The Property Market That Left Sydney and Melbourne Behind
- Kieran Trass
- 1 hour ago
- 5 min read
Queenstown-Lakes has delivered more than twice the cumulative capital growth of either Sydney or Melbourne since the early 1990s.
Sydney and Melbourne are routinely held up as two of Australasia’s great property wealth stories.
The numbers support that reputation.
But put them alongside Queenstown-Lakes and something remarkable appears.
Our analysis of the REINZ House Price Index shows that from January 1993 to January 2026, Queenstown-Lakes residential property values increased approximately 13.3 times.
Extending CoreLogic/Cotality’s Australian dwelling-value series from the early 1990s through to July 2026 gives an approximate comparison.
The periods and methodologies are not identical, so this should be treated as a long term scale comparison rather than a perfectly matched index.
But the size of the gap is hard to dismiss.
Queenstown-Lakes has delivered around 2.3 times Sydney's cumulative capital growth and 2.5 times Melbourne's.
The real story is compounding
The difference becomes clearer when expressed as an annual growth rate.
Across the 33 years to January 2026, Queenstown-Lakes recorded a Compound Annual Growth Rate (CAGR) of approximately 8.2%.
The comparable long term rates are approximately:
Sydney: 5.2%
Melbourne: 5.0%
Three percentage points a year may not sound enormous.
Over three decades, it is.
Each year’s growth compounds on everything that came before it. The result is that a market growing at around 8% does not finish merely a little ahead of one growing at 5%.
It can finish more than twice as far ahead.
That is exactly what the Queenstown-Lakes record shows.
Queenstown has not simply followed New Zealand
This is not the result of one extraordinary boom.
The Staircase analysis examined 33 January-to-January periods between 1993 and 2026.
Queenstown-Lakes recorded house price growth in 27 of those 33 years.
There were corrections and periods when prices fell, but historically they have been relatively infrequent compared with the number of rising years.
The most recent property cycle has provided another example.
When New Zealand experienced its major housing correction following the 2021 peak, the national REINZ HPI fell 13.9% in the year to January 2023.
Queenstown-Lakes was still 4.3% higher over the same period.
Then came further growth.
In the year to January 2026, Queenstown-Lakes rose another 9.0%.
And the strength has persisted. The more recent REINZ data shows Queenstown-Lakes was still 8.0% higher over the year to July 2026, while New Zealand overall was 0.4% lower.
That is now several years of significant divergence from the wider New Zealand market.
Past performance cannot tell us what happens next.
But more than three decades of evidence tells us Queenstown-Lakes has not behaved like an ordinary regional property market.
Why has Queenstown been different?
There is no single explanation.
Queenstown combines several characteristics that rarely occur together.
Limited land
The physical footprint is constrained by mountains, lakes, conservation areas and infrastructure requirements.
New housing can be created, but desirable developable land is neither unlimited nor inexpensive.
A buyer pool far larger than its resident population
Queenstown property demand does not depend solely on households earning Queenstown wages.
Its buyers include local residents, New Zealand investors, lifestyle purchasers, holiday-home owners, Australians and internationally connected high net worth buyers.
That gives a relatively small district access to a much larger pool of capital.
An international visitor economy
Over the past three decades Queenstown has evolved from a small New Zealand resort town into one of the Southern Hemisphere’s best recognised visitor destinations.
Tourism, accommodation, hospitality, transport and major infrastructure investment have expanded alongside the resident population.
Property therefore sits at the intersection of a housing market, lifestyle market and international visitor economy.
Scarcity
Not every Queenstown property is scarce.
Generic apartments, townhouses or subdivision stock can still face competing supply.
But genuinely well located property in places that cannot easily be replicated has a scarcity characteristic that becomes increasingly valuable as demand expands.
That distinction is particularly relevant in Queenstown.
Why compare it with Sydney and Melbourne?
Because these are not weak benchmarks.
Cotality’s original 30-year study found Sydney dwelling values increased 449% between July 1992 and July 2022, while Melbourne increased 459%. Those figures run to July 2022. Melbourne dwelling values then fell about 6% in net terms between July 2022 and July 2026, which is why its long term multiple sits slightly below where the 30-year study left it. Queenstown-Lakes and Sydney both rose over the same four years.
Those are exceptional long term results.
The point is therefore not that Sydney and Melbourne performed badly.
Quite the opposite.
Queenstown-Lakes has produced considerably stronger long term capital growth even when compared with two of Australasia’s most successful and valuable residential property markets.
That makes the comparison much more interesting.
And for Australian buyers, there is another advantage
Australian citizens can generally purchase ordinary New Zealand residential or lifestyle property without applying for Overseas Investment Office consent, although separate rules can apply where land is otherwise classified as sensitive.
New Zealand also has no residential stamp duty.
So an Australian considering Queenstown is not simply looking at a property market with a remarkable historical capital-growth record.
They are looking at a market they can access relatively easily, in a country they already know well, only a direct flight from Sydney, Melbourne and Brisbane.
That combination is unusual.
The current price comparison is interesting too
Despite Queenstown-Lakes' extraordinary historical growth, its January 2026 median house price was NZ$1.72 million.
Domain reported Sydney's median house price at approximately A$1.76 million in the December 2025 quarter.
These are different currencies and slightly different measurement periods, so they should not be treated as directly interchangeable.
But they provide useful context.
Queenstown has delivered substantially greater long term percentage capital growth while its headline median price remains in broadly the same nominal price territory as Sydney.
For an Australian investor, that is an interesting comparison.
This does not mean every Queenstown property will perform equally
A district-wide growth record is not a guarantee for an individual property.
Queenstown-Lakes includes everything from premium lakefront homes and tightly held residential areas to apartments, townhouses and large new subdivisions.
Future performance will depend on factors including location, scarcity, price, rental demand, competing supply, visitor accommodation rules, body corporate costs and the quality of the individual asset.
The history tells us something about the market.
Investment performance still depends on what you buy within it.
More than three decades is difficult to dismiss
Property markets are often discussed as though an entire country has one housing market.
It does not.
Markets respond differently to land supply, population growth, infrastructure, credit conditions, tourism, wealth and the depth of their buyer pool.
Queenstown-Lakes is an unusually clear example.
Since the early 1990s:
Queenstown-Lakes: 13.3×
Sydney: approximately 5.7×
Melbourne: approximately 5.3×
That equates to a long term compound annual growth rate of approximately 8.2% for Queenstown-Lakes, compared with around 5.2% for Sydney and 5.0% for Melbourne.
And Queenstown is not relying solely on history.
Annual REINZ HPI growth was 9.0% to January 2026 and remained 8.0% to July, despite much of the New Zealand housing market continuing to struggle for momentum.
Nobody knows whether Queenstown will repeat the extraordinary growth of the past three decades.
But one conclusion from the historical data is difficult to avoid:
Queenstown-Lakes hasn't merely beaten the New Zealand property market. Over the long run, it has left Sydney and Melbourne well behind.
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