Dunedin property market continues to thrive

Dunedin Mayor Dave Cull said says the council is searching for a non-residential central city...
Dunedin's house prices have risen 18 percent over the past year. Photo: ODT
Dunedin's hot property market is showing no signs of slowing down, according to the latest figures out from valuations company CoreLogic.

The city's house prices have risen 18 percent over the past year - significantly outperforming other major centres.

Those figures come to hand at the same time another survey shows that only 29 percent of New Zealanders are satisfied with new housing supply, and more than half believe the country isn't doing enough to meet infrastructure needs.

Dunedin's average property values rose to $514,680 - an 8.7 percent rise from the previous quarter.

When comparing annually, the numbers are even greater, the southern city's property values rose by 18.3 percent - figures not seen since 2005.

CoreLogic head of research Nick Goodall said a key reason Dunedin's property values had risen so dramatically was a lack of listings and banks loosening serviceability rates.

"Outside of that, I think Dunedin's local economy is going relatively well as well. So healthcare and social assistance is a key local employer there and that's still going quite strong on top of the fact there's the whole new hospital being built down in Dunedin, which is contributing to the local economy," Goodall said.

Dunedin's average property values are now ahead of Christchurch's ($507,852), which is continuing its recent trend of stagnant growth due to an oversupply of houses.

Goodall said Auckland values, on the other hand, increased fractionally by 0.8 percent to $1,047,110, following a slowdown earlier last year.

"The growth that we saw in the last three or four months, really made up for the drop in values that we had actually seen in the first half of the year and Auckland," he said.

The regions were also looking strong, with growth apparent in affordable areas like Gisborne, Whanganui and Invercargill.

Nicki Cruickshank, a Wellington-based sales consultant for Tommy's Real Estate, said they were picking up investors' mood swing.

"We've really noticed in the last four months in Wellington there's been multiple offers on most investment-type properties. [We've] even noticed probably in the last month that there's a few more Auckland buyers that are re-emerging in our market," she said.

While the investors' confidence may be coming back, New Zealand as a whole is lacking confidence in the country's infrastructure.

A survey by Ispos showed that 55 percent of New Zealanders agreed that we were not doing enough to meet the country's infrastructure needs, and only 29 percent were satisfied with new housing supply.

Civil Contractors New Zealand chief executive Peter Silcock said over the years successive governments had failed to address infrastructure.

He wasn't surprised by the survey.

"It's quite a high number (55 percent) and I think that reflects some of things that we've seen over recent years, particularly around some of the flooding and congestion on our roads," he said.

He also said there needed to be an increased focus on water and sewerage infrastructure - an issue highlighted by Wellington's recent failure which resulted in wastewater ending up in the sea.

Silcock hoped the the government's recent $12 billion infrastructure fund would go some way to addressing the shortage. The government should ensure there was less politics in decisions around infrastructure, he said.

Comments

Paper wealth if you already own a house. The main culprit, low interest rates- are 'stimulating' all financial assets such as houses to historic levels (as a % of rent, as a % of real wages) and this only hurts the people trying to buy. The record debt levels have to be paid back one day, or can they be paid back? Most advanced economies are technically bankrupt because they can not pay back their debt & interest. They issue new debt to cover them. One day the ponzi scheme will break and these high house prices will be a distant memory.

'Thrive' is a very bad choice of words. Like a thriving cancer? The word 'outperforming' also shows the bias these pieces typically have.

Always impressed about how the title sounds so positive, yet for everyone hoping to ever buy it's another nail in the coffin.

Its a game of monopoly. Investors buy in cheaper places by getting a loan on their other properties. Tenants/students pay off their mortgage. 'Investors' then sell at the top of the cycle and pocket the profit. Quite a game that poorer people cannot join. Capital Gains Tax would put the brakes on this scheme.