The Curious Case of Central Otago
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8:48 am, August 18th, 2025 - 31 comments
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How can a region be so pretty, so rich, but so poor?
It has always confounded me that the Dunedin Club didn’t just have a get-together in 1989 when jet aircraft first flew into Queenstown and go all-in to buy up Central Otago when it was about to go through a gold rush equivalent far longer and stronger than the one that set up Dunedin and all its surrounding towns in the 1860s.
A few like the Skeggs and the Dippies got in there.
Instead apart from a very lucky wealthy few, Dunedin has become an ageing, low-wage economy with that one economically redeeming feature of the University of Otago.
Now, on current trends, Central Otago’s settlements of Cromwell, Wanaka and Queenstown will have a population greater than that of Dunedin within 15 years.
The boom in Central has been in real estate. For the most part real estate development over the last 15 years has been masterplanned and executed with stronger urban design, landscape, transport and stormwater management than it had previously been. Wastewater is another matter. The old turn-of-the-century mansions in Dunedin and Christchurch are dwarfed in value and in design by the more restrained versions of estates tucked into lake fronts and hideaways.
Otago, Southland, and Nelson and Bays are the last places showing property value increases in the entire country, but it’s Central Otago’s golden triangle that only lets you in with $1.5 million as your starting point.
The very big money is in Queenstown and Wanaka. It’s not just the money it’s the kind of money it attracts. The region has a global exclusivity and isolation generating a strong appeal to high net worth individuals seeking luxury living and real estate investment opportunities within that aura of a PureNZ framework we’ve advertised in different forms for 30 years. You can get a good room at Blanket Bay for 5 nights for about $9,000, or hire the whole thing out for an extended family for about $200,000 a week.
In the Wanaka Sun this week Forsythe Barr writer Ben Fahy says:
Boulder, Colorado shares plenty of similarities to Queenstown, Wanaka and other parts of Central Otago … But there’s one big difference: Boulder has become a technology and entrepreneurial hotspot in recent years with industry clusters around aerospace, bioscience, cleantech, IT, natural products and outdoor recreation.” (Paid advertisement by Forsyth Barr in Wanaka Sun August 15 2025).
The Universities of Canterbury and Otago are looking at establishing centres in Central Otago due to the expected growth. But if they just perpetuate the training needs of the economy as it is, they will only cater for the relatively low-wage high working hour industries of hospitality and adventure and agriculture. So chop, chop team and make sure you generate research labs that feed in to the US west coast and China+Singapore+Tokyo eastern seaboard innovation networks, not just the local café.
In 2011 Sir Paul Callaghan said in his famous speech that New Zealand can lift its whole game if it becomes a place that talent wants to live. Microsoft shifted to near Seattle in 1986 because both founders had grown up in the area. Amazon moved later to Seattle because of the access to talent, tax advantages, and lifestyle options for employees.
We could do with a global school of Wix more than we need another power-sucking data centre, that’s for sure. For those who think owning a big vineyard is an economically stronger proposition than owning a dairy farm, Sir Paul will disabuse you on our missing innovation drivers with 20 minutes of dense lecture notes.
Finance Minister Nicola Willis said last week that Cabinet is likely to make a decision in the coming weeks around allowing foreign investors to purchase residential property in New Zealand. She has signalled that foreigners holding an Active Investor Plus Visa – which requires a significant investment in New Zealand – could be able to buy property here.
That would be in line with comments New Zealand First Winston Peters made to the Herald last month, when he said if a foreigner was coming to New Zealand “with millions of dollars to invest in this country, then yes, you could buy a house”.
Essentially, our landscape is bait.
Or one big expensive venison sausage getting sliced off one bit at a time.
Land and landscape is still for the most part what we have.
Underneath these globally mobile ultra-rich, and the thousands of North Islanders who shift, are the tens of thousands of almost unseen service-level jobs in cleaning, food preparation, RN nursing, waiting, guiding, wait staff et al, that help keep alive and in good order the cashed-up retirees who now call this region home. It’s almost as class stratified as Waiheke Island, and that takes some doing.
There’s another 15 years of good rolling land to develop around Queenstown, and more around Wanaka – if slicing the sausage is really our idea of a truly prosperous economy.
If we continue to pick and choose what industries New Zealand makes a living out of, voters will continue to pick and choose low value agriculture, relatively low wage tourism and real estate, and structure the economy around them as we have for the last 150 years.
If we want $100K+ salaries that keep our children and grand-children here, we need conditions more likely to replicate successes like Xero, Halter and Rocketlab. For the super-locals, watch the international growth of Scannable, Mons Royale, Medrecruit, RealNZ, Scapegrace, and Cardrona Distillery.
That is what we need to enable the internationally wealthy to invest in and grow. We just don’t have the local capital to do it ourselves (though we are slightly better than we were).
It is quite possible that Central Otago is the only place where New Zealand has that perfect combination to do this, but I don’t think so. It’s just the place where it’ really happening.
There are pieces of a policy framework that both National and Labour should look at, beyond Otago.
I think those areas will always be expensive and out of the reach of many.
The reason, as I see it, is that there are natural infrastructure barriers to future housing development that limits how much can practically be built. The cost of building new infrastructure is borne by a relatively small number of rate payers. So, unless tourists can help fund the future development of infrastructure, then prices will keep going up due to limited supply and high demand.
Central Otago is probably the purest expression of our structural economic flaws: land speculation as the main driver of wealth, thousands of low-paid service jobs (including the outright modern slavery of RSE labour) keeping the machine running, and the infrastructure burden shoved onto locals while global wealth dips in and out at leisure.
Where I part ways with Advantage is the idea that we can just “make” Central Otago into a tech hub.
You don’t manufacture an Apple or a Xero by government decree. Innovation hubs are chicken-and-egg: they emerge when the ingredients are already there: proximity to talent, dense networks of capital and research, and easy access to global markets.
Central Otago is beautiful, but it’s a long way from those networks.
And even if you could recreate Silicon Valley: is that really the model we want? A late-stage capitalist wasteland of VC bubbles, unaffordable housing, egotistical founders, and burnt-out workers hardly feel like the path to a healthy, sustainable economy.
If we’re going to have to pick winners, then Auckland, Wellington or Christchurch are far better candidates: mature, global level cities that already have agglomeration benefits, existing research institutions, and the scale to support an ecosystem without turning our regions into playgrounds for billionaires.
The real task is fixing the fundamentals. Wages, housing, R&D, connectivity, so innovation has fertile ground to emerge. Otherwise, all we’ll do is pour money into trying to create a new Cupertino in Cromwell and end up with the same broken model we see in California: extreme wealth at the top, exploitation at the bottom, and whole communities priced out in between.
Res…a new international airport at Tarras and the Queenstown Lakes District would have a great site for a tech hub on the current airport site right in the middle of Queenstown.
Maybe, but they'd be much more likely to just flick it off for housing development. Thereby perpetuating the cycle of land speculation we're trying to break.
And the proposed Tarras Airport is yet to stack up with a compelling financial case. Or anything other than talk.
A greenfields site an hour away from anywhere is never going to win out over even a capacity constrained airport that's right on the doorstep of where people want to go. Besides, similar projects elsewhere have had a….. chequered history.
"A greenfields site an hour away from anywhere" ,,,development in both Wanaka/Hawea and in the Cromwell area (check out the vineyards) is going bananas….plenty of people are saying that it won't be long before collectively they will have a greater population than the Queenstown area.
Alexandra and Clyde are also attracting plenty of people looking for real Central Otago.
Wanaka and Hawea are 25 mins from Tarras, Cromwell 10mins Clyde 25 mins Alex 30 mins .
People are historically obsessed with Queenstown but things are changing apace-only around 50% of the people flying from Queenstown airport actually live/stay in the Queenstown area.
Vineyards aren't going to attract the volumes you'd need to see to justify a massive new airport: other than making it slightly easier for the
slavessorry, extremely grateful guest workers that work there to get to their jobs.The problem is Queenstown is already pretty convenient as an entry point to Central Otago. It's where the infrastructure, people, ski fields and shops already are.
Replicating all of that in the middle of some paddock is going to take some doing. And, if the attempts of Alicante, Berlin, and several other cities to do just that are anything to go by, extremely risky.
And that's before you start factoring in the environmental impacts.
You've got more chance of making a tech hub or movie studio working than prising ZQN off Queenstown Inc. And really chances of both are pretty close to zero. I've lost count of the tech hub and studio plans that have been floated, and all have come to naught, just like all the plans to move ZQN.
What would Willian Rees say now as he looked from the top of the Crown Range down the valley?
We've come a long way from sheep. And can continue to do so.
Well one of his shepherds, Alfred Duncan (Mt Alfred up at GY is named after him) wrote a little book about those days, The Wakatipians, Or, Early Days in New Zealand , it's in QLDC library and I found it online once, and really it wasn't much different to today, but just at a greater scale. Alfred Duncan is probably the first person to say in print that "Queenstown's ruined", and it's been ongoing since. Wakatipians is a good read if you can get hold of it.
Yes that perpetual tragedean outlook of national loss is certainly not going to inspire any young person in their 20s to stay here.
The only industry that will keep them here is the one where they engage in digital worlds all day, from wherever they can then get up and ski within 20 minutes and go back to testing games at night.
Sorry, I'm a bit jaundiced and cynical after 30 years behind a counter having the near daily customer who's got their nickers in a twist because Queenstown's ruined, it's not like it was when they were here in the 50's 60's 70' or 80's. Scratch a bit deeper and they had a hard time of it. Sometimes when you're away it's best not to say where you're from, including on this forum. Also seen lives destroyed by what the place, and some people in it, can do to people. They're never going to have a positive attitude to the place.
You should get hold of Duncan's little book, the themes of his experience in Whakatipu are the same for most people who come and work here throughout our history and today. I've got a scan I can send if you like.
One of the enduring left field large employers over here is the call centre, which employs 50 odd and people can earn quite good money if they are making the sales, been going a while too. Although they have been that size most of their life and no one else has had a go, so the market could be limited one way or the other. But it's still leveraged on tourism and our transient international community.
I'm astounded too how we don't have alternative value creators to tourism and development. There's the film / creative industry, but jeez that's a fickle beast for those in it, and local living cost make it hard when there's no work or sales.
When it happens we'll wonder what happened, and everyone will scramble to be part of it. The last new thing here would be when Hackett rolled into town with his bungy. Most of the town kept their distance until the queue went from the bridge half way to Arrowtown. For their first day the marketing was done by the local league club, no one else was keen. That changed rather quickly.
…"then Auckland, Wellington or Christchurch are far better candidates: mature, global level cities"
yes, all good. however i've always said we can't call Auckland a global city until it's possible to live in Auckland without a car. same applies to any city.
in other words good, universal, cheap and reliable public transport.
in any global city you can get on the metro for a pittance and go all over without having to look at a timetalble.
chicken and egg though, we don't really have the density of population to support this. the central loop wil help when it's finished.
Auckland must be close to becoming like Queenstown where public transport is very heavily subsidised because it's more cost effective to do that than build more roads. We've got a pretty good and well patronised service covering most areas, any journey any time will cost you $2.00
https://www.orc.govt.nz/orbus/queenstown-bus-ferry-timetables/
https://www.qldc.govt.nz/services/transport-and-parking/public-transport/
So Queenstown is probably closer to becoming a global city, we've certainly got the globally focused people living here, but you could say that for many regions around NZ.
I take it you don't live near a rail station or major cycleway in Auckland already?
I don't buy the infrastructure deficit limitation. New Zealand's distance from all markets whether Queenstown or Auckland is massive and yet the digital sector continues to grow by over 10% a year since 2016, double the rate of the broader economy.
Christchurch was a fair way from the global anywhere, but it managed to generate Xero, and Jade. Xero's Rod Drury now has his patch near Queenstown and has the money to keep investing. That is how it works. Dunedin of all places has Animation Research, and Dunedin also has its own digital startup centre.
There was no launch infrastructure for Space X in Hawkes Bay. We got to keep a part of it here and that's actually pretty good.
The question of whether the digital economy is one we want is a weird question until it works and you actually deal with its success. No one from New Zealand could imagine we could deal with a globally relevant screen and television industry in the 1980s. Yet it had a 30-year run and evolves in new forms particularly in gaming.
Nor does anyone really now buy the causality of agglomeration benefits. Otherwise Palmerston North would be the dairy innovation capital of the world. Spatially located clusters of industry were great for Porter in the 1990s, but they just aren't relevant in digital production.
I can't see us getting away now from having extremes at the top, unless we want to remain dominated by commodity production. And that choice we continue to make, as Sir Callaghan pointed out, means we are choosing economic poverty by choosing to be dumb.
I work in the IT industry, and no matter what glossy narratives get spun, agglomeration and personal connections still matter. In fact, if anything, they matter more now.
Yes, you can build a company from Dunedin or Hawke’s Bay, and yes, digital tools flatten some barriers. But the reality is that scale-ups and unicorns don’t grow in isolation.
They need dense ecosystems of talent, capital, customers, and research. And those are overwhelmingly urban, proximate, and network-driven. Even in supposedly “remote” success stories, the key players were flying constantly, plugged into Silicon Valley, London, Singapore, or Sydney.
That’s not to say Central Otago can’t host successful firms. Of course it can. But let’s be honest about the dynamics.
Rod Drury’s patch near Queenstown is the result of him building Xero in Wellington, not the other way around. Animation Research thrives in Dunedin because of decades of cultivated networks, not because distance doesn’t matter. And Rocket Lab didn’t become Rocket Lab because of Mahia.
Mahia was just the launchpad; the company scaled on global capital and talent networks in the U.S.
What makes places like Seattle, Tel Aviv, or Shenzhen thrive isn’t just money or infrastructure, it’s density. The serendipity of running into investors, hiring talent quickly, swapping ideas at meetups, or spinning out companies from nearby universities. That can’t be manufactured overnight, and it can’t be sustained in isolation.
Proximity isn’t everything. But pretending it doesn’t matter is just wishful thinking. Without it, scaling becomes exponentially harder. Which is why the world’s great digital clusters are still, overwhelmingly, physical ones.
Unfortunate but true. You can built a remote startup reasonably easily these days. But it doesn’t scale well without proximity.
Or in NZ, for IT, without a PBTech at hand and a whole pile of support companies providing engineering, finance, marketing, design, skills to hire, etc.
Just gong to point out that none of what is being discussed here is taking the environment or sustainability/regen development into account.
People already live in those places, it's not terra nullius. The Tarras area is a good example, there are existing communities that don't want an international airport in their backyard (who does? Wanaka didn't either and won in the high court to block the proposal there). Tarras is a small community having to fight on two fronts atm, the airport and the proposed gold mine.
(there's a research project in tallying how much sheer waste of time, money, resources and life has been spent on having to resist this stuff).
We harm or outright destroy communities without much thought, and we complain about there being no jobs and society degrading, as if we can't see the connection.
That's not even getting to the natural environment, which has been wrecked by humans over generations. There are few native ecosystems left, fuck all trees, we've denatured the land with stock farming, and now we're going after the waterways with industrial dairying. Central Otago and the golden triangle are indeed beautiful places, but we are intent on wrecking them more. Because of money and perpetual growth.
I'd rather not hear TINA to the perpetual growth machine from lefties, but just in case, we could be using models like Doughnut Economics, which places people care and earth care in the centre and then figures out how to make sure both are ok within the economy.
I don't support the airport in Tarras for exactly those reasons Weka. I live near Hawea and will fight it.
But the three men and a dog who live in lovely Tarras will have their work cut out fighting the airport and the massive Australian gold mine (currently sailing through the consent process) both very close to Tarras.
I'm confused then. Because your comments above don't suggest you are fighting the airport. They sound more like, we can't stop it so may as well make the best of it.
As you have just pointed out, the 600 odd people that live in Tarras don't have to fight this on their own. Just like other big wins have major local and national involvement. Think Manapouri. The messaging here needs to be 'this is a place worth protecting', not 'it's already ruined and everyone wants to live here, so we may as well'
I was being realistic. If it was up to me we would be closing airports for climate change reasons.
The Tarras airport site is regarded as much safer and much more functional than the Queenstown airport site. It can handle wide-body planes and has space for two long runways in different directions. Queenstown has neither of these features, and only captains can fly into Queenstown due to its tricky approach.
Many of the people in Queenstown want the airport moved to Tarras because of the noise. Qantas and AirNZ have in the past voiced support for Tarras.
In climate terms, the geography of Queenstown acts as a natural brake on emissions and growth. If the airport at Tarras is built, that natural limit is removed and there will be exponential growth in the area, as well as in GHG emissions. Not just the avgas ones, but all the ones associated with more flying: infrastructure and resources. The case against airports is not just the flight GHGs, but all the extra ones that come after it. Airport economics is based in perpetual growth. It will never end, and now is as good a time as any to draw a line in the sand.
I have sympathy for Queenstown people over the noise. But this is exactly the same issue for Tarras people (and Wanaka people when Queenstown people wanted to extend the airport there). How many of those people are willing to limit growth? Why should other people have their quality of life ruined?
Ad is arguing for perpetual growth. It's inherently and entirely incompatible with a meaningful climate response, and thus incompatible with life on earth. It's not like this is even fringe thinking, the climate science is clear and it blows my mind, continually, that we are just pretending we can keep on going.
The limiting factor in Queenstown is going to be sewerage disposal. Somehow, somewhere we have to find a place to dispose of it in perpetuity. and that use will pretty much exclude anything else, or limit it severely. And that includes airports or agriculture if it's within the basin. And it will be eye wateringly expensive. Some population wet dreams (well, actually firmly held expectations by some) would require piping it to Fairlight to get enough year round soakage. There's a couple of short term options, but they have the potential to come to a screeching halt just like the Shotover infiltration brain fart. The stuff has a tendency to start oozing out unpredictably and embarrassingly.
The airlines support Tarras to the extent that it provides competition to ZQN, to keep a lid on price expectations there, and that the Tarras proposal by Christchurch keeps any competing proposal by Auckland at bay. I have no idea how serious Chch are with Tarras, but a 3000m runway on Hawea Flat owned by AIA would be pretty much the end for Christchurch International Airport as a long haul airport, and a hefty kick in the slats for Christchurch as an international city. They will fight hard on that, just like they did against the Five Rivers proposal in late 80's
Where is that 3000m runway situated in Hawea Flat?
There would probably be lots more people affected by noise there than at Tarras….that would rule out Hawea Flat.
The recent survey carried out for the QLDC chose Tarras as the best of (I think) 13 sites.
Central Otago has always been a vacuum sucking in capital, money has poured in hoping for a good return. Some ventures have been exceptionally profitable, some gold dredges and some tourist ventures. Others not quite so flash, Kawarau Falls dam or the Carlin You could be rather cynical, and not far from the truth, to say that the major driver of economy is cash burn, there's some prodigious conflagrations which is ok so long as you're getting paid, then it's not, and there's lots of tears.
But building houses to house builders to build more houses isn't going to create a sustaining economy, and really it's the only profitable (kinda) and sustained economy we've got (again kinda, and so far…) Everything else, so far, has just been making a small fortune out of much larger fortunes, or really just been small beer. There's not many, or any, employers outside construction employing 100s at over $100K, and we're going to need that to meet peoples aspirations.
Our small size and distance conspire to keep us small and distant. Good for tourism, which covers everything from 1 night to 5000 nights, but not for multi-generational wealth and community generators. During Covid there was some hope as the world around us fell to bits, and some proposals / speculations of developments that would employ 100s at $100K+ were kicking around, but small size, distance and a rapidly changing world brought reality back.
So we're probably destined to being a pretty neat place for people to come to and build on their ideas, and then take them somewhere larger and more economic, or slip off wondering why they tried. Perhaps something will evolve that will change things, but I doubt we will see it coming until it's fully formed.
Structurally there's somethings that might give the district more coherence and facilitate better decisions in governance and development.
* A combined Local Government structure. I'd see Dunedin City and part of ORC being cut loose to become a unified council covering the Shag and Taieri catchments, with the rest of CODC and QLDC being amalgamated, with maybe Teviot going into Clutha. ORC goes back to being a Clutha Catchment board with transport and CD functions going to respective district councils. Big change but it gets Dunedin out of the picture and services are focused on Central, rather than Central being used to get more services for Dunedin (or Invercargill) I'd probably have this mega-council based in Cromwell because it's in the middle, and where the civil grunt is based.
* A Central Otago electorate. Currently we're split between Southland and Waitaki, Whakatipu and Alexandra are in Southland, while Wanaka and Cromwell are in Waitaki. this is good for having two vices and votes in parliament but gives residents little voting power as we are appendages of two electorates where the majority of the electorate has little commonality, and quite a bit of antipathy, to Central Otago issues. Unfortunately this gets really tricky with the Electorate Act limiting the number of electorates in the South Island. Another slight impediment is that the resulting Central Otago electorate wouldn't necessarily be a blue one, so National are quite happy with existing arrangements.
Those would be helpful political moves yes.
And I agree that we are best placed as a business incubator, unless it's in land-agri-or-real-estate industries.
Agree…the Left might well win a Central Otago electorate.
It could be an interesting exercise to look at what electorates would look like if there were a couple more in the South Island, or electorates were based on a set population size, rather than the South Island having to have 16. A good issue for a party to look to have democratic principles in mind, and anyone arguing the status quo to come across as a gerrymandering plonker.
Your point about Central Otago being a place where fortunes often go to die is interesting, but honestly it's for those with fortunes to take those investment risks and not for you to talk them down. Some make it, and make it big. Just like gold miners of old: 90% don't and that's just the game and they accept it.
There's no point talking about multi-generational wealth in Queenstown when most of use only arrived 10 years ago or less. Give us a moment and we'll generate some.
No one in the early 1970s thought for a moment Central Otago was a place for a world-leading wine industry. Yet here we are. Who talked of craft beer in the 1970s? No one. Yet here we are.
The future may well surprise you, but you may find the future you want won't happen unless you and like minds make it happen. That will take more than an electoral seat and a sewerage system.
Queenstown and wanaka are not central otago. They are southern lakes. Alexandra, Cromwell, Clyde, roxbrough, Omakau and surrounds are Central Otago.