Property Market

10 min read

How is the Otago property market going?

Ed solo

Author: Ed McKnight

Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.

Reviewed by: Laine Moger

Journalist and Property Educator with six years of experience, holds a Bachelor of Communication (Honours) from Massey University.

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Otago's median house price is $670,000

Otago house prices

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As at February 2024, the median house price in Otago is $670,000. This is up from $305,000 10 years earlier. That means that the median Otago property increased in value by 8.19% each year, or $36,500 on average.

The most expensive suburb in Otago is Arrowtown, which has a median house price of $2,285,900 and is located in the Queenstown-Lakes District district. That means that Arrowtown's median house price is 341% of Otago’s median.

The least expensive suburb in Otago is Palmerston, which has a median house price of $397,100 and is located in the Waitaki District district. That means that Palmerston's median house price is 59% of Otago’s median.

Over the last 24 months (Mar 2022 - Mar 2024), Lake Hawea had the fastest-growing house prices in all of Otago, at 7% per year.

The suburb that grew the slowest over that period was Ravensbourne, which grew at a rate of -10% per year.

NZ Property Market Update: February 2024

Otago's house price is 14.57% above its long term average

Is Otago over or undervalued?

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Otago house prices look relatively expensive compared to where we'd expect them to be.

In the above graph, when the purple line is below the baseline (black line), Otago's house values are undervalued. This suggests there is a buying opportunity in the region.

When Otago’s house values are above the baseline, other regions have buying opportunities.

How is this calculated? Click on the accordions below to find out.

Investing in Dunedin: Pros, Cons, & Considerations for Property Investors

Where do house prices grow the fastest in the Dunedin property market?

This map lets you find out for yourself.

Each area represents a different suburb, and the colour of the area represents how quickly house prices have increased over the past 20+ years.

The redder the area ... the quicker house prices have grown in that suburb.

Which Dunedin suburbs have the highest yields?

Gross yields vary widely depending on which suburb you chose to investigate.

So, which suburbs in the Dunedin property market have the highest gross rental yields?

Navigate the map to find the suburbs where houses produce the most cash for their investors.

Where are the most affordable properties in Otago?

The map below depicts which districts within the Otago Region have the most and least affordable house prices (REINZ, February 2024).

The darker the district, the more expensive the median house price for that area.

The Queenstown-Lakes District is the most expensive district within the Otago Region, with properties reaching a median price of $1,545,000 in February 2024.

By comparison, the Clutha District is the most affordable, with a median house price of just $380,000. That's a $1,165,000 difference compared to Queenstown-Lakes District.

Where are house prices most over and undervalued within the Otago region?

This map shows a breakdown of how over or under-valued each council area is right now in the Otago property market. These figures are calculated exactly the same way as the HPI based graph in the above section.

Queenstown-Lakes District appears to be the most overvalued area in Otago. House prices there are about 29.83% above where we would usually expect them to be over the long term.

Dunedin City, on the other hand, appears to be the least overvalued in Otago. House prices in this district appear to be 3.69% above where we would expect them to be.

This means that we've got greater confidence that Dunedin City house prices will increase faster over the next 5-10 years compared to Queenstown-Lakes District.

Which part of Otago gets the highest population growth?

The map below illustrates the projected population growth for each district within the Otago Region over the next 25 years (2023 - 2048).

The darker the district, the more the population is predicted to expand in that area.

Over this period, Queenstown-Lakes district is expected to see the most growth of all the council areas within the region. 37.70% in total.

By contrast, Clutha district is expected to grow by 0.80% over the same timeframe.

How are Otago's house prices changing right now?

Otago's capital growth rate

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The above graph shows how quickly house prices have increased or decreased over the previous 12 months. This is also known as ‘capital growth’.

So does this show how the property market is going right now?

Yes and no.

It shows how expensive properties are today compared to 12 months ago.

While this will give us a good sense of how property values have changed, it’s not the only thing to consider.

You might also look at how quickly property values are going up (or down) from month to month, the number of property sales and how quickly properties are selling.

What is the median rent in Otago?

Otago's median rent

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The above graph shows the median rent within a given month.

The data comes from the Ministry of Business Innovation and Employment (MBIE) and is provided through their Tenancy Services website.

Their data is based on all the rental bonds lodged by private landlords within the month.

What is the annual increase in rents in Otago?

Otago's annual increase in rents

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This graph shows the annual growth in median rents.

The data also comes from the Ministry of Business Innovation and Employment (MBIE).

How many listings are currently available in Otago?

Otago's current listings (Housing stock)

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This graph shows current property listings, with data sourced from realestate.co.nz.

It shows the number of listings that are currently available on the website per month.

You might be wondering: “How do the number of listings impact house prices?”

If many listings are available, then people will think there is lots of supply. This means that people feel like they can take their time choosing a property.

This leads to less competition and softer house prices.

On the other hand, if there aren’t many listings available, people will feel like there is a shortage of houses. This leads to FOMO (fear of missing out).

This makes people more competitive and more likely to bid up house prices.

How many properties are sold per year in Otago?

Otago – Number of properties sold per year

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The above graph shows the total number of properties sold over the prior 12 months. For example, if looking at the data for August 2023, the graph will show all the sales between September 2022 – August 2023.

The data comes from the REINZ Market Insights Report and The Real Estate Institute of New Zealand (REINZ) collects data directly from agents.

You might be wondering: “How does the volume of sales impact house prices?”

They don’t impact house prices on their own. But a high number of sales represents a hot property market.

That’s because there are a lot of people out there buying property.

That’s why when sales volumes are high, property prices typically increase at the same time.

When property sales are falling, typically, property prices are also soft.

Dunedin City suburb prices

Dunedin

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Dunedin City is made up of 64 suburbs. The most expensive suburb is Maori Hill, which has an average house value of $1,013,300. While the most affordable suburb is South Dunedin, which has an average house value of $407,700.

Over the last 24 months of all the Dunedin City suburbs (Mar 2022 - Mar 2024), Vauxhall had the fastest-growing house prices at -1.31% per year.

The suburb that grew the slowest over that period was Ravensbourne, which grew at a rate of -10.22% per year.

Queenstown-Lakes District suburb prices

Queenstown-Lakes

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Queenstown-Lakes District is made up of 16 suburbs. The most expensive suburb is Arrowtown, which has an average house value of $2,285,900. While the most affordable suburb is Sunshine Bay, which has an average house value of $1,042,200.

Over the last 24 months of all the Queenstown-Lakes District suburbs (Mar 2022 - Mar 2024), Lake Hawea had the fastest-growing house prices at 6.61% per year.

The suburb that grew the slowest over that period was Lower Shotover, which grew at a rate of 0.67% per year.

Central Otago District suburb prices

Central Otago

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Central Otago District is made up of 10 suburbs. The most expensive suburb is Mount Pisa, which has an average house value of $1,296,600. While the most affordable suburb is Ranfurly, which has an average house value of $418,750.

Over the last 24 months of all the Central Otago District suburbs (Mar 2022 - Mar 2024), Mount Pisa had the fastest-growing house prices at 5.03% per year.

The suburb that grew the slowest over that period was Cromwell, which grew at a rate of 0.38% per year.

Clutha District suburb prices

Clutha

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Clutha District is made up of 9 suburbs. The most expensive suburb is Balclutha, which has an average house value of $418,700. While the most affordable suburb is Milton, which has an average house value of $401,450.

Over the last 24 months of all the Clutha District suburbs (Mar 2022 - Mar 2024), Balclutha had the fastest-growing house prices at -3.19% per year.

The suburb that grew the slowest over that period was Milton, which grew at a rate of -4.25% per year.

Waitaki District suburb prices

Waitaki

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Waitaki District is made up of 10 suburbs. The most expensive suburb is Omarama, which has an average house value of $584,600. While the most affordable suburb is Palmerston, which has an average house value of $397,100.

Over the last 24 months of all the Waitaki District suburbs (Mar 2022 - Mar 2024), Palmerston had the fastest-growing house prices at 1.37% per year.

The suburb that grew the slowest over that period was Oamaru, which grew at a rate of -3.05% per year.

Other property markets to look into

If you found this article useful, then you might also like our analyses on the other property markets in New Zealand. You can read all about the Auckland property market, the Wellington property market and the Christchurch property market by clicking any of the links mentioned here.

Write your questions or thoughts in the comments section below.

Opes Partners
Ed solo

Ed McKnight

Our Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.

Ed, our Resident Economist, is equipped with a GradDipEcon, a GradCertStratMgmt, BMus, and over five years of experience as Opes Partners' economist. His expertise in economics has led him to contribute articles to reputable publications like NZ Property Investor, Informed Investor, OneRoof, Stuff, and Business Desk. You might have also seen him share his insights on television programs such as The Project and Breakfast.

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