Growth, trends and opportunities

As has always been the case, activity in the residential property markets is largely influenced by economic activity. Jobs generate income, which in turn enables people to buy homes. More jobs, or higher paying occupation opportunities, allow employees to both enter the residential property market, or move their way up the housing ladder as their income and equity grows.

In this respect, employment levels in many parts of the Lower South Island have been, and continue to be, better than the rest of the country – consequently underpinning our local residential property market. That’s before we even begin looking at the employment growth opportunities looming for the area off the back of new businesses.

For example, a report prepared by economic data analysis consultancy Infometrics for the Central Otago District Council, highlights that the region’s gross domestic product (GDP) rate of 1.8 percent outperformed the greater New Zealand economy in 2024, which clocked in at 1.4 percent.

Similarly, employment growth into 2024 within the Central Otago District at 2.4 percent, outperformed the New Zealand growth rate of 2.2 percent – with retailing, and IT/communications being the two top employment creating industries.

Meanwhile, a newly released long-term plan prepared for the Southland Regional Development Agency paints a positive picture for the wider Southland area as a whole – based on continuing population growth, and increasing broader economic activity, in what is New Zealand’s second largest region by landmass, sustaining a population of approximately 102,400 people.

The document, entitled Beyond 2025 Southland, acknowledges that the region’s economy is underpinned by some 14,000 small to medium-sized businesses, along with the rural sector – both of which have traded reasonably well since the Covid era. Aquaculture and tourism are identified as the biggest business growth activities for the region.

Buyers waiting on the sidelines

Here is how is the real estate market reacting to this ongoing positivity across the Lower South Island? In his February Property Report, respected independent economist Tony Alexander notes that first home buyers remain active in the market, with investors continuing to remain “on the sidelines.”

Tony Alexander’s survey also points out that: “Buyers feel they do not need to be in a hurry to make a purchase. We are solidly in a buyers’ market.” This brings the invaluable negotiating skills of an experienced real estate agent to the fore to get deals concluded successfully.

The latest real estate sales data for 2025 encompassing the Dunedin, Otago, Southland, Invercargill, Queenstown Lakes, and Central Otago districts is showing us some interesting patterns. For this, we draw on the first 2025 batch of independent market-wide figures compiled by the Real Estate Institute of New Zealand.

The latest in-depth Otago regional sales data from the Real Estate Institute of New Zealand identifies that residential property median prices across the region are up in all five sub-districts over the 12-month period to the end of January – including achieving record median sales values in the Queenstown-Lakes District.

Drilling down further into the REINZ statistics showcases the year-on-year residential property median value increases within Otago’s sub-districts, which are: • Central Otago District – up 15.1 percent from $712,500 to $820,000 • Clutha District – up 2.6 percent from $380,000 to $390,000 • Dunedin City – up 5.7 percent from $575,000 to $608,000 • Queenstown Lakes District – up 10.6 percent from $1,370,000 to $1,515,000 and • Waitaki District – up 1.1 percent from $445,000 to $450,000

The REINZ data concurrently tracked that in the greater Otago region as a whole, the current median number of days to sell a residential property now sits at 49 days – with vendors’ patience obviously being rewarded though with higher prices.

Real Estate Institute of New Zealand chief executive Jen Baird commented that attendances at open home viewings in the region were high, and auctions were being well attended by potential buyers.

Meanwhile down in Southland, the REINZ statistics highlight similar signs of positivity for median property values over the 12-month period to the end of January 2025, encompassing – with three of the four geographic zones showing price rises.

Median residential prices for the Southland region as a whole rose 7.2 percent from $452,500 to $485,000, while for the sub-districts, the year-on-year data for the 12-months to January showcased some hug leaps, featuring: • Southland District median prices up 23.2 percent from $475,000 to $585,000 and • Gore District median prices up 32.1 percent from $333,000 to $440,000

Talk to the experts

Bayleys real estate salespeople are always happy to share their knowledge and insight with both potential buyers and vendors, so that all parties are fully briefed with the information needed to make the right and best decision for them.

Feel free to contact your local Bayleys salesperson for a chat on how we can assist in achieving your real estate dreams. We look forward to talking with you.