First Home Buyer's Guide to South Dunedin
If you're a first home buyer looking at Dunedin homes, chances are that South Dunedin has come up in your search. It's consistently one of the most affordable suburbs in the city, which makes it a great starting point for buyers who want to get on the property ladder sooner.
Here's what you actually need to know if you're considering buying a home here.
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Why first home buyers look at South Dunedin
South Dunedin sits close to the city centre, the hospital, and the beach at St Kilda and St Clair, but property prices are typically lower than suburbs like Roslyn, Maori Hill or Central City. For buyers who want to stay close to town without the price tag that comes with it, that combination is hard to beat.
It's also an area with a blend of first home buyers, renters and investors, so there's good rental demand if buying to rent is part of your long term plan.
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What does it cost to buy in South Dunedin right now?
Property prices move, so it’s a good idea to get a current appraisal for the specific type of property you're after (villa, unit, townhouse, new build, etc). You can also take a look at South Dunedin properties on Trade Me or realestate.co.nz. As a general rule though, South Dunedin remains one of the more accessible entry points into the Dunedin market compared to the city's more sought after suburbs.
For example, at the time of writing, the average Dunedin house price was $651,616 whereas the average South Dunedin house price was $423,850 - significantly lower and therefore a great option for first home buyers.
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How much deposit do you actually need?
- Most banks want to see a 20% deposit for an existing home
- Some lenders will consider 10%, depending on your situation and their current lending criteria. This is where using a mortgage adviser really pays off, because not every bank has the same offers at the same time
- The Kainga Ora First Home Loan can offer lending from as low as 5%, given you meet the criteria and can afford the loan repayments
- Properties that qualify as new builds are often exempt from the usual deposit and lending restrictions, which can make them a realistic option with a smaller deposit.
If you're not sure where you sit, then it's worth a quick conversation with us before you start looking seriously.
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Can you use your KiwiSaver?
Yes, if you meet the eligibility criteria, then you can withdraw most of your KiwiSaver balance to put towards your deposit. Two of the key eligibility criteria are that you have been contributing to KiwiSaver for three years and that you are buying your first home (or in a similar position to a first home buyer)
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What type of properties will you find?
South Dunedin has a mix of:
- Older character villas and bungalows, often needing some updating
- Standalone family homes on flat sections
- Units and townhouses, popular with first buyers wanting lower maintenance
- A growing number of newer builds
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Things to factor in before you buy
- Flood risk and insurance: parts of South Dunedin have known flood risk. It's worth checking insurance costs and any council information for a specific property before you commit, this can affect both insurability and lending. Another good thing to check is the councils draft flood plans, as some houses will be affected eventually as part of this plan
- Age and condition of the home: many properties are older villas, so budget for a building report and factor potential maintenance into your numbers.
- Total cost, not just purchase price: rates, insurance, and any renovation costs all affect what you can realistically afford.
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Getting started
Buying your first home is a big step and South Dunedin can be a smart place to do it. The right approach depends on your deposit, your income, and what you're looking for in a property. A good first step is getting pre approved so you know exactly what you can work with before you start making offers.
Ready to talk through your options? Get in touch with the team at Loan Market Dunedin, we'll walk you through what you can borrow, what deposit you'll need, and which lenders are the right fit for your situation.
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FAQs
Is South Dunedin a good place for first home buyers? Yes. It's one of the more affordable areas close to Dunedin's city centre, with a mix of housing types and flat sections, making it a popular starting point for buyers on their first home.
How much deposit do I need to buy in South Dunedin? Most banks ask for a 20% deposit, though some lenders will consider 10% or even 5% depending on your circumstances. New builds may qualify for different lending rules with a lower deposit required.
Can I use my KiwiSaver to buy a first home in South Dunedin? If you meet the eligibility criteria, yes, you can generally withdraw most of your KiwiSaver balance to help with your deposit.
Does South Dunedin flood? Some parts of South Dunedin do carry flood risk. It's worth checking this for any specific property you're considering, as it can affect insurance and lending, and there may be changes to some areas of South Dunedin when the council's proposed flood plan comes in in a few years time
Who can help me buy my first home in Dunedin? A local mortgage adviser can help you understand your deposit options, compare lenders, and get pre approved. Here at Loan Market Dunedin, we offer this advice at no cost to you.
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