from my desk - market commentary September 2019
Spring has arrived and it's timely to reflect on a very busy year to date. This year really is flying by! The Dunedin property market continues to remain extremely buoyant with strong buyer interest reflected in high attendances at Open Homes and most properties being sold with multiple buyer offers. As a result most marketing campaigns are short, and very busy. The fundamentals remain the same in my time in real estate; premium presentation and promotion will result in a premium sale. Quality property information is also critical and results in increased buyer competition, unconditional offers, and a higher sale price.
There are a number of key factors that explain why Dunedin property values continue to rise. The governments decision to scrap the capital gains tax proposals earlier this year has definitely seen investors return to the property market, and Dunedin's yields are more attractive than many other main centres. The recent drop in the official cash rate is seeing record low interest rates on offer. Dunedin's core businesses, the university, hospital and schools, continue to attract people to Dunedin, where we enjoy a better lifestyle. Not to mention that compared to Auckland property prices continue to be much more affordable. So all the indicators that underpin our market are positive.
The new hospital build, and other large infrastructure projects bode well for the Dunedin economy. Technology success stories such as Dunedin's RocketWerkz point to a new business direction that fits our local economy; where distance from markets becomes irrelevant, the product doesn't require shipping, synergies with our education and knowledge economy fit well, and people can enjoy a better work-life balance.
Whether you're buying or selling getting the right advice is gold. Feel free to contact me for a chat.
Market Update - March 2019
Dunedin's house values have notched up the largest annual percentage gain of all the country's main centres - up 14.3% against February last year - the average value increasing annually from around $398,120 to $449,023.
Also, all of Dunedin's outlying areas; Peninsula and Coastal, Taieri, Dunedin South, Central and North also bettered not only the national average but all the other major centres. The outlying areas produced annual gains in a range from 12.8% right up to 15%.
Investors and first-home buyers are seeing plenty of value in Dunedin prices, and now that a possible Capital Gains Tax (CGT) has been put to bed this trend looks set to continue for the rest of the year.
Auckland booked a 0.9% decline on values compared with February last year, Tauranga was up 2.6%, Hamilton up by 5.8%, Wellington had risen 7.9% and Christchurch lagged at just 0.1%.
Quotable Value's general manager David Nagel said out of all the main centres, Dunedin was continuing to see strong value growth, posting an average city value of $449,023.
''The area continues to attract a broad range of first-home buyers and investors due to its value for money,'' he said.
''Interestingly, investors appear to remain fairly active,'' he observed.
Queenstown Lakes values were up 2.6% during the past quarter, to $1.20million, which was matched or bettered by several Auckland suburbs, with eastern Auckland city top at $1.55million.
QV's senior consultant in Dunedin, David Paterson, said there remained strong demand for properties up to $400,000, with multiple offers still a common scenario.
''With such demand, offers are often above expected value levels and this can cause problems securing finance,'' he said.
Around the various markets in the South Island, Southland led the way in quarterly growth, rising by 7.1%, followed by the Dunedin Taieri area up 6.1% and Dunedin South up 4.3%.
Mr Paterson said Dunedin Taieri led the way in annual growth, up 15%, followed by Dunedin South up 14.9% and Dunedin Central, up by 14.3%.
Mr Nagel said most of New Zealand's more affordable, smaller provincial towns continued to have solid value growth, while Auckland was still recording a slight drop in value levels. He said while Dunedin continued to have the strongest value growth out of the main centres, the Wellington market remained busy. Below is the February 2019 table:
Market Update - November 2018
Why Dunedin is New Zealand's Best Little City
Dunedin is booming
The timing couldn’t be better for business to capitalise on new opportunities. Both the University and the Polytechnic are investing in significant development upgrading their campuses. A $1.4B rebuild of Dunedin Hospital is due to commence around 2020. Early indications are that around 1,000 people will be needed in the city to assist in this project. Local Advisory Group convenor and former MP Pete Hodgson said the boom in the construction industry would not stop in 2026 when the hospital was completed. The University of Otago, Otago Polytechnic and the Dunedin City Council would be deliberately scheduling work for the years after the hospital build. “All this means that Dunedin’s construction sector is moving from a lower level of activity historically to a somewhat higher one for the next 12 or 15 years. “It isn’t going to be a boom and bust so much as one long and drawn-out boom.” (Source: www.odt.co.nz 18th July 2018)
Dunedin is a region of unique landscapes, is culturally rich, artistic, and has great heritage buildings
Enjoy getting close to rare wildlife and soaking up the quirky city vibe. Known as the Edinburgh of New Zealand, Dunedin is the country's city of the south, wearing its Scottish heritage with pride. Surrounded by dramatic hills and at the foot of a long, picturesque harbour, Dunedin is one of the best-preserved Victorian and Edwardian cities in the Southern Hemisphere. The accommodation is good and plentiful; the nightlife buzzes with funky bars and delicious restaurants and the natural attractions are unique and fascinating.
Dunedin is a confident commercial centre with a global focus and a strong emphasis on design and innovation, underpinned by cohesive business connections and a burgeoning talent pool. The city is enriched by successful businesses that produce cutting-edge products and services selling into global markets over a sustained period.
Strong knowledge base
As a city, Dunedin is fortunate to have acclaimed educational institutions and a number of businesses with strong research networks and a robust focus on R&D. Students, academics and entrepreneurs all contribute to:
the internationally recognised research capability of the University of Otago
the product development and market-testing expertise of the Otago Polytechnic
high investment in R&D by local industries.
Innovation and talent
Dunedin people are smart and resourceful, and this is a youthful city. Health technologies and biotechnology, niche manufacturing and engineering, ICT and creative industries have all grown over the past decade, benefitting from a workforce of educated, talented people.
As at June 2012, 70.7% of Dunedin’s population were of working age (15–64) compared to 66.1% of New Zealand’s population. (Statistics New Zealand 2012)
The style of doing business is open and relaxed, based on personal reputation and integrity. Dunedin’s small size makes it perfect for creating and fostering networks.
Dunedin's residents enjoy a high standard of cultural, leisure, public and natural amenities. The city boasts an enviable range of parks, reserves, tracks and cycleways. Our world-class venues and community facilities cater for everything from sporting events to concerts, exhibitions to festivals. And we have New Zealand’s largest collection of heritage buildings, some creatively restored for commercial and residential use, others enjoyed as churches, theatres and galleries.
A great lifestyle - and awarded most beautiful New Zealand city 2018
Dunedin has a strong sense of place and cultural heritage, held together by active social networks and a commitment to local community. It’s easy to get around the city, and the housing is affordable.
Residents say housing is the most affordable in the country and also rate the city as having the greatest sense of community, with 84% of those surveyed feeling they had a positive overall quality of life. (Quality of Life Survey 2014)
The average travel time for vehicles on key suburb to city routes at peak times during the morning shows the average travel time on the four key routes measured is less than 15 minutes. (Dunedin City Council Annual Plan 2013/14)
Nourished by a stunning natural environment with more green space per person than any other city in New Zealand, Dunedin residents enjoy the benefits of a focus on environmental sustainability.
Dunedin has a fantastic food scene - click on the link below to check out this review:
Market Update - July 2018
Dunedin Property Selling Fastest Of All Main Centres
Dunedin's housing market continues to soar as new research reveals the city is one of the two fastest-selling areas in New Zealand, taking on average just 15 days to sell a house.
In Mosgiel, 314 properties were sold from June 2017 to June 2018 taking on average 13 days to sell - making it the third-fastest selling suburb in New Zealand.
Northeast Valley (16 days), St Kilda (17 days), South Dunedin (17 days) were also listed inside the top 25 fastest-selling suburbs.
Metro Realty managing partner Mark Stevens said property in Dunedin was selling quicker than at any time during his 33 years in the business.
Increased interest from outside the city - both national and international - combined with a lack of available land and properties had led to the selling fever, he said.
"There's a big shortage of land in Dunedin which, in my opinion, is pushing up the prices and pushing those sales."
CoreLogic NZ senior researcher Kelvin Davidson said there was a tendency for the fast-moving areas to also be cheaper.
Of the suburbs where properties were selling in under three weeks, 19 had median property values of $500,000 or less, Mr Davidson said.
Dunedin has bucked the trend of several other main centres and maintained residential property value gains of 4% during the past quarter.
Values remained "relatively high" as low interest rates, the loosening of the Reserve Bank’s loan-to-value ratio restrictions, and the government kick-start packages, such as the KiwiSaver HomeStart grant and savings withdrawal, continued to fuel demand.
However quarterly value growth had come "virtually to a standstill" across the Auckland and Wellington regions, and was "flat" in Hamilton, Tauranga and Christchurch.
"Dunedin is the only main centre to buck the trend, where entry-level prices remain comparatively low and well-located properties continue to demand high prices," Mr Nagel said.
QV Dunedin property consultant Aidan Young said Dunedin values had continued their upward trend, rising 9.4% during the year to May and 4% over the past three months.
"Multi-offer scenarios are common-place, which gives us an indication of how busy the market is," Mr Young said of Dunedin.
The city’s average value is $408,827, while Dunedin South saw the strongest growth with values up 10.3% year on year and 4.5% over the last quarter to $390,162, he said.
He described the Dunedin market as "robust", with both entry-level properties and premium properties selling "reasonably quickly", provided they were priced right.
"The city’s premium suburbs within close proximity to the CBD or the beach, such as Maori Hill or St Clair, continue to attract demand and high values," he said.
Mr Young reported entry-level properties, below $300,000, had continued to sell quickly, particularly in suburbs such as Caversham and South Dunedin, and also Waikouaiti settlement, north of Dunedin.
He said Dunedin values should still steadily grow — or at least hold their value — over winter, given the usual winter slowdown period meant listing numbers declined, but demand was showing no signs of dropping significantly.
Market Update - June 2018