According to the latest CoreLogic NZ housing affordability report, Dunedin reflected many of the nationwide trends despite being better off than most New Zealand cities when it comes to affordability.
Overall, housing in the city is more affordable than it was at the peak of the post-pandemic housing boom in late 2021 and early 2022, but was still worse than the long term average, measured over the past 20 years.
Over the past five years, Dunedin’s average property value had risen 45% to $630,582 while the average annual household income grew 24% at $105,511 — a value to income ratio of about 6, compared with a long term average of 4.6.
The national ratio is 7 and the long term average is 5.9.
Tauranga topped the list with a ratio of 8.5, closely followed by Auckland on 7.7, and Christchurch reported 6.6.
The Queenstown/Lakes District was the worst off down south, with a ratio of 12.4, while Invercargill and Gore reported ratios of 4.1 and 4 respectively.
Housing affordability worldwide had become more difficult post-pandemic, and New Zealand was following trends prevalent in a majority of the western world.
He said the median sale price in Dunedin was significantly lower than other areas of the country, and was still comparatively affordable despite the growth seen around the country.
The median price would have to change dramatically in order to exceed a ratio of 7, in line with the national average.
Mr Hynes said the Dunedin market had historically experienced significant surges for two to three year periods, namely between 2018 and 2021.
Otherwise, the price growth in the market remained relatively stagnant, and Mr Hynes suspected the 45% growth would eventually iron itself out and stabilise over the coming years.
"The market generally tends to correct itself and I don’t expect that will be applicable and be the same for the next five years."
Over the past five years, the proportion of income Dunedin residents allocated towards their mortgage repayments rose from 29% to 43% — the report estimating it would take property owners eight years to save for a deposit.
Meanwhile, the rent to income ratio sat at 22%, on par with the national average.
Mr Hynes said when faced with the choice between home ownership and renting, many Kiwis opted for the former in hopes that capital gain would occur in the long term.
"It is a reasonably prudent mindset that most people would have.
"Potentially offsetting through capital gain in year’s down the track is obviously what a lot of the general public would be banking on."
Value to income ratio
| Dec 2023 | |
| Central Otago | 7.5 |
| Queenstown Lakes | 12.4 |
| Clutha | 3.8 |
| Southland | 4.3 |
| Gore | 4.0 |
| Invercargill | 4.1 |
