Dunedin is New Zealand’s seventh largest city and is supported by one of the country’s largest universities with over 20,000 students. The investment the university continues to make in its academic resources and infrastructure retains its position as an internationally recognised leading academic institution and consistently attracts students nationally and globally.
The central student investment area in Dunedin lies just north of the Central Business District and is unique in that the University of Otago, Dunedin Teachers College and Otago Polytechnic are all situated within the same vicinity. The immediate surrounding residential area is almost exclusively used for student housing allowing the students to reside in close proximity to the tertiary institutions and each other. The convenience and the social aspects that evolve provide a unique lifestyle that appeals to students in addition to the high quality education the establishments offer.
Student Investment Area Map
The area is also unique in that the central campus zone, where the greatest demand for flats exists, is bordered by steep reserve hills on two sides and the CBD to the south, effectively locking the area for further expansive development. This causes a limited supply of central flats while demand has historically always increased. The overflow is pushed up into the North East Valley suburb and fringe areas to the west of the central campus area, expanding the student accommodation area into pockets. Accommodation developments are also becoming popular in the CBD as students are attracted to the convenience of being within walking distance to the campus while residing amongst the shops and café scene.
Students have a range of choices for accommodation, ranging from Hall’s of Residence for first year students to flats and studio apartments owned predominantly by private investors. Flats range from early 1900’s villas to modern purpose built or redeveloped student houses. Studio apartments tend to be most popular with international students happy to pay a premium for the complete accommodation package finished with furnishings and utilities provided as part of the lease.
Rental income is predominately for the full calendar year with leases being signed as early as July the previous year by students wanting to secure their favourite flats.
This University Investment sector has long been regarded as a stable accommodation investment with rents continuing to increase most years due to the supply and demand nature of the area. It has proven to be a reliable, consistent, and safe vehicle to achieve excellent cashflows and capital growth.