Sharon Fifield, chief executive of Queenstown Chamber of Commerce. Given the capital outlay involved, she says some smaller businesses are housing employees in their own homes.

Living with ‘constant worry’

Hannah Sullivan co-founded the Queenstown Housing Initiative after she spent months looking for a rental property – and she still hasn’t found one.

“The people that can make a difference are not quick enough,” the 30-year-old says. “This is a critical situation.”

A local community housing trust that helps residents looking for affordable homes has 950 households on its waitlist.

Sullivan says the Queenstown Lakes district council could provide a temporary shower block for those sleeping in cars or turn vacant, council-owned housing into short-term accommodation to avoid expensive repairs required for the properties to meet the new long-term rental standards. The council is offering discounted showers at its event centre and exploring options to connect potential boarders with residents who have spare rooms.

A spokesperson for the ministry of housing and urban development says a joint action plan on the affordable housing supply in the Queenstown area is almost complete and that approved building consents for homes in the district are at 28 per 1,000 residents, compared with the national average of 10 per 1,000.

The local council started the Queenstown Lakes community housing trust in 2007 to support long-term residents with affordable rentals and ownership. However, it has a waitlist of 950 households – about 5% of the area’s 20,000 households.

Construction works surround the council-owned Lynch Block cabins in Queenstown. Photograph: James Allan/The Guardian

The trust aims to help people like Mel Castle, a 36-year-old Canadian and Wanaka resident of seven years, who is by definition homeless. She had to leave her rental in May after three years. Two housesitting gigs have been all that panned out after applying for dozens of homes.

“There is a constant worry that I can’t really pinpoint,” says Castle, an office manager who recently got her New Zealand permanent residency. “I’m in a safe environment. I’m not being harmed or anything, [but] it is not like I can plant a garden.

“You are not walking on eggshells, but you are in a sense,” Castle says. “At what point do you decide to jump ship and find solace somewhere else?”

This article was originally published on The Guardian. Its inclusion on this website is solely for education purposes.