Real estate company Colliers Otago has released its annual review and outlook of the local property market for 2021-22.
It said Dunedin’s property market had seen steady growth across all sectors, with population growth along with good increases in student enrolments helping the market.
Commercial yields had compressed significantly, driven by low interest rates and confidence on the back of planned infrastructure developments.
Colliers Otago director Joe Chapman said supply of stock in Dunedin’s commercial and industrial markets had historically been tight with location limiting development.
The market had become even tighter over the past year with a noticeable increase in investor activity, he said.
Dunedin had become popular with out of town investors who wanted a ‘‘slow and steady’’ return on their commercial investment.
As investment yields dropped in Auckland and Wellington, investors had turned to smaller cities like Dunedin seeking a better return for their money, Mr Chapman said.
Industrial development was starting to gain traction in North Taieri after a slow start, with a Dunedin City Council plan change delaying the process.
Multiple businesses had relocated from central Dunedin to new-build properties specific to their requirements, Mr Chapman said.
‘‘It is finally at a point where it is worthwhile to move out there.’’
The hospital rebuild and new ACC office construction, as well as both Otago Polytechnic and the University of Otago having large capital spend projects under way, was giving investors confidence, Mr Chapman said.
In the residential housing market, central city apartments had become very popular as people bought investment properties for their children while they were at university and young professional couples wanted to get on the property ladder, Mr Chapman said.
