Data shows Dunedin economy pumping

The report noted Dunedin had enjoyed a "strongly positive'' quarter, particular in the city's housing and construction sectors. Photo: Stephen Jaquiery

Dunedin's economic upsurge has been highlighted again, as new figures point to a 15% jump in house prices and $84million in non-residential building activity coming down the pipe.

But the good news has come with another warning about the building industry's capacity to cope with the coming workload.

The commentary was contained in the latest Infometrics quarterly economic monitor, to March 2019, released yesterday.

The report noted Dunedin had enjoyed a "strongly positive'' quarter, particular in the city's housing and construction sectors.

Average house prices in Dunedin had risen 15%, to $432,494, in the year to March, compared with a 1.3% increase, to an average house price of $683,516, across New Zealand.

The demand for housing in Dunedin had driven a "seller's market'' and fuelled a response, as consents for new homes jumped 11.4%.

Non-residential consents - including the construction of new commercial buildings - were also up 17.5% in Dunedin, compared with 7.6% nationally, which represented $84million worth of new construction work in the city.

Infometrics also noted the "steady pipeline of work'' was not without its challenges for contractors, raising doubts about whether they were capable of delivering all of the required work.

"Although consent values continue to rise, capacity pressures remain, and we are concerned over the sub-industry's ability to convert these consents into completed work.''

Together, the figures contributed to a provisional estimate of 2% GDP growth for the city for the year to March, just below the national average of 2.5%.

Unemployment had dropped from 7.1% a year ago to 6.1% by March, but remained high compared with the national average of 4.3%.

Tourism figures were also diverging, as visitor spending grew 2.7%, to $772million, in the year, while total guest nights dropped 1.6%, to 928,480 nights, in Dunedin, compared with 0.6% growth nationally.

Enterprise Dunedin director John Christie said the divergent figures in part reflected the rise of Airbnb as an accommodation choice - which was not captured by the figures - and increasing visits by cruise ship passengers and crew, up from 254,750 to 352,148 in a year.

Dunedin’s key stats:

• 2% GDP growth.
• Average house prices up 15% to $432,494.
• Residential consents up 11.4%.
• Non-residential consents up 17.5%.
• Tourism spending up 2.7%.
• Total guest nights down 1.6%.
• Unemployment down 1% to 6.1%.

chris.morris@odt.co.nz