House Prices in Freefall, Sell! Sell! Sell!
Figures released by the Real Estate Institute of New Zealand show that over the last year Dunedin house prices have seen the largest fall of all major cities in the country.
In August 2011 the median house price in Dunedin was $260,000. As of August 2012, a significant $20,000 has been knocked off the average price. Not only Dunedin Central prices have dropped; there have been similar falls in house prices in Queenstown and the hotspot of Balclutha. Perhaps due to the price drop, the number of houses sold has remained steady and houses are taking less time to sell.
It is important to note that there is some fluctuation each month, with July 2012 recording a median sell price of $254,000. The website landlords.co.nz noted that as of July 2012, Dunedin house values were 3.8% up on the same time in 2011, but house values were still at 4.0% below the 2007 peak.
Although the current trend in low house prices is good news for those hoping to pop their house-buying cherries, real estate agents are using pessimistic and unintentionally punny words such as “flat” to describe the situation.
An indication of the dire state of the Dunedin property market lies in the belief expressed by property valuer Tim Gibson that Mosgiel is a “good suburban area” that is extremely popular for house hunters. Critic speculates that this goes beyond mere commercial puffery into the territory of downright misleading conduct. Gibson then confirmed what was already clear from his over-enthusiasm for Mosgiel: “There continues to be a shortage of good properties on the market.”
Other main centers in New Zealand such as Auckland are continuing to experience rapid increases in house values.
Despite Dunedin showing that it is a city where buyers can get more bang for their buck, the city is no exception to the nationwide trend towards having more active home buyers, an increase in first home buyers and increased investor activity.
Due to the worth, or lack thereof, of Dunedin properties, it would seem logical that student rent should be lowered to reflect the property market. Landlords would likely reply to any such suggestions that hell will freeze over before they lower student rent.