The 6 Regent St property, which has a floor area of 200sq m, was being developed by a small Queenstown building company on a 630sq m section.
It would be finished early next month.
Mr Drewett said nearby Shotover Primary School made the property attractive as a family home, along with supplementary income from the unit.
The resort's ''very, very strong'' rental market also made it a good proposition for an investor renting out the entire property.
The Otago Daily Times understands a second property in the suburb was recently sold for more than $1m, but remains subject to conditions.
Harcourts Queenstown managing director Kelvin Collins said million-dollar-plus sales were almost the norm in adjoining Lake Hayes Estate, and the same could happen in Shotover Country.
Although buyers were more cautious than a year ago, properties with a ''bit of X-factor'' could easily fetch seven figures, particularly when several interested parties were taking part in an auction or a multiple-offer situation.
''It is a bit of concern to the community if that's your entry point,'' Mr Collins said.
''We do need a different style of product which allows people to enter the market, and that's got to be apartments.''
There would be no dramatic change in the market until apartment development took off or a lot of new land was developed for housing, he said.
New Quotable Value data shows annualised quarterly growth in Queenstown has slowed from 30.7 per cent to 23.7 per cent.
QV spokeswoman Andrea Rush said average growth across the suburbs had slowed from last year's peaks and value growth was being held up by the higher end of the market.
At the lower end, values were rising but not as quickly as last year, and there continued to be a lack of supply of vacant land.
