Feeling the heat of the city’s property market

After eight months of attending open homes and having their offers rejected, the Cullen family...
After eight months of attending open homes and having their offers rejected, the Cullen family Addison (2), Rebecca, Viola (6), Richie and Kaia (4) will finally move into a home of their own at the end of the month. Their story is a familiar one for many young people hoping to buy their first home in Dunedin. Photos: Peter McIntosh
Dunedin is the darling of the property market in New Zealand, leading the country in increases in value and the speed of sales. But can the buzz continue and is everyone benefiting? Tim Miller reports on a heated property market.

More than 1200 first-home buyers rushed to register Dunedin as the city they wanted for their first home when the KiwiBuild scheme opened last month.

For many it comes as no surprise.

Based on numerous reports from Quotable Value and CoreLogic NZ, Dunedin is the current star of the New Zealand property market.

Demand from first-home buyers and investors means houses in the medium to low price range are selling at a quicker rate than ever before.

Under some measures, homes in the city were selling faster than anywhere else in the country as first-home buyers and investors compete with each other.

Rebecca and Richie Cullen spent seven months searching for a home for themselves and their young family.

They viewed more than 40 properties all over the city during that time and made an offer on eight of them — but were still left without a place to call their own.

Finally, late last month, they found a home in Caversham and will move in by the end of August.

Mrs Cullen admits they thought about packing up and moving somewhere else.

"We considered moving to Invercargill, Milton, Oamaru even Timaru ... We wanted to stay in Dunedin because we have family here, so it was hard to think about buying elsewhere."

Prices are up and property in some Dunedin suburbs is selling faster than anywhere else in the...
Prices are up and property in some Dunedin suburbs is selling faster than anywhere else in the country but it seems not everyone is benefiting.
After setting their budget at $280,000 the couple continued to increase their price range up to $380,000 with no luck. Eventually they paid about $340,000 for their new home.

"My husband works for a bank so we thought it would be easy given his knowledge of property but that was not quite the case."

But for many first-home buyers the search continues.

Builder Sam Mears and his partner have been looking for their first home for more than a year. Each time they  had  made an offer on a place they  had been  out-bid.

"We’re both coming into it looking for our first home using our KiwiSavers and some savings. We’ve put offers in on two now but missed out due to others offering way higher," Mr Mearns said.

Since they started, the number of other buyers competing for the same property had only increased, he said.

"Always heaps of other groups who look through, more so then when we first started looking."

They now had a real estate agent who was helping them in the search.

Despite this, Mr Mearns said they had no intention of leaving Dunedin.

"I think we’re both pretty committed. We both have full-time jobs here, and family, friends.

Prices are up and property in some Dunedin suburbs is selling faster than anywhere else in the...
Prices are up and property in some Dunedin suburbs is selling faster than anywhere else in the country but it seems not everyone is benefiting.
"I don’t think it would make us want to move."

A veteran of the city’s property market says she has never seen so few homes and land for sale in the city. Real Estate Institute New Zealand regional spokeswoman Liz Nidd said the real estate industry was a simple case of supply and demand, and demand was far outstripping supply.

"We had two properties last week which had deadlines closing and we had 20 offers, one had eight and one had 12, and you’ve got to feel for those competing for a property time and time again.

"I really feel for buyers in the market right now."

Until more land became available, prices would not be slowing any time soon, she said.Both the Government and the Dunedin City Council agree with Ms Nidd’s view on the availability of property in the city.

Dunedin now has an estimated housing shortfall of about 600 based on figures from Statistics NZ of households data and lagged building consent applications.

Earlier this year, council policy planner Nathan Stocker presented an urban development capacity report to councillors showing the city had been slightly caught off guard by the recent increase in population.

"We’ve seen Dunedin shift from a low-growth city to medium growth, which in some ways was not predicted, so there’s a little bit of catching up to do in the market," Mr Stocker told councillors.

While for most of the 1990s and 2000s construction had kept up or had outpaced the population growth, that was no longer the case, Mr Stocker said.

A housing and business assessment was due by the end of the year and would include an assessment of the demand for housing and business land in the next three, 10 and 30 years, he said.

tim.miller@odt.co.nz

Comments

"is everyone benefiting?" Nobody's benefiting except those who intend to sell and move / don't buy in the same area. Equity is not wealth.