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 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 ($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 slow down 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 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.
This article was originally published on RNZ and re-published with permission.