Dunedin house prices up by 9.2%

The gain in Dunedin house values is almost double the national figure; pictured, Columba Ave, Corstorphine. Photo: Stephen Jaquiery
The gain in Dunedin house values is almost double the national figure; pictured, Columba Ave, Corstorphine. Photo: Stephen Jaquiery
The annual growth in the average value of a house in Dunedin is almost double the 5.7% of the country's national figure. It is closely followed by rising house values across Central Otago and Queenstown.

The prospect of a new niche housing market in Dunedin has been identified by Quotable Value, on the expectation that one thousand or more construction workers will need housing during the $1.4billion, possibly decade-long new hospital construction project.

Queenstown Lakes' values remain ahead of wider-Auckland values of $1.05million, albeit many Auckland suburbs are far pricier than Queenstown's $1.15million, according to Quotable Value data for June.

Despite an easing in values in many areas across the country, QV Dunedin property consultant Aidan Young said Dunedin values had continued their rise.

He said yesterday there was mounting interest around development of Dunedin's hospital.

''During the construction period, this may result in an influx of workers, and their families, seeking accommodation.

''It'll be fascinating to see whether this will have a substantial impact on housing demand over the coming months,'' Mr Young said.

Renting in Dunedin is already at crisis point, as older renting stock is being sold back into the housing market, to avoid expensive insulation upgrades, now required under new government regulations.

Mr Young said overall Dunedin city values had increased 9.2% in the past year to June and were up 3% over the past three months. The value in the city was $409,898, almost $1100 up on the that in May.

''Despite the fact that we're seeing a lower number of property listings, something we expect in the winter months, the market remains busy,'' Mr Young said.

Buyers, particularly first-home buyers and young families, were ''snapping up'' the relatively affordable property in the below-$400,000 segment of the city market, although multi-offer scenarios were common for the entry-level properties, he said.

Less stock on the market during the winter enabled sellers to negotiate ''very competitive prices'' for their property within a short period of time.

He said premium, well-kept and maintained properties continued to generate good levels of interest.

While prices in Dunedin appear to be maintaining sellers' market, elsewhere it was becoming a buyers' market, and some sellers were expecting unrealistic gains, QV general manager, David Nagal said.

It was observing challenges concerning managing seller expectations on sales prices, he said in a statement.

''After a sustained period of national value growth, sellers can sometimes have an inflated, even unrealistic, view of the value of their property,'' he said.

This meant there was a slower than usual average time to sell properties across some areas.

''In this sense, it's a buyer's market,'' Mr Nagal said.

The data for June confirmed what QV was seeing, as values continued to moderate or drop after a sustained period of growth, leading into winter, Mr Nagal said.

He predicted there would be no changes to the interest-driving official cash rate likely until September next year, at the earliest, and investment demand would either remain constant or would drop across most areas.

''It is likely values will remain fairly constant or steadily grow across most of New Zealand throughout winter,'' Mr Nagal said.

Elsewhere around the South Island, Waimate showed the strongest quarterly growth, up 4.8%.

Dunedin continued its strong growth, particularly southern, coastal and the peninsula areas which were up 3.7% over the past quarter, on top of the strong annual growth.

The largest drop in quarterly value was in Southland, which was down 10.6%.

simon.hartley@odt.co.nz


 

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