Dunedin was the rockstar housing market of 2019, but while growth in 2020 has sluggish, some segments of the market have been doing very well.
The latest OneRoof-Valocity house price figures show property values in the city grew just 2.9 percent in the seven months since Covid-19 struck, compared to 11 percent growth nationwide.
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But while the city lags behind every major metro bar Queenstown on the house price index, it isn’t in crisis. Dunedin’s median property value is $565,000 - $115,000 up on where it was in December 2019 – and its median sale price topped $600,000 this month.
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Joe Nidd, owner of Nidd Realty, says the top end of the market has boomed in the last quarter, with the agent noting 25 $1 million-plus sales, and 50 over $900,000.
“That’s a fascinating figure for us because there used to be so few sales that broke the $1 million mark. The top end is really active right now. People are paying serious money,” he said.
OneRoof figures show Dunedin racked up more than $1 billion in real estate sales in the 12 months, with the highest settled sale price sitting at nearly $2.5 million.
A lot of stock had come onto the market in the run up to Christmas, he said, but sold just as quickly, he said.
“Buyers in the market for a good-sized, modern family home are reconciled to the fact that it will cost them more than $1 million.”
In Dunedin, $1 million will buy a four or five-bedroom home in a good suburb with access to good schools. “If you want the absolute cream of the crop property, you’d have to pay $2 million. That’s not unseen in the Dunedin market now. We’ve been getting overseas inquiry at that level.”
The investor market was also buoyant, Nidd said, with mums and dad buyers trying to secure a deal before the loan to value ratios return.
Boding well for the market was the council’s revision of its district plan. “They made some positive moves and new projects are coming online. There’s a bit of increased density stuff coming online and the other really good thing for developers is they’ve removed the requirements for some parking.
“That means that land that was previously more or less undevelopable because of parking requirements is now a real prospect.”
Nidd added: “I am cautiously optimistic that over the next 24 months we’ll see a good number of new properties coming on the market.”
Neighbouring towns are also feeling the heat
Quotable Value area manager Tim Gibson told OneRoof that increasing numbers of first-home buyers were looking to Waihola, Milton, Waikouaiti and Palmerston for more affordable housing.
“Potential purchasers are finding it really tough to even get an offer considered in Dunedin these days.”
A tidy three-bedroom home on a quarter-acre section in Milton recently sold for $400,000, while a modernised three-bedroom bungalow with elevated lake views sold for $461,500 in Waihola and a three-bedroom home on a quarter-acre section with two bathrooms, new decking and a garage recently sold for $355,000 in Palmerston.
“You do have to factor in your commuting time and costs, of course, but you certainly do get a lot more bang for your buck in these areas. I can see why that would appeal to a first-home buyer who wants to get on the property ladder but isn’t willing or able to spend more,” Gibson said.
Picking the twists and turns of the market was difficult but he expects property prices to continue to push upward next year but at a slower pace.
“Only time will tell how much steam the reintroduction of loan-to-value rations (LVRs) will take out of the property market. I suspect it will probably cool things down a little, but we’ll still be left with too much demand and not enough houses and that should keep upward pressure on prices for the foreseeable future.”
