Holiday spot and snow-sport hub Queenstown should have been set to reach a new peak in its property market in 2010 according to typical property cycles.

But the impact of the credit crunch means that property in the popular holiday destination won’t head up to the high expected until at least 2015, new research from Colliers says.

“Over the last four decades, Queenstown’s property cycles have measured between seven to nine years from peak to peak and trough to trough,” Colliers market report said.

Queenstown’s peak years for sales volumes being 2003, 1994, 1987 and 1978. This pattern leaves the next peak due to occur between 2010-2012.

“However, we consider that the events of the 2008 credit crunch will result in a longer recovery phase and anticpate that we will be looking more towards 2015-2016 as the peak of our current cycle,” Colliers said.

Managed apartments have been hit the hardest, Colliers said in its report, now being sold at heavy discounts,

“A large number of these were purchased in the hope of speculative capital gains. The majority of the sales in this sector were forced sales, which have created a market expectation well below previous sale levels.”

Residential property development in Queenstown has been plagued in the past year by demand dropping 40-50% from the 2003-2007 peak, with finance being harder to obtain and the value of properties reducing.

“The higher level of deposits now required by banks is proving to be a barrier for a number of buyers, however we are starting to see banks relax their lending criteria slightly which should help with continued activity within [the entry level] segment of the market.”

Existing high end properties have recently been enjoying an increase in market activity, with 28 of the 36 $1 million plus homes on in the market selling in the six months to June 2009.

Colliers expects that in the residential market in the near future there will be more forced sales, an increase in offshore buyers and bargains may abound when speculators who cannot secure finance are forced to exit the market.