Compared to other cities around New Zealand, Dunedin’s post-Covid house price surge was somewhat subdued and the latest figures from the OneRoof-Valocity House Value Index point to weaknesses in the city’s housing market.
The city’s average property value fell 3.4% ($25,000) to $719,000 in the last three months, and is just 3% above where it was sitting 12 months ago.
However, the upside from all this is that Dunedin is by far the most affordable major city in New Zealand for first-home buyers, with its average property value almost $80,000 lower than Christchurch’s and less than half the average property value in Auckland.
Affordability is a key factor in the market, with agents telling OneRoof that new arrivals to the city, some business leaders and executives, are driving activity, with the university, hospital and new business ventures a key source of new buyers.
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Joe Nidd, owner of Nidd Realty, says business growth is also bringing more executives to Dunedin.
“There’s a lot of big investment happening here,” says Nidd. “There are big businesses getting set up here because they’ve won a contract. There are businesses relocating here to take advantage of the billions of dollars being spent on the new hospital, the university and ACC.”
New residents tend to shop in the middle to upper echelon suburbs. Nidd cites as an example one of his agency’s listings, a four-bedroom modern home at 33 Seaton Road, in Portobello, which is seeking enquiries over $799,000. “There are quite a few academics in the area. The local school is popular and there’s a bus service to the centre of the city,” he says.
Another example of the high-end homes that attracts attention is a four-bedroom home on the other side of the city at 25 Kayforce Road, in Ocean View. The house is seeking buyers with budgets of $1.8m-plus and has turned a lot of heads. “If you’re coming from Parnell, in Auckland, that’s going to be quite an appealing proposition.”
A four-bedroom home on Seaton Road, in Portobello, Dunedin, is seeking offers over $799,000. Photo / Supplied
A luxury home on Kayforce Road, in Ocean View, Dunedin, is looking for buyers with $1.8m-plus to spend. Photo / Supplied
LJ Hooker agent Jason Hynes says that contemporary homes built within the last 10 years are especially popular with buyers. His agency recently sold a three-bedroom new-build on Brighton Road, in Ocean View, for $1.2m. However, homes with issues are struggling in this market, Hynes says.
“What we’re noticing is properties that maybe have some issues, whether they are of a structural nature or whether they may have some permit or consent issues, are proving quite challenging. That they are sitting on the market for quite a long period of time. There are probably just some barriers with those properties with regards to insurance and therefore obtaining finance.”
Dunedin City Council expects the city’s population of around 134,000 to grow over the coming years, with forecasts of it reaching just over 143,000 by 2050, and it is looking at ways to increase housing capacity.
“Dunedin City Council has recently made zoning adjustments and then had to revise them based on the fact that they’ve underestimated the population growth that we’re now seeing,” says Nidd.
“They had created what they called the second generation district plan. Just as that was becoming operative, it became clear that we were having population growth they hadn’t provisioned for in that plan.
This three-bedroom home on Brighton Road, in Ocean View, recently sold for $1.2m. Photo / Supplied
One of Dunedin’s grandest homes, Bishopsgrove, is for sale. Photo / Supplied
“By council standards they very quickly moved into a new variation, which accounted for that population growth and started to address density, particularly in the inner city and surrounding suburbs.”
Dunedin has its share of grand homes. Anyone who wants to see what the top end of the market looks like, should cast an eye over Bishopsgrove, one of the city’s grandest homes.
The six-bedroom mansion at 16 Patmos Avenue, in Woodhaugh, was built in the 1870s for the first Anglican Bishop of Dunedin, and is currently being marketed for sale by Nidd agents Chris Taylor and Pete Strong, who are seeking enquiries over $2.9 million.
Even with the right amount of money, a stately home doesn’t appeal to everyone. “It is a unique buyer, because you have to have somebody young and energetic enough for such a grand residence,” says Nidd.
“There are also a few locals who are waiting for those types of properties to come on the market. But they are few and far between.”
A three-bedroom home on Rona Street, in Saint Kilda, has an asking price of $449,000. Photo / Supplied
At the more affordable end of the market, first-home buyers can get a decent starter home in Dunedin for under $500,000. Nidd cites as an example a three-bedroom house at 11 Rona Street, in Saint Kilda, which has an asking price of $449,000. “It’s ready to move into and live, but a buyer could add value with upgrades,” he says.
“We’ve noticed recently, those [first-home buyers] who are able to obtain finance have a bit of choice again. There’s not that story of they've missed out on 10 properties. So there are some real positive stories out there.”
- Find more properties for sale in Dunedin here.
