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Bayleys Research


JUNE 07 DUNEDIN RESIDENTIAL REPORT

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Dunedin Residential 2007

Residential property values in Dunedin continued their upward trend in 2006 with the median dwelling sales value reaching $245,000, an increase of $17,000 or 7.5% over the year according to the Real Estate Institute of New Zealand (REINZ) statistics. The first quarter of 2007 has seen values consolidate possibly as a reaction to the latest increase in interest rates.

Although median values levelled off in the March 2007 quarter, the local residential market has performed strongly in recent years with the median value increasing by 132% in the five years from March 2002 to 2007.

 

Despite the recent levelling off in values, the six month period to March 2007 witnessed an increase in sales activity with 1,570 sales reported to the Real Estate Institute of New Zealand, the highest six month total since the October 2003 to March 2004 period which was at the peak of the latest housing boom.

The figures highlighted above indicate an apparent balance in the market between vendor’s expectations and purchaser’s willingness to pay.

The levelling off of values has also removed some of the pressure on purchasers. While prices were increasing rapidly as they were in 2003 and 2004, purchasers were forced to commit to buying quickly or risk having to pay more for a similar property in the future. The release of the pressure is reflected in the average number of days that it takes to sell a property. During the height of the market in 2003 and 2004 the median days on market figure ranged between 15 and 21 days. In the March quarter of 2007 the figure has increased to 28, a level that it has been at or near for the last year.

While it is still too early to fully gauge the longer term impact of the latest increase in borrowing costs on the Dunedin residential property market, recent figures would suggest that median values are likely to remain steady until borrowing costs begin to trend downwards again, however transaction numbers remain strong showing the local market to be in a generally healthy state.

 

 

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