The housing market slump appears to be over in Dunedin, OneRoof house price figures show.
In the three months to the end of May, Dunedin’s average property value jumped 1.7% ($11,000) to $654,000.
Although property values in the South Island city are still down 11% ($83,000) year-on-year, the uptick in the most recent quarter suggests the market there has hit the bottom and is primed for a recovery.
The only other metro to record quarterly value growth in the OneRoof figures was Queenstown, which has benefited strongly from the opening up of borders and an extremely tight rental market.
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The downturn wiped 13.8% ($104,000) off of Dunedin’s average property value since it hit a peak of $758,000 in February last year.
However, unlike in other parts of the country, property values in Dunedin didn't rise as sharply during the boom. From March 2020 to the peak of the city's housing market, value rose only 30%, below the nationwide lift of 42%.
The OneRoof figures show the five strongest rebounds in Dunedin were in Calton Hill (up 5.3% to $476,000); Kinmont Park (up 4.7% to $754,000); Belleknowes (up 4.1% to $788,000); Waikouaiti (up 4.1% to $507,000); and Corstorphine (up 4% to $591,000).
LJ Hooker Dunedin’s managing director Jason Hynes says his agents have noticed “a bit of surge” over the last two to three months.
Listing numbers rose in the first quarter of the year to around the mid-700, although they have since fallen to under 600.
“We’re noticing less stock and more competition out there for properties,” Hynes says.
“I think there still seems to be some really good buyer demand out there. We’ve noticed a lot of people that have been coming from other centres to Dunedin which has been obviously contributing towards that.”
He says these are not first-home buyers but people selling houses in the likes of Auckland, Wellington, Tauranga, and Palmerston North and going to Dunedin for either work or lifestyle reasons.
In Dunedin they can get more bang for their buck, he says: “They might have a not-so-nice house worth a million dollars in a larger centre but then they can get a pretty nice house for a million dollars in Dunedin.”
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Hynes says value growth in the suburbs of Corstorphine, Calton Hill and Waikouaiti could reflect strength at the lower end of Dunedin’s market, while the results in the other suburbs could be skewed by larger sales.
Harcourts Dunedin director and branch manager Richard Stringer has not noticed property value growth, however, he says Dunedin is interesting because like Queenstown prices are stable, albeit for different reasons.
“Queenstown’s bucked the trend completely because of, we put it down to, Covid and people adjusting their lifestyle decisions. It’s a higher demographic kind of market in terms of the buyers and property value.”
Dunedin has been buffered by infrastructure programmes, like the hospital build and KiwiRail rebuild, he says.
But also, Dunedin does not see the highs and lows of other markets, he says.
“Dunedin goes up late and quickly and then it retracts back quickly and then it stabilises, and it stabilises for some years, because you just don’t have the same population growth that other centres will have.
“Auckland, while it might be hit hard at the moment, will recover and grow a lot faster than Dunedin will.”
Stringer describes the Dunedin market as balanced and healthy with buyers out shopping because they have realised the market probably will not go any lower.
Dunedin appears to have stabilised more quickly than other parts of the country. Photo / Getty Images
A lot have pre-approvals that only last three months and have been told by mortgage brokers to buy now because if they have to reapply they may not be approved the same amount.
“There is a window now for buyers to get out and buy and I think we’re seeing that but it hasn’t flowed through to value yet.”
John Murphy, Ray White Dunedin co-owner, also had not noticed values rising but he, too, points to the infrastructure developments and says students are back.
“There’s a lot going on. We’ve got a few cranes in here at the moment. It really feels like Dunedin's just forging ahead, it's really going in leaps and bounds.”
He also says there are plenty of people from outside Dunedin moving to the city for work and lifestyle because Dunedin is “a pretty special place”.
His office is at the wharf and that’s pretty special, too: “This morning I saw a seal actually swimming past my window.”
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