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Market data from the Real Estate Institute of New Zealand for November showed homes in and around the city were a fifth more expensive at $520,000 per deal, up from $430,000 last November.
Regionally, average prices in the Clutha district grew by 24% to $280,000 and more than 13% in the Waitaki district to $345,000 on a year on year basis.
However, house prices in the Queenstown-Lakes district continued to reflect resistance to higher prices, average prices down $45,000 per deal in both Queenstown-Lakes and Central Otago, at $945,000 and $530,000 respectively.
Nidd Realty co-owner Liz Nidd said the Dunedin growth had also reflected lower sales volumes, overall sales declining 19.3% to 197.
Despite the high pricing, she said first-home buyers remained prevalent in the Dunedin market.
Those who had "missed out" during the year now stepped up to get on to the property ladder.
On a national basis, median house prices across the country moved up by 8.6% to a record $630,000, up from $580,000 last November, with 10 regions showing record median prices, the REINZ data shows.
Auckland recorded its first annual rise at 2.7% in over a year — the 2335 house sales across the city at the highest November level since 2015.
Kiwibank senior economist Jeremy Couchman said the 5.6% overall gains across the country reflected the strongest rate of house price gains in the past 2½ years.
"Momentum has shifted in the housing market and it is likely to continue to heat up as we move into 2020."
He attributed the cut in the official cash rate by 75 points this year, which had led to record low mortgage rates, as the reason for improved demand.
"In addition, we continue to face housing supply and demand imbalances, exacerbated by population growth which remains well above average with net migration comfortably above 50,000 on an annual basis."
REINZ chief executive officer Bindi Norwell said the properties available for sale nationally declined by 19% in November to just over 22,000, 5300 properties fewer than November 2018, reflecting decreases across the board.
She said the number of homes selling for less than half a million dollars fell from about 39% of the market to less than a third of the market, at 31.5% of the market, while the fastest growing price band was in the $750,000-$1 million category which grew to 19% of all sales (15.5% in 2018).
Of all sales, 1241 homes, or about 17%, had a price tag of $1 million or more.