Property still tight market

Prices reflecting short supply

NEW figures show what is becoming the same old story with housing in Dunedin — average values and demand are high, while supply is unable to keep up.

CoreLogic’s house price index for October found the property market nationwide was growing at a faster rate than it was in February 2020 — before Covid19 took hold in this country.

Of the main centres Dunedin’s average price has grown the most in the past 12 months, up 14% to $554,420.

CoreLogic’s price is based off the mean, or average, value of all houses in the area, whereas the Real Estate Institute (REINZ), which last released figures for September, bases its figures off the median price of houses sold.

REINZ had Dunedin’s median prices at $568,000 in September.

CoreLogic’s figures found the city’s prices were up 1.3% on the previous month.

In its commentary on Dunedin, CoreLogic said the increase of house values had ‘‘led to a significant reduction in affordability over the past few years’’.

‘‘Investors remain a consistently strong presence here, and firsthome buyers are also taking advantage of favourable lending conditions,’’ it said.

Nidd Realty owner Joe Nidd said he was starting to see listings increase but ‘‘it’s still not enough to meet the demand fully’’.

‘‘We still have a lot of buyers being disappointed [in] most of the middle of the range sales (everything between $400,000 to $600,000) particularly. There’s a lot of people competing for those properties.’’

He said demand for houses was continuing in a sustained way, ‘‘the limited supply that’s coming to the market would appear to be nowhere near meeting it’’.

Prices had been ‘‘slightly less ballooning’’ in Christchurch because of a building boom that took place there after the earthquakes.

‘‘You’re seeing those properties trickling into the market at a rate that gets closer to meeting the required supply.

‘‘And it’s just not what we’re seeing here. The only . . . significant increase in supply that we’re seeing in the Dunedin market’s in Mosgiel. If someone wants to live in the city, the competition is huge and the number of newly built properties or apartments . . . is very, very low.

‘‘Until that changes . . . it’s very unlikely we’re going to see a shift in that balance between supply and demand.’’

CoreLogic’s average prices for other parts of the South were mixed with Queenstown down and Invercargill up.

The average value for Queenstown was $1,150,718 — down 4.3% on last year.

In Invercargill it was at 362,380 — up 13.7% on last year.

CoreLogic head of research Nick Goodall said it was clear moves by both Government and the Reserve Bank had pushed up house prices.

‘‘Indeed, the RBNZ has acknowledged a consequence of its monetary policy is increasing asset prices, but that this is a better outcome than the counterscenario of a loss in confidence, resulting in decreasing property values.’’

Mr Goodhall said the supply of houses across New Zealand now was ‘‘hovering at all time low levels’’.