Two months into the year seems like a good time to look at how the local real estate market is faring. 

The news for Central Otago is generally positive, with the latest statistics (January 2023) from REINZ supporting the gut feeling of local agents that we are doing better than many other places.

The median house value nationally declined 13.3% in January 2023, but that is reduced to a 9.3% decline if we exclude Auckland. While Otago as a whole dropped 11%, in comparison, Queenstown/Lakes area median values declined by only 1.6%.

The market in our area has softened, but nowhere near as much as in other parts of NZ. 

Overall, the figures tell us that NZ has become a land of two markets: urban centres that are experiencing a larger downturn, and rural areas where median values are moving backwards more slowly. 

That slight softening is having an impact, however.

Sales in Central/Otago Lakes were down 15.4% in January 2023 compared to January 2022. Last year 15 houses sold in Alexandra/Clyde in January; this year it was eight. In Cromwell, in January 2022 there were 37 sales compared to nine this year.

Nationally, new listings are down 16%, and it now takes 53 days to sell on average, 16 days longer than in January 2022. 

Otago’s median price for January 2023 had dropped 11.6%, but that includes Dunedin – one of the cities feeling the pinch. Auckland, meanwhile, has seen the median price plummet by 21%.

Statistics like these are useful, but they don’t tell the whole story – in part because they lag real world trends by a month or so. 

On the ground, the feeling here in Central is that while there might be a bit more softening to come, we should be pretty well protected from any major real estate downturn.

There are a few reasons for that:

• Urban flight to this region has remained steady since Covid19 took hold. We expect that to continue, especially with the adverse weather events up north. 
• The Otago economy is holding up well and that attracts people.
• The job market is still tight. Even as interest rates or mortgage refinancing bites, workers are in such demand here wages will need to compensate to retain people. 
• Demand for holiday homes is still high from our traditional markets of Dunedin and Southland, helped by a beautiful summer.

There’s still a heavy demand for rental accommodation in our area, but we have recently heard that a lack of management and cleaning staff has some B&B owners considering

reverting back to long term rentals.

In February, which we don’t have figures for yet, there was a noticeable increase in viewings and multi-offers and it feels like a bit of momentum is gathering. 

Good, well-presented homes, especially lifestyle blocks, are in demand.

As always, if you see something you love, snap it up – though it will be a distinct advantage if you are a cash buyer. 

If you want any further information, as a buyer or seller, get in touch with us at Tall Poppy.