Dunedin’s rising star
Dunedin is enjoying record house prices, a tourism boom driven by international concerts and sports events, and is readying for a mini-construction boom. Is this the hottest town in the south? Debbie Jamieson reports.
Television personality Melanie Kerr moved to Dunedin for a nine-month work stint with her husband and three sons in February. ‘‘Two weeks into being here we looked at each other and said: ‘Do we live here now? Yeah, we do!’,’’ the former Good Morning presenter said of her new home.
Kerr grew up in Ohope, in the eastern Bay of Plenty, lived in Auckland and had never visited Dunedin.
Within weeks they were house hunting and were delighted to secure a 1920s three-bedroom home in the exclusive suburb of Maori Hill for $575,000.
Promotional material described it as ‘‘an opportunity for those looking for a serious project’’ but Kerr couldn’t be happier with the home and her new life.
‘‘Dunedin just fits us. It feels like coming home. The people are amazing, generous, clever, funny, laid back and understated. The architecture is stunning and there’s a sense of permanence. They haven’t done what Aucklanders have done and made their homes their commodity. Their home is a place to park and raise their family – not the next place to buy and sell to rise to the top.’’ Yet the real estate business is in record territory.
Real Estate Institute of New Zealand (REINZ) figures released this week showed sale prices in the southern city hitting a new high. In October the median house price was $430,000 – a significant 15 per cent jump on a year earlier.
Those figures reflect the average recorded sale price compiled by Quotable Value NZ for the same month – $437,673.
They don’t surprise REINZ Dunedin spokeswoman Liz Nidd, who attributes the increase to the city’s Scottish/ Presbyterian background. It doesn’t have the big spikes of an Auckland or Queenstown, but more measured, steady-as-you-go, rises, she says.
‘‘We often continue to have a rise after other places have pulled back. That’s what we’re seeing this time. The statistics are just continuing to go up and up and up.’’
So is the population. In 2016 Dunedin gained 1800 people. In 2017 the population increased by 1900 to 128,800.
The 1.4 per cent growth rate sits under the national growth rate of 2.1 per cent but that’s all right with Dunedin mayor Dave Cull, who says it is no race. In fact, it is a slower growth than the city saw between 2001 and 2006 when the population rose 3.8 per cent.
‘‘The long term context is that Dunedin has been a lowgrowth city for decades,’’ says Cull. But he is seeing another change emerging; an increase in younger people moving to a town.
‘‘The significant aspect is that a very large proportion of last year’s increase was people aged between 15 and 39. We need that working family age group for a sustainable community.’’
One of the attractions for a younger age group is the relatively modest house prices.
Two hours drive away in Cromwell the median value of a house is over $630,000. Another hour down the road and Queenstown has the most expensive average prices in New Zealand at over $1 million. It is difficult to untangle the chicken and egg relationship of property price increases and population growth but the statistics show that about half of Dunedin’s recent migrants came from within New Zealand and general manager of Edinburgh Realty Mark Miller believes some of that shift has been driven by house prices.
‘‘A few years ago we were having a lot of people from out of town and international people investing here. That’s abated a little bit . . . Now we’re seeing some cashing out of the Auckland market while it’s still above what they paid.’’
For some that means creating a new income stream by buying a residential and investment property in Dunedin, or buying a home in Dunedin and a holiday home in the seaside towns of Karitane, Waikouaiti or Taieri Mouth.
Nidd has been marketing stylish new homes in the seaside community of St Clair for ‘‘inquiries over $885,000’’ and has sold the first two to New Zealanders returning from Perth and people from Queenstown.
‘‘Fifty-five per cent of the inquiries came from Auckland and Queenstown . . . I actually had people say to me something I don’t think I’ve heard in 30 years; that the price seems really reasonable.’’
However, it seems there are many other reasons for people making the shift to Dunedin. Miller points to the all-weather Forsyth Barr Stadium and events such as the Ed Sheeran concerts at Easter attracting visitors to town.
Once people are in Dunedin they are introduced to the Dunedin lifestyle, he says.
Various promoters of the city list the easy commutes, scenic beaches, mountain biking, the weather, good schools, an increasingly rich calendar of cultural and sporting events as key attractions, which is exactly what the Dunedin City Council was aiming for when released its 10-year Economic Development Strategy in 2013, Cull says.
‘‘We came to the conclusion it’s not simply about raising the GDP or coaxing companies to start up.
‘‘We realised that business and employment opportunities are made up by people. The aim is to make the city attractive, including our lifestyle offering.’’
Anecdotally, he hears a key reason people are coming to Dunedin now is for the lifestyle.
‘‘It’s cultural, sporting and recreational. We don’t sit in traffic jams all day and housing is more modestly priced than in other cities.’’
No-one is expecting the population growth to abate. The impending $1.4 billion hospital rebuild is anticipated to provide a ‘‘medium-boom’’, employing 1050 workers, many of whom will have to come from outside the city. There are plans for a massive harbourside redevelopment, about $20 million of public spending on a ‘‘piece of art’’ city bridge and millions of dollars expected to be spent on new Otago University buildings.
The impending risk everyone sees is a lack of housing. Miller says there is already a massive shortage of supply ‘‘across the spectrum’’.
‘‘This year is the first time we’ve experienced this in earnest all through winter. The price went up through the winter months, which is unheralded.’’
Nidd says the biggest struggle is a lack of family homes. ‘‘We sold a little bungalow last week and had five offers and every one of those people had missed out on previous properties.’’ Facing the prospect of that getting worse, Cull has established a mayoral taskforce on housing to look at creating development opportunities including for worker accommodation and social housing.
‘‘We appreciate that an increase of demand against supply is only going to hurt the people at the bottom.’’
Regardless, even newcomers such as Kerr are sensing a growing excitement surrounding the city.
‘‘I don’t know why everyone doesn’t live here,’’ she says. ‘‘You can’t live in Dunedin and not be a better person for it. Everywhere you look, by nature of design there’s beauty . . . It’s a good place for the soul.