“Golden days” lie ahead for Dunedin, as the city basks in good economic times and looks forward to a construction boom.
The latest Infometrics quarterly economic monitor, released this week, noted “strongly positive” economic indicators for the city for the year to March 2019, particular in the housing and construction sectors.
In addition, the city’s population has risen 2.7%, gross domestic product is up 2%, consumer spending has risen 3.6% and tourism expenditure is up 2.7%.
Infometrics senior economist Nick Brunsdon said average house prices in Dunedin rose 15%, to $432,494, in the year to March.
Across New Zealand, average house prices increased 1.3% to $683,516.
In addition, residential building consents rose 11.4%, and non-residential consents – including the construction of new commercial buildings – were up 17.5% in Dunedin, the report said.
Otago Chamber of Commerce chief executive Dougal McGowan said the city’s gold rush days might be in the past, but “we are about to enter into what I believe will be its golden days”.
“We have growth and we have work looking forward and, although that comes with challenges, these are also opportunities for the future,” Mr McGowan said.
With the Dunedin Hospital rebuild and central city redevelopments coming down the pipeline, it was an exciting time.
“For the first time in a couple of generations, we can re-vision our city and change how it will be for the next 50 years.
“Very seldom do you get the opportunity to effect a multi-generational change in our city-scape,” he said.
Dunedin Mayor Dave Cull said Dunedin had experienced sustained growth in recent years and there was “a real buzz” about the city at present.
A significant number of the city’s new residents were in the 15 to 39 age group, and had been attracted here by greater opportunities and Dunedin’s “positive lifestyle offering”.
“The fact that a large cohort of new residents are in that working/family age bracket is a good sign that we are attracting the right kind of people to help ensure the economic sustainability of the city,” Mr Cull said.
However, the continued rapid increase in house prices was of concern, because it showed the housing supply was not keeping up with demand, Mr Cull said.
Established last year to investigate Dunedin’s long-term housing needs, the Mayor’s Taskforce for Housing recently recommended 16 action points to ensure affordable and accessible healthy homes.
The council had budgeted $130,000 each year for the next two financial years for this work, he said.
Mr McGowan also regarded the city’s housing cost and quality to be significant issues, along with the impact of forecast environmental issues and the cost to ratepayers and businesses of major city infrastructure projects.
“We also need to ensure that our success doesn’t mean we no longer meet our liveability targets for Dunedin,” Mr McGowan said.
Mr Cull said that, with about $10billion worth of construction projects forecast in the Otago region over the next 15 years (including the hospital rebuild), a construction workforce modelling project had been initiated to provide analysis of the labour demand required.