New Zealand’s cheapest city for property is also it’s hottest. OneRoof figures show house price growth in Dunedin was streets ahead of price growth in the country’s other major metros.
The city’s average property value jumped 3% to $691,000 in the three months to the end of April, well ahead of the country’s next best performing city, Hamilton, up less than 1% over the same period (and Auckland’s average property fell 0.6%).
The heat in Dunedin looks all the more remarkable considering price growth in the city during the post-Covid boom was running around 10% below price growth in Auckland, Christchurch and Wellington.
Start your property search
But what’s driving renewed interest in Dunedin’s housing market and why is it proving more resilient than other cities around New Zealand?
While high interest rates, job losses and the cost of living crisis are hampering growth in other cities, Dunedin is buoyant at the bottom and top ends of the market, real estate agents told OneRoof.
Jason Hynes, managing director at LJ Hooker, Dunedin, said first-home buyers were particularly active.
“The lower end of the market is very buoyant,” he said, noting that well-presented homes in the $350,000 to $650,000 price range were attracting significant interest.
“With those entry-level properties, we’re seeing between 20 and 30 groups come through at the first open home. First-home buyers are identifying those properties very quickly.”
Hynes told OneRoof that first-home buyers would be looking to make a purchase before investors come back into the market and competition for properties increases.
A six-bedroom renovated home at 71 Eglinton Road, in Mornington, Dunedin, is seeking offers over $759,000. Photo / Supplied
A refurbished four-bedroom 1960s home at 4 Lambert Street, in Abbotsford, Dunedin, goes to auction May 21. Photo / Supplied
He had also noticed more first-home buyers in their 40s in the market, some of whom were reacting to rising rents. “They maybe might have been long-term renters, but if they’ve got the capabilities, they’re considering purchasing now,” he said.
Hynes said the middle of the market was also performing well, and cited as examples two properties that had attracted strong interest: a six-bedroom home at 71 Eglinton Road, in Mornington, which is seeking enquiries over $759,000 and a four-bedroom refurbished 1960s home at 4 Lambert Street, in Abbotsford, which goes to auction on May 21.
“The Lambert Street one has been very popular in terms of interest. Not having to do any work is the attraction,” he said, adding that properties with consent issues or lacking good exposure to the sun were “taking a little longer to sell”.
Bayleys Dunedin managing director Chris Maclean said uncertainty in the economy wasn’t “holding back first-home buyers” in the city.
“We’re still quit affordable, compared to other centres. First-home buyers are getting quite nice properties in the late fours [$400,000s]. Whereas even Christchurch has edged above us now in median sales price.”
(REINZ figures show Dunedin’s median sale price for April was $629,000 while Christchurch’s was $665,000. Prices in both cities were well below the $1.05 million median sale price in Auckland and the nationwide median of $790,000).
A new home development on Magnolia Lane, Mosgiel, is proving popular, according to agents. Photo / Supplied
Maclean said his agents were finding the market to be quite balanced and positive for buyers and sellers. “There are definitely people coming through open homes [and] definitely buyers that are willing to make offers.”
Maclean pointed to the new hospital development, Project Whakatuputupu, as a potential boost for the residential property market. “It’s not a silver bullet. But we have the hospital build looming closer, where we will start seeing some out of town [buyers].”
He said Bayleys Dunedin recently sold two apartments to a hospital contractor looking to house workers.
One Agency Dunedin co-owner Jacqui Johnston said she had detected “a little bit of hesitancy” among vendors when it came to reducing prices. “Unless you’ve got someone who’s particularly motivated and homeless or motivated and needing to get on with your life, things are taking a little longer.”
She added: “There are more properties available, there’s more choice available and the vendors need to be a little more realistic.”
Johnston said newer homes for sale in Mosgiel were selling well. The agency is currently marketing sections for sale in Magnolia Lane, in Mosgiel, on behalf of Milestone homes.
Edinburgh Realty director Lane Sievwright said the market had bounced back after a couple of rough years. “In March values were back to similar levels 12 months ago.”
Like other agencies, Edinburgh is seeing high and low end properties selling well, but sales in the middle price bracket - $650,000 to $850,000 - are proving a little difficult.
“What we are finding in the middle market is that houses that are priced are getting more of a turnout at open homes. There are a lot more houses on the market at the moment than there were six months ago.
"Buyers might see six or 10 houses in a week, and there might be 100 houses on at their price bracket. They want to view the ones that have a price first because they know where they stand as opposed to a lot of properties that are on by negotiation or deadline sales for the first two or three weeks."
Sievwright said investment properties were also starting to appear on the market, which was good news for first home buyers.
- Click here to find more properties for sale in Dunedin
