Property boom tests Dunedin’s heritage buildings

Dunedin’s property market outperforms expectations with numbers catching people off-guard. Fresh data puts the city’s home values up 3.3% over the last year, driven in part by a recovering student population.

Christchurch, long seen as the affordable alternative to Auckland and Wellington, has now been overtaken, with its median sale price edging above Dunedin’s for the first time in years. Bayleys Dunedin managing director Chris Maclean says buyers in the city are still finding solid entry-level properties in the high $400,000s, even as interest in the market builds. It’s a shift few saw coming for a city that spent much of the past decade flying under the radar.

That renewed demand is landing on a housing stock unlike almost anywhere else in the country. Dunedin holds onto one of the most intact collections of Victorian and Edwardian architecture in the southern hemisphere, a legacy of the gold rush wealth that made it New Zealand’s richest city through the 1860s and 1870s.

While other main centres tore down much of their own heritage through the twentieth century, Dunedin kept hold of its Gothic Revival and Italianate facades almost by accident, its economic centre of gravity having shifted north before the bulldozers arrived. Nearly 800 buildings in the city now carry heritage listing, many of them clustered in the old warehouse precinct south of the Octagon.

Holding onto that heritage has never been simple, and it is about to get harder. Dunedin’s earthquake risk classification has recently shifted from low to moderate under updated building law, adding a fresh layer of strengthening requirements and cost for owners of older buildings.

Mayor Sophie Barker, who grew up in Larnach Castle and has made heritage preservation a personal priority since taking office, says the risk is that owners simply decide restoration is too expensive and let buildings slide into disrepair instead. Southern Heritage Trust founder Ann Barsby has already coined a term for what results, calling the empty sections left behind heritage carparks, and is pushing for tighter rules to prevent what she describes as demolition by neglect.

Property investor Lawrie Forbes has spent years working against that trend, buying up and reworking heritage buildings across the city into apartments, offices and cafes since his first purchase, a former boilermaker’s workshop he bought with his mother’s house as surety. His experience points to what it actually takes to keep a heritage building standing and useful, stripping back, strengthening and refitting structures that were never built to modern seismic or insulation standards, without losing the character that makes them worth saving in the first place.

Put those two forces together, a property market heating up faster than anyone expected and a heritage building stock facing new compliance costs, and the pressure on the region’s building and construction sector becomes clear. More buyers mean more renovation and upgrade work moving through the pipeline, much of it on properties that demand a level of skill general renovation work elsewhere in the country rarely calls for.

Getting that work wrong on a listed building carries real financial and heritage consequences. Getting it right requires builders, engineers and trades who understand both the technical demands of seismic strengthening and the judgment needed to protect what makes these buildings worth restoring at all.

Barker’s own worry is that regulation designed to protect heritage could end up working against it, discouraging councils from listing buildings in the first place rather than helping owners meet the cost of caring for them. Whatever direction the rules eventually take, the buildings themselves aren’t getting any younger, and the city’s growing appeal isn’t slowing down to wait.

Dunedin built its reputation on knowing how to hold onto things worth keeping. Whether that holds through this next wave of growth will come down to the people doing the actual work, brick by brick, facade by facade, across a city that has always measured progress a little differently to the rest of the country.