Auckland: NZ's most leave-able city?

Wednesday, 4 July 2018

Rebecca Black and her husband moved from Auckland to Whanganui just over two years ago.

His family lived there already and he heard about a suitable job managing an electrical wholesaler.

The salary was about the same as he earned in Auckland. Black was nine months' pregnant at the time, with their third child.

'We'd been looking to buy in Auckland for about four years but the market was getting more and more impossible,' she said.

'And we knew we would be able to afford a great house in a good suburb here, so we decided to make the move.'

Others are doing the same. In the year to June last year, about 14,000 more people left Auckland for other parts of New Zealand than moved in.

It was reported this week that Auckland's economic development agency, ATEED, is to focus on creating quality jobs, dumping its previous goal of 'the world's most liveable city'.

HOUSE PRICES

One of the biggest drivers in recent years has been a search for more affordable housing.

Mortgage adviser Bruce Patten said he often encountered people who wanted to move out of Auckland when they had children and needed more space.

Auckland and Queenstown have the highest house prices in the country.

Real Estate Institute data for May put the median house price at $852,000 in Auckland - or $240,000 in Southland, $442,000 in Canterbury, $305,000 in Manawatū/Whanganui and $475,000 in Northland.

Black said their four-bedroom home cost them just under $500,000.

'The equivalent in Auckland would've cost over $1 million and I would've had to be in full-time work if we had bought in Auckland. We were living in Blockhouse Bay when we left and a two-bedroom house in our street sold for $1.3m just before we left.'

The lower house prices are especially helpful to first-home buyers who need to save a deposit.

Data from the Real Estate Institute estimated a borrower would need more than $134,000 saved to buy an entry-level Auckland house with a 20 per cent deposit. Compare that to $70,000 in Christchurch and jut over $80,000 in Wellington.

Someone saving $200 per fortnight per couple, plus 3 per cent of their incomes in KiwiSaver, could expect to save $70,000 within a decade.

But existing homeowners come out better off, too. Homes.co.nz data shows the average Auckland homeowner has enough equity to buy a house outright in many parts of the country,including Upper Hutt, Whangarei, Whakatāne, Taupō and New Plymouth.

Rent is cheaper outside Auckland, too. Trade Me says the median asking price for Auckland properties is $550 a week compared to $480 a week in Wellington and $400 in Christchurch.

Auckland rental properties tend to turn over more quickly, with shorter tenancies.

RATES

People who leave Auckland sometimes get a rates bill shock. While Auckland has more infrastructure to pay for, it has a larger ratings base to levy that money from.

Ratepayers in other parts of the country often pay roughly the same and receive less.

Recent analysis showed Auckland council rates were about 0.22 per cent of the average house price - compared to more than 1.2 per cent in the Whanganui District and 1.5 per cent in Waitomo and Wairoa.

Black said she felt she took a bit of a hit with rates. 'We pay rates to Whanganui District Council and Horizons Regional Council. We also miss basic services like rubbish and recycling collection.'

SCHOOLS

You can expect to pay less of a house price premium to get into the top school zones in other parts of the country. While house prices in the Epsom Girls Grammar zone are estimated to have a 90 per cent premium added by the school, Tauranga's Papamoa College only adds 9 per cent and Christchurch Boys 35.85 per cent.

CAREER AND INCOME

Black said the move had dented her career progression. She was working as a journalist in Auckland before the move and was now considering retraining. 'I'm having to look at different options.'

Auckland incomes are high compared to many parts of the country, with a median wage of $1381 a week. But it's not the highest in the country - that's Wellington, with $1540.

There's also more pressure on that income. Auckland's North Shore has house prices about 10 times the median household income. In Whanganui, house prices are not even three times household incomes. Buyers there have a smaller mortgage and could expect to be debt-free faster.

Stats NZ shows, taking all costs and situation into account, that Auckland households have a ratio of housing costs to income of 16.8 per cent compared to 15.4 per cent in the rest of the North Island, excluding Wellington, and 12.6 in the South Island, excluding Canterbury.

Some people who leave Auckland are filling the jobs gap by taking their jobs with them.

Trade Me head of jobs Jeremy Wade said 2 per cent of job listings on the site said they were 'flexible' but most employers had some sort of flexible option. A Trade Me survey of employers showed 17 per cent offered the ability to work from home. 'We reckon the number of employers offering flexible work programmes and the variety of options within those programmes will continue to grow as flexible working becomes a key consideration for Kiwi job hunters.'

Massey University Professor Tim Bentley said he would expect people to try to stay with their Auckland employer and negotiate a flexible arrangement, including returning to the central office when needed.

'Workplace is no longer a place of containment. It's an activity and for most knowledge workers can occur anytime and anywhere. Regional work hubs and co-working centres will also become more popular as people choose to work closer to where they live. '

He said this was already happening in the public sector and in smaller businesses.

'This form of active working will become the norm in the near future. The main thing to protect careers and wellbeing is to provide good organisational support for remote workers and have leaders who trust their staff. Our research on teleworkers has shown this.'

Economist Gareth Kiernan, of Infometrics, said there were many careers where the pay was virtually the same, such as for teachers and police officers. 'If you've got those transferable skills and can get paid more or less the same, it's a bit of a no-brainer. In other cases you might take a bit of a pay cut, but it wouldn't be the same magnitude as how much you cost of living would drop.'

COMMUTING

Moving should save you on vehicle-related costs and driving time. 

Data from Statistics NZ shows Aucklanders spent about 450 hours a year in a car, either as a driver or passenger. In Northland, it was less than 40. In Waikato, people were clocking up just over 120, in Wellington 140 and Christchurch 150. Bay of Plenty came in at 75 hours. 

LIFESTYLE

Black said there was a better lifestyle for kids in Whanganui. 

'Being closer to family has been a massive bonus, especially for the kids who see their cousins and grandparents much more often. We're also a lot closer to my parents and brothers, so we've seen more of them too ann the kids get to spend lots of time on my parents' farm.'

But she said the family missed some other things, like being able to go to the museum, Motat or shopping centres, 'and endless parks and playgrounds'.

ONE-WAY BET?

Black doesn't expect her family will ever move back to Auckland.

For most who shift out, moving back won't be easy.

While the regions outpace Auckland house price growth from time to time, the gap between what you pay for a house in Auckland and outside it has got bigger over recent years.

In 10 years' time, if you were to sell a Whanganui house, it might not be worth the same proportion of an Auckland house as it is today.

But if you're able to get out of debt more quickly and make investments in other things, you may think that's a risk worth taking.