Winter is here

Winter has settled in across Otago and Southland… bringing with it our love for grass roots rugby, skiing in the alps, or sitting in front of a glowing log fire with a good glass of Central Otago pinot noir watching the talented Southern Steel netball team which we have recently partnered with.

Activity around the Lower South Island residential property markets was somewhat subdued in April 2025 – notably due to a combination of school holidays, ANZAC Day, and Easter all falling within the period.

Pundits will now be watching the Lower South Island residential property market closely over winter - when market activity historically tends to slow down as both buyers and vendors tend to hibernate.

Conversely though, this environment creates brilliant opportunities for vendors and buyers looking to make a move while the ‘competition’ is on the sidelines, allowing them to jump in and successfully conclude a deal over the coming months.

Westpac bank’s Economic Overview for May notes: “Price gains are still very gradual for now as the housing stock available for sale has matched increased demand. Prices should continue to rise by six percent year-on-year as lower interest rates are more broadly felt and when the labour market strengthens.

The bank’s research also gave strong acknowledgement to the economic sectors which largely underpin Otago and Southland’s regional economies. “Strength in commodity export prices is also boosting primary sector incomes. Combined with continuing recovery in international visitor numbers (ie: Queenstown), regional centres are seeing stronger conditions than major urban areas,” says the Westpac overview. So what is going on specifically in the Lower South Island from this perspective?

Top performers

The latest Real Estate Institute of New Zealand sales data for April 2025 for the Dunedin, Otago, Southland, Invercargill, Queenstown Lakes, and Central Otago districts uncovered a telling fact – that Otago and Southland recorded the most residential sales in any April since 2018. Concurrently, the REINZ’s House Price Index ranked Southland as the top performing region in New Zealand for year-on-year movements, with Otago taking out third spot.

The Real Estate Institute of New Zealand data identifies that the residential property median price in Otago rose 6.4 percent over the 12-month period to the end of April to now sit at $745,000, up from $700,000 a year prior.

Broken down into districts, the median prices within Otago are now:

• Central Otago - $795,000
• Clutha – $400,000
• Dunedin City - $600,000
• Queenstown-Lakes – $1,466,000
• Waitaki District – $439,500

The REINZ data for the month of April tracked that in the greater Otago region as a whole, the current median number of days to sell a residential property now sits at 47 days – with 17 weeks of inventory available for sale, three weeks less than the same time in 2024.

Real Estate Institute of New Zealand acting chief executive Rowan Dixon commented that first home buyers remained the most active group in the province, followed by owner-occupiers.

That buyer niche has also been highlighted in the May Property Report produced by respected independent economist Tony Alexander.

“The residential real estate market in New Zealand has been driven for two years now by young buyers, and they remain in attendance – taking advantage of their buying power amidst a plethora of property listings,” said Tony Alexander’s survey research. “Despite mortgage interest rates falling two percent since the middle of last year, we remain firmly in a ‘buyer’s market’. The intensity of this buyer’s market is slowly increasing. The country was only in a ‘seller’s market’ for a very short period of time in the middle of 2023.

“Unsurprisingly, with buyers feeling that it is vendors who need to bring something extra to the table – such as a lower price or acceptance of conditions, and with high stocks of property listings – very few buyers feel that holding off will cause them to miss out on a good purchase,” added Tony Alexander.

Southern surge

Meanwhile down in Southland, the REINZ statistics spotlight that Southland region had the highest increase in sales of any region in New Zealand – up 28.7 percent year-on-year. Median residential prices for the Southland Region as a whole rose 6.6 percent from $455,000 to $485,000 over the 12 months to April this year, while the median house price in Gore District rose 27.6 percent from $380,000 to $485,000. Elsewhere within the province, the median prices now for homes are:

• Invercargill City - $467,000
• Southland District - $505,000

REINZ acting chief executive Rowan Dixon said that as in Otago, owner-occupiers and first home buyers were the most active groups within the Southland Region market.

The figures show there are still healthy results to be achieved when selling residential property, and that long term, property is a sound investment…. as outlined by the latest figures from global real estate data monitoring and property trends analysis agency Cotality, previously known as CoreLogic.

For the first three months of the year, New Zealand home owner-occupiers achieved a gross profit of 91 percent on the sale of their residence from when it was originally purchased. The national average profit made by home owner-occupiers over the first quarter of 2025, according to Cotality, was $280,000.

While market activity may go off the boil over winter, the team at Bayleys across the Lower South Island will be stepping up their endeavours to find buyers for our clients – using not only well-honed databases, but also drawing on the brand’s national exposure to buyers from across the country looking to move south and secure their next home.

No other real estate agency brand in New Zealand has the breadth and scale of Bayleys when it comes to presence and marketing. As always, if any of the wonderful listings featured in this edition of View magazine pique your interest, feel free to contact the Bayleys salesperson marketing the property for a chat. We look forward to helping you achieve your real estate dreams and ambitions.