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Dunedins property market is still running hot - CoreLogic Pulse

Fuseworks Media
Fuseworks Media

Off the back of strong population growth and only modest increases in its dwelling stock, average property values in Dunedin continue to grow by 15% or more annually. The general tightness is well illustrated by property in many suburbs only having taken about a week to sell lately. It’s hard too see this momentum coming to a halt anytime soon, but a rising pipeline of new dwelling consents and stretched affordability pressures could slow the market later next year or into 2021.

CoreLogic Senior Property Economist Kelvin Davidson writes:

Dunedin’s residential property market continues to boom, with average values up by 17% over the past year alone (or nearly $74,000) and by 73% (roughly $214,000) since the upswing began in early 2015. On top of that, far from slowing down, the annual pace of growth in values has actually accelerated again in the past 12-18 months (see the first chart). What’s driving this and can it roll on into 2020?

For a start, the simple economics of the matter are that demand growth is exceeding supply. Indeed, as the second chart shows, after a run of years up to 2009-10 where the stock of housing (supply) in Dunedin grew by more than its population (demand), the opposite has occurred since 2014. In this environment, it’s no surprise that values are increasing, and one key contributor to the rise in demand lately will of course have been the hospital rebuild and the need for the influx of workers to live somewhere.

Read the full story in our Property Pulse - attached.

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