Hi All,
Looking for forum memembers thoughts on investing here particulaly with a view to providing student accomodation at the northern end of town.What sort of yeilds are the norm ? What are the prospects for capital growth? Are student numbers
expected to increase or decline in the future?What has happened with property in general in Dunedin and has student accomodation outperformed this?I attended the Otago Uni in the early 1970’s when
us baby boomers put extreme pressure on student accomodation because of the large numbers of us.
The one thing that I remember from this period was doing back of envelope sums of how much one
particular landlord was making from the several
old dongas he owned.From memory $14,000 was the going rate for something less desirable in Dundas Street and I think it was over $200 per week rent.This guy or his descendants probably own half of Dunedin by now if they kept to their system.
I realize that much has changed in the intervening 30 odd years but is it worth investigating Dunedin.Are there bus loads of Aussies queing up at real estate agents doors?
Westan I know you have moved on to other things but as this is close to your stomping ground your comments would be appreaciated.
Cheers and thanks in advance
Hound Dog [biggrin]Hi Well Dunedin has changed since you were here last
you pick up a dive in Dundas st now for $200,000- $250,000 & you might if your lucky get $300pw for it
but there are plenty of empty student flats here at the moment & rent deductions going on, Infact in this mornings paper it was mentioned that there are 43 knowen student flats sitting empty as you read this
With this “property boom” gone are the days of cashflow positive propertys in good old Dunedin, we have several here (not student rentals, I keeped well away from that side ) & they are all highly cash flow positive ie brought in the last 8 years or so when it was the norm to buy a normal well maintained family home for 75K to 85K & let it for $160- $180 pw, now we have paid a 50% of their purchase prices off (ie we owe half as much yet today lay are easy to let for $225 – $250pwwhat has also happend here is that the quality of rental propertys has gone up alot, even 8 years ago here, if you had a cheap dump, you could easy let it for good money, those days are long gone & the students can now be very picky ( which is a good thing, as we brought what I call “normal” family homes, not the classical “renters” which are now hard to sell (to local investors) very hard to let
I think Dunedin is a great place to have invested a few years back, I’m now waitng for the bust in the market, so I can get back into it, we have had alot of aussie investers buying up here & there have been some huge gains because of it, I hope they dont get burnt too much, as in many cases I know, I have seen real big (for Dunedin) prices paid by Aussies (some people here were buying for $80,000 – $90,000 & within a few weeks had onsold to Aussies (who thought these were cheap) for $120,000 $140,000, sure these have gone up even further now, (mainly because of out side investers) while all the local investers are just sitting, waiting & the time will come, when some of these huge gains have a “correction”I hope this is of help
Ripsnorter
i’d be careful buying into Dunedin at todays prices. But i’m not thinking about selling, i’ve got properties in St Kilda and Mornington. I’ve heard the locals say prices are going to drop for years, sometimes “locals” don’t see the big picture. I remember in July 2003 a “local” in Timaru tried to warn me that now was the top of the market and not the time to Buy. I had another view. Since then prices have doubled. I still see Dunedin as Cheap by “Large” city NZ standards. Look at prices of Christchurch, wellington, Hamilton auckland etc. Sure prices have risen 100% in the past 3 years but after years of no or little growth. A lot of the gains are catch up refecting these time of on appreciation.
as far as the Uni goes, Student Numbers are strong and expected to remain so. Otago will remain one of NZ’s premier Uni’s for many years ahead. I’m not up with vacancy rates for student accomodation as i’m not in that market. A while ago word was landlords had raised their prices too high and were forced to reduce them to get tenants.
With good growth in the Industry base of Otago and Southland i see Dunedin remaining a good area to hold property. The Port has expanded as has Fisher Paykel (export whitegoods). Economically Dunedin looks good.regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
Hi Westan,
Like you I have no intension to sell & like you my propertys are in Mornington & St kilda
we must think alike
I understand you have some in Invercargill too??
snap, same here
hi ripsnorter and eveyone
wow thats a funny coincidence, as well as the 2 in Dunedin (mines 18 Scott st St Kilda do you have one in Scott st ?) and yes i’ve got 2 in Invercargill, 2 in Balclutha, 1 in waimate, 1 in wairoa, 2 in marton. Hec i’ve only got 10 left in NZ, i thought i had 12 ! i’ve sold about 12 over the past 6 months, oh 1 in Gore. but i’m getting more in the States.
I’ll sell a few more this tax year but keep properties in Dunedin and Invercargill.regards westan
We find cash positive deals showing 15-25% Returns in the USA email me at [email protected] to join our database
Originally posted by Hound Dog:
From memory $14,000 was the going rate for something less desirable in Dundas Street and I think it was over $200 per week rent.This sounds like the house I lived in. Inadequate heating, outside toilet and laundry, easy staggering distance to the Gardens Tavern. It was still there 2 years ago and has had little or no maintenance since the 80’s
Cheers
JeffHi All
This is my first ever post. In January this year we travelled around the South Island looking for potential investment areas after doing as much research as possible from home (NSW). Dunedin was one of the areas we looked at. We made good contacts with a couple of agents who have kept us updated with student rental properties for sale, but have not yet managed to find anything offering a reasonable return. We have since looked further south to smaller towns and are looking at 3-4 bedroom family homes. We are now in the process of buying our first property – a 3 bedroom house with sitting long term good tenant and a return of 12%. A small step to be sure, but at least we’ve taken it. We are still keeping an eye on Dunedin in case a bargain pops up and yes, there were quite a few Aussies looking in Dunedin at the same time as us. All the agents we met commented on it. I hated the feeling that they might be rubbing their hands together when they saw us coming, one of the reasons we looked further afield. Having said that, all the agents we spoke to, plus the very helpful bank manager we established a relationship with, believe the student market is there for the long term but said they are looking for better quality accommodation than has been the norm.
Don’t know if any of this helps anyone but it’s a good feeling to finally be contributing after being struck by ‘forum fear’ and not responding to anyone for fear of looking dumb.
Cheers
jelHi All,
Thanks for your responses and bringing me up to speed with the situation.On a flying visit last year I had a look around and checked out the old stomping grounds.I found my Grandparents old house
at the northern end of Queen St.It had like a block of flats/units built on the lower end of the section (block).I also remember at one flat the outside loo cracking from the pressure of the ice formed in the bowl during a particularly cold night.This was in Dundas St down near the Leith.Naturally we were blamed for this and had to replace the broken loo.
Having my Mother in Gore makes me look seriously at the property investment oportunities in New Zealand but I would be most reluctant to consider some of the regional Towns and prefer the large Cities.I have always liked Dunedin as a place and from the advice given here will watch and wait.Thanks for your thoughts and responses.
Hound Dog [biggrin]I also remember at one flat the outside loo cracking from the pressure of the ice formed in the bowl during a particularly cold night.This was in Dundas St down near the Leith.120 Dundas by any chance?
Jeff
Hi Hound Dog,
Welcome to the forum!
I thought you were me! (But I didn’t remember adding this post). I did pop over to NZ last year, and was checking out properties in Dunedin, while I was on a conference (a veterinary conference, not a real estate conference).I was more interested in Oamaru, prices seemed to be on the rise, but not too high yet, and it seemed like a nice seaside town… Still I chose not to buy re: current interest rates, and easier deals closer to home (in Oz).
I agree Dunedin is geographically a good place to rent with the Uni’s etc, it just so cold!!! A good place to watch, but difficult to find “easy” CF+ deals at the moment.
From The (other) Hound. [baaa]
Hi All,
Jeff I cannot remember the no (too much alcohol and substance intake at the time) but it was first on the right hand side after the bridge heading east.It may have been on the corner of Leith St central.A few of the dark bricks(chocolate in colour?) that the Gardens Tavern was made of were an integral part of every room that I inhabited.Along with a few planks of timber they formed a shelving structure that Frank Llyod Wright would have been
proud of.They housed the books and the obligatory
stereo.Memories ….It was around this time that Tim Shadbolt was regarded by most as the biggest ratbag about.Most would probably now know him as the saviour of Invercargill.How things change.
jel08 good to have you respond.Be very diligent with some of the smaller centers.Employment and flooding are two things that spring to mind and some local knowledge could be very valuble.Not much point in having cashflow +ve if it goes underwater every 5 years.I would be interested to know where you have invested.
Hi to the other hound.Oamaru also hold fond memories for me.(Boarding School)
Thanks again all for your interest and responses.
Cheers
Hound Dog [biggrin]Hello,
I think as long as your rental’s are treated acordding to their standard mouldly cold damp homes are just looking for troublesome students however you look after your property and fix what needs to be fixed with little fuss then you will find good people to care as you do for your investment. I think most students down here rent properties on a 1 year term.
If in doubt ask Logan Bagrie at http://www.bevstewart.co.nz , he knows more than me…..LOTS MORE [biggrin]
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