First home buyers in Auckland will be financially disadvantaged throughout their lives compared to those in other regions

First home buyers in Auckland will be financially disadvantaged throughout their lives compared to those in other regions

By Greg Ninness's latest Home Loan Affordability Report shows that young couples in Auckland hoping to buy their first home will have to pay twice as much in mortgage payments as similar couples virtually anywhere else in the country.

It also shows that Auckland's sky high prices are creating a debt burden that will likely leave young Aucklanders economically disadvantaged for the rest of their lives compared to young people in other parts of the country.

The table below shows what the REINZ's lower quartile selling price of homes in all regions of the country was in June, estimates how much a young couple earning the median wage for their age might be able to save towards a deposit, and how big the mortgage would need to be to buy a home at the lower quartile price.

It also shows how much of their income they would need to set aside each week for the mortgage payments on their home.

It shows that in Auckland, the lower quartile selling price of homes sold in June was $671,500.

The median take home pay for an Auckland couple aged 25-29 who are both working full time is $1587.88 a week after tax. estimates that if they had been able to save 20% of the net pay for four years (and earned interest on their savings at the prevailing 90 day deposit rate) they would have saved $72,458 to put towards a deposit.

That means they would need to take out a mortgage of $599,042 to buy a home at June's lower quartile price, equivalent to seven times their annual income.

That is an eyewatering amount of debt for a young couple earning average wages to take on. They would need to set aside $692.78 a week to make the mortgage payments, which would be nearly 44% of their take home pay, and that is before adding other property-related expenses such as rates, insurance and maintenance.

Easier elsewhere

So how would that compare with similar young couples in other parts of the country?

Just south of the Bombay Hills in Waikato/Bay of Plenty, the lower quartile price in June was $335,900.

The median take home pay of a couple aged 25-29 is slightly lower than it is in Auckland, at $1482.75 a week.

But their mortgage payments on a lower quartile priced home would be just $310.80 a week, which is less than half as much as the Auckland couple would be paying and that would take up just 21% of their take home pay.

It's a similar story in the other major centres, with mortgage payments on a lower quartile-priced home taking up just 21% of a typical first home buying couple's take home pay in Wellington, Canterbury and Nelson/Marlborough.

It's a bit higher in Central Otago/Lakes at 33% because of the very high prices in Queenstown, but in all other regions, a typical young couple could expect to be paying out less than 20% of their take home pay to make the mortgage payments on a lower quartile-priced home.

The implications of this go well beyond the fact that it it is a lot easier for young couples outside Auckland to get into their own home than it is for those in Auckland.

Those outside of Auckland are also likely to have more financial choices open to them.

They could choose to increase the amount of their mortgage payments and pay it off sooner and still be within affordable limits.

If they did that, they would be able to start seriously saving for their retirement sooner, putting them on a better footing later in life.

Or they could keep the mortgage payments low and spend some money improving their home, which might also lift its capital value, or start building a nest egg which they could invest into other assets and diversify their holdings.

And yes, if they wanted to blow it on a flash car or a big overseas trip they could do that too.

But the point is that young people on ordinary wages outside of Auckland should be able to buy their home without excessive difficulty and still have those choices.

When it comes to financial matters, choices are good and the more options you have to choose how you manage your money, the better.

Wide ranging implications in Auckland

But young couples on average wages in Auckland won't have as many choices because so much of their income will go towards paying off their mortgage, assuming they can afford to buy their own home at all.

But it won't just be them that will be affected.

Because they'll have less disposable income, they'll have less money to spend on the good and services that their counterparts in other regions are purchasing.

And that means less money circulating in the Auckland economy, which is bad for all types of business, from retailers to manufacturers.

And it's also bad for jobs.

But there will be one group that will be creaming it more than most - the banks.

The surge in Auckland house prices and its flow on effects into the regions has been mana from heaven for them.

Banks are in the business of selling debt to people and they have been doling it out with gusto, pushing total household debt to unprecedented levels, making record profits for themselves in the process.

Property developers and real estate agents won't be doing too badly either.

The city of broken dreams?

Auckland is a city that likes to promote itself as one of the most liveable in the world, and perhaps for the bankers and property developers it is.

But for young people on average wages looking to own a home and eventually start savings towards their retirement, it could increasingly be becoming the city of broken dreams.

To read the full suite of Home Loan Affordability Reports for all regions, which include analysis of how affordable it is for people to move on to the second rung of the property ladder, click on this link. 

Comparing Regional Housing Affordability for First Home Buyers 
  REINZ Lower quartile house price - June 2016  Deposit    saved             

Amount   borrowed             

Weekly mortgage payments   Weekly      income              Mortgage payments as % of income
Northland $281,400 $56,280 $225,120 $260.35 $1473.95 17.7%
Auckland $671,500 $72,458 $599,042 $692.78 $1587.88 43.6%
Waikato/BoP $335,900 $67,152 $268,748 $310.80 $1482.75 21.0%
Hawkes Bay $237,700 $47,540 $190,160 $219.91 $1416.32 15.5%
Manawatu/Whanganui $186,200 $37,240 $148,960 $172.27 $1499.44 11.5%
Taranaki $255,100 $51,020 $204,080 $236.01 $1499.44 15.7%
Wellington $363,600 $72,720 $290,880 $336.39 $1622.39 20.7%
Nelson/Marlborough $333,500 $66,700 $266,800 $308.55 $1477.86 20.9%
Canterbury/Westland $359,600 $71,683 $287,917 $332.97 $1593.70 20.9%
Central Otago/Lakes $493,000 $66,737 $426,263 $492.96 $1475.83 33.4%
Otago $240,200 $48,040 $192,160 $222.23 $1475.83 15.1%
Southland $146,600 $29,320 $117,280 $135.63 $1501.75 9.0%
All NZ $321,000 $64,200 $256,800 $296.98 $1560.22 19.0%


We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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43% increase in Tauranga in one year.
That's ridiculous!

You can sort of see how it would happen with the change in interest rates and the realization that houses were good value in Tauranga and desirable for investors. A year or so ago the interest was $315 a week on a lower quartile house and now it is about $363 a week - not a huge difference and possibly matching rent increases in the area.

Problem is Zachary that places like Tauranga just don't have enough business and therefore wage infrastructure to support such massive house prices increases, which in turn causes rents to increase too.

We all realise that the provinces property prices have been pushed up by local Kiwi investors (Mainly from Auckland) they have been pushed out by Non-resident Investors who have focused on buying in Auckland.

With the recent local banking restrictions on investors I would expect to see a price drop in the provinces.
However I doubt you'll see much of a cooling off in Queenstown, as their price increase is probably due to wealthy Aucklanders taking early retirement by downsizing to free up equity for their children.

good luck trying to find a house in queenstown for that price. you will find that the average is lowered by the apartment sales down there

No different to Whistler or Vail. I prefer the snow in Whistler to QT, even if I don't want to live permanently in either place.

And the apartments are usually visitor accommodation or in the management pool and you're not allowed to live in them...

That 43% represents NZ buyers being displaced from Auckland by the Chinese. Tauranga and Hamilton are withing driving distance of Auckland. Now the RBNZ has stomped their foot down with LVRs we'll see what happens.

Evidence please.....

Based on my own personal experience and that of my circle of friends. Also based on conversations with prospective tenants in Auckland, a surprising number of whom now own properties in Tauranga and Hamilton, and finally based on conversations with real estate agents in Tauranga! Aucklanders are having a massive effect on the prices in Tauranga, and I presume Hamilton is the same.

Yes people who live and work in Hamilton and Tauranga are being squeezed out by this sort of thing. Same effect, just pushed further down the line. Something drastic really has to be done, NZ is changing rapidly and from what I can see, not for the better.

I think Tauranga has turned into a two tier market. Super cashed up Baby boomers paying nosebleed prices for first class real estate vs locals and gen x&y Aucklanders squabbling over the scraps, and the RBNZ providing some distortion with LVRs. I was recently looking at a two bedroom attached unit in Matua which went for $935K. - $935,000 for an attached two bedroom unit in Tauranga, and now its being advertised for rent at $440 per week! think about that!

What you've actually got now is an army of Auckland rentvesters (like me) collectively consuming tens of thousands of liters of fossil fuel to do DIY property management. Rented houses both in Auckland and Tauranga end up being run down and dilapidated, and rentvesters who aren't really consuming as much as they would if they were owner occupiers. Its all horrifically unproductive.


I thought Unitary Plan would solve the problem and will make house more affordable to FHB as the only problem in Auckland is supply and not demand.

Will the government still be in denial.

Please also mention that it would be hard for Kiwi FHB and not Asian FHB.

What does Asian FHB mean? Would it be that immigrant from Asia that moved here and worked hard to buy a house or would that be the "investor" that isn't interested in houses that are in the territory of FHBs?


Non Resident Students who are buying in heaps with overseas funding

Let me help you a little more. The 39% includes students AND temporary workers. Do you guys not realise that temporary workers (i.e. skilled professionals) may actually earn quite a decent bit and look to purchase houses to stay? Do you know the breakdown of this 39%?

It means FIFTH home buyers

Except you wouldn't even know if they are foreign or local Asians just by looking at them.

the Unitary Plan does not yet exist so of course it hasn't any effect on house prices. If it does become operative next month it will make massive difference to cheaper end of market. Expensive inner city single house zone property will stay as it is currently, but there will be a huge opportunity to provide cheaper dwellings in more desirable areas that we currently can't.


Having lived in Auckland most of my life and now at the age of 70, I am disgusted that this Government has allowed this "housing crisis" to develop.
National has been in power about 8 years, enough time to put in measures to solve the problems. Instead, they have only done the very minimal required which is not enough.
New Zealanders are a very apathetic people to have allowed a Government to get away with not doing anything constructive to rectify the problem.
Surely the number one problem is excess immigration. John Key is adamant that we will continue to have virtually an open door immigration policy. This policy is, as everyone knows, is already damaging our lifestyle with clogged roads overcrowded hospitals and our huge housing problem. Why is this man so popular?
We have only ourselves to blame for the greed and vested interests of this Government.


The Nats do seem reluctant to do anything about anything -(itsme, how common are your comments amongst your generation)

I presume their skunk- works division must be planning something big to impress the voters. I just hope their plan to remove all non native pests by the year 2199 using technology "not yet invented" was not it.


The situation that we are in today is only because government was working with one agenda that is to support and protect Asia / Non Resident and to meet this interest the denial, lie and policy of inaction.

Government is creating unrest in the country and is a matter of time before you will see the result on the street. In todays time - with social media, internet need just one spark............

It is being said that one of the reason for housing Crisis is Immigrant but to Fulfill unitary plan needs appox 48000 skilled people that means 48000 families that is appox 200000 people so how will it help and also supply will be created after 2 or 3 years so till that time will the government let the housing crisis run amok, waiting and doing nothing.

The more I see the government inaction, more am convinced that National government is in NZ parliament to promote Asian Interest in NZ. Are they our representative elected by us or Asian Ambassador in NZ.

Sorry for repeating but am surprised how come the media and experts are not seeing the government ploy who are taking advantage of the fear of people of being termed racist - it is this fear that government is exploiting.

FTB's need to suck it up and buy a cheaper investment house first (like I did) and then rent where they want to live, oh, yeah, they can't do that now as are stuffed with a 40% down payment, what a fricking mess...and unintended consequences in play now...FHB's truly shut out once and for all...

LOL while 40,000-50,000 Kiwis moved to Australia annually over the last 15 years. So its ironic for you Kiwis to whinge about excess immigration.

How many of those "kiwis" were third world immigrants using NZ as a transit lounge?

Free trade agreements. That's why. You want to trade with China, India and the rest of the world? Then open your borders.

And try buying a house or 10 in China??

I don't understand this argument really. Can you afford to? Do you want to? Houses there are generally sold on 70 year leases. BUT don't let facts get in your way.

Any Government that intervenes by destroying equity will be severely punished at the polls, and rightly so.

But it most likely won't be the Government that destroys the equity - it will be something outside anyone's control....

Something like Trump or Putin

it will be the NPL in China and Europe way bigger then subprime....
dubble dubble toil and trouble

Auckland was not affordable to me in 1990 too. So I bought elsewhere.

I presume you were unemployed and did not need to look for a job.

One of my friends was a wharf clerk. He did not have money to buy a property in 90s as he was willing to settle down only in a few attractive inner suburbs. He did not like suburbs like Onehunga, Mount Wellington and Ellerslie as those were considered lower socio-economic ones. He moved to Tauranga to find good neigbours. He has been living in Tauranga for decades now. Most his old friends bought properties in Onehunga, Penrose and Mt Wellington areas at that time and now some of them own multiple properties in Auckland.

Swinging by to leave this here. The Spinoff Mag have had enough. They've surpassed their target to launch this project in a day, it's on.

...great to see. Aucklanders need to support this.

Very, very cool.


Auckland has a high probability of becoming completely dysfunctional.
At these prices even lower paid professional will never afford to live there. What is Auckland going to do for Teachers, Nurses, etc in future?
Companies that rely on a lot of low paid staff and can be relocated to a more affordable area, should be planning to do so now with some urgency. If they stay in Auckland their businesses will risk failure through either lack of staff or having to pay them very high wages that will make them uncompetitive.
Any business that could operate elsewhere should seriously consider relocating also.
Young Kiwis would be best advised to bite the bullet and get out now while property elsewhere in NZ is still affordable. I know that Auckland is a neat city with many attractions, but you are lucky to live in New Zealand because the rest of the country has a lot of great things also. Parents and grand parents encourage your kids to go, then follow them to re establish your family elsewhere. I see many families who are doing this successfully. Do you really want to spend the rest of your lives in an apartment in city that is crowded and congested like London or New York.
Other NZ towns and cities. This is a great opportunity. Forget looking after your property investor mates and release plenty of land to make it affordable and a point of difference with Auckland. Actively pursue Auckland based companies to relocate. Plan your cities well and well into the future so that you do not end up in the Auckland mess.

I don't think it is too much of a worry. A lot of people now live at home for much longer and families are much smaller. These people living at home will find getting a job in Auckland much easier and have more choices. Young people will also be able to find work easier in supermarkets and fast food outlets where they can work while they study for their University degrees at the same time as living with parents or in student accommodation.
We could see a return of spinster teachers and nurses renting rooms in large houses in the city. Hospitals already have nurses accommodation and this too could be expanded.
Also a lot of younger people will be inheriting houses in Auckland and become landed gentry.
On our journey to neo-feudalism we may pass through the stage of neo-Victorianism which may not be such a bad thing.


Zac, your future for Auckland is reminiscent of Dr Strangelove when he promotes the idea of the elite living down a mineshaft with a bevy of wives for 100 years after a nuclear disaster.
Recommended viewing

How I Learned to Stop Worrying and Love the Bubble.

Listen to yourself. It is a bubble.

You have watched it already.
Please admit you rewrote the final scene and you can see the black comedy in your Auckland scenario

That's simply a troll dripping in smugness.

So, anyone who doesn't follow the doomster, hand wringing narrative is a troll?


Visualizing a dystopian society for the "have nots" based on feudalistic ideals has more association with "doom". You're not a particularly intelligent or funny way.

I am being 100% serious. The future may well be dystopian and I am suggesting we individually plan for that possibility. The era of socialist experimentation was last century and was disastrous.
I don't believe feudalism necessarily equates with doom. That was just Victorian propaganda.

In Trump we trust!!

The most widely accepted definition of a troll is a provocateur – someone who says controversial, outrageous, extreme or abusive things to elicit a reaction. For them, the reaction itself is the win. The key distinction is between the attention-hustlers – the pure troll howlers who play this grotesque game for its own sake and their own – and the true believers.

What have I written that is truly provocative though? Modern families are smaller. Children stay at home longer. Auckland will be expensive for minimum wage workers to live resulting in more part time job opportunities for students. The few children will inherit the property of their parents. There are more single men and women.

Do you think the trend is more toward a dystopian future or a utopian future?

Because when it's dressed up in smugness, it stinks of troll, You're not actually discussing the issue in a constructive manner and resorting to inanity.

I'm very sorry you feel that way J.C.


I have followed your posts off and on for some time and have discerned a common thread through many of them; a distinct lack of empathy. Reading this one, the penny finally dropped. This lack of empathy stems from the fact that you are not actually a person, but a reasonably sophisticated computer program.
For example, a human being would understand that young people are living at home for longer not because they want to, but because they can't afford to live elsewhere. You see, most of them have to take out substantial loans for their tertiary education.
I was highly amused by the reference to spinster teachers and nurses-there must be a fault somewhere in the program..
The last sentence is a cracker. Since feudalism predates Victorianism, you, sorry I mean the program, clearly believes that we are rapidly going backwards as a society and will end up with a mass of peasantry, a few merchants, some squires, nobles and an absolute monarch. Will we also have the plague?
I think the program need some urgent reworking.

The AI is not working ? Sorry, just for fun. Please don't be offended.

Societies have been known to go backwards so the cold logic of a computer program would suggest that you should make the most of it. The logical choice is to be a noble.


Can I just add that, even if a young couple is able to save 20% of their income for four years after paying rent, then they will NEVER start a family, because the budget is already past breaking point on two incomes. They will pay off their crappy house in a crappy neighbourhood until they are almost retired. If they work diligently, they may see pay rises that ease their burden to a normal budget over time. So perhaps in their forties, since they don't have any children, they may be able to put some money aside for a trip to Rotorua every so often. However, by then it will be clear that the burden on the tax base of the excessive number of superannuitants means the government puts in place a plan to gradually remove NZ Super. The date of final removal of NZ Super coincides with the couple turning 65.
The couple then turn their attention to saving towards their retirement. Up until now, they haven't been able to afford Kiwisaver payments, because all of their money has been going towards paying off the mortgage.
So they cancel their next year's trip to Rotorua and keep working and saving.
What a life to look forward to.

What a time to be alive.


Legacy of JK

Bollocks this has nothing to do with John Key , its the same problem ( if not worse ) in Sydney and Vancouver , there is simply too much cheap money around and not enough property for sale

That's a really good point Boatman.

But why do we have to have this cheap money flowing into this country in such volumes? And who in this country has the power to stop it if not the leader of the nation?

In contrast to Australia, Canada, Taiwan and others, which discourage property purchasing by foreign investors, John Key has actually encouraged wealthy people to hoover up all of our existing housing stock under the wealthy migrant policy (2009). Investor 1 category requires minimum of 10 million to be invested over 3 years with the vast majority of those funds ending up in existing real estate.


Most definitely a legacy of JK.
He, and he alone is only the person who could stop this.

Correct - In Sydney and in Vanvouver after denial have finally introduced tax for mon resident buyer but our HON PM is still in denial.

More than the problem it is the denial and lie which is annoying.

Anything is better than lie and deceit - leo Tolstoy.

Why let evidence get in the way for a good bout of xenophobia?


Wrong. It has everything to do with that charlatan. It is HIS policies and HIS inaction and HIS denial that have in eight short years turned the place into a living nightmare for an entire generation of native kiwis.

Vancouver and Sydney have the same primary problem as Auckland. Chinese hot money. Unlike Sydney or Vancouver he has refused to even acknowledge the problem, let alone take measures to deal with it.

He has compounded that problem with his dogmatic neoliberal tax and immigration policies with scant thought for anybody but his pet boomer voting demographic. New Zealand does not have the infrastructure to deal with the people his government has FLOODED the country with. The per capita immigration rates are eye watering.

What does he do to deflect any questioning? Spout some folksy anecdotal garbage about how one of his mates needs a welder in Whakatane.

He has been reckless with the looming superannuation disaster, again just dumping the problems on the futures doorstep. Even the public debt under his government has been front loaded as an issue for my generation to deal with.

He now has the audacity to try to lock in the real estate bubble prices his government aided and abetted using recent FHB as human shields. It's disgusting. The world of pain coming for Auckland when interest rates rise is brushed under the carpet. Nothing to see here.

Arthur Grimes is 100% correct. What kind of voodoo economics is it to guarantee that year after year after year of double digit house price increases will be locked in by government policy of never allowing prices to fall? What kind of message does that send to every 2-bit speculator parasite out there? That housing is a 100% risk free, tax free investment product. Just leverage to the eyeballs and pile into real estate you cannot lose and the government has got your back. Too hell with productive investment, to hell with financial prudence, to hell with heaven forbid actually working for a living, to hell with the generation that comes next.

I wouldn't piss on the man if he were on fire. He has been a disaster for this country.


Yep I agree, In my humble opinion John Key is the worst prime minister in New Zealand's history. Even worse than David Lange in terms of damage to NZ society. Not that I totally disagree with the 1980s privatization - just the fire sale/ wealth transfer way it happened in NZ. The same massive wealth transfers are going on now. The Chinese aren't just buying houses, they're buying a government subsidized asset which contains the future earning potential of the kiwi professionals that have been turned into "tenants in their own country". Wealth Transfer!


xelnaga. you have perfectly summarized the leadership of our nation. As a wealthy older generation NZ'er, I apologize that it happened on my watch.
I understand the people getting wealthy selling out NZ, loving JK. But even the younger generations who are being screwed tend to love the guy.
And where is the media? At work and around extended family it seems like no one else can see whats happening. People love JK and Labor and greens don't sound like they will stop immigration or foreign buyers either.
Do we no longer live in a free democracy, is our media just an extension of government like in the states?

Bravo. I've never particularly given a damn about any political party either way, but this lot are entrenching an unprecedented level of systemic corruption, and that has to stop.

Well said.

@ Xelnaga - Great comment, couldn't agree more (and I voted for him 2 x) and was initially very excited by him becoming PM thinking he'd be a breath of fresh air but yet again all we got was a neo-lib blinded by ideology.

I feel exactly like you do and WAS a national voter.

But what REALLY grinds my gears now is the complete denial of any issue around immigration/house prices/money laundering - you name it! Just Deny Deny Deny.

It just stuns me SO many cannot see the emperor has no clothes....all warm feelings - no facts about how NZ Inc is actually doing....

I'm a conservative, albeit one with a social conscience and the cupboard is pretty bare for options.

Looks like Winston will get my vote (never thought I'd say that) as this crazy Immigration policy and the knock-on effects of this are the # 1 issue for me.

In my 32 years of voting I've never been as disappointed in a leader who I initially had such high hopes for.

That is his fault too. Everything is his fault. It is a problem when you have a place people want to live. If people didn't want to live here they wouldn't pay those prices. So the solution is either provide more houses to meet demand, make it less attractive for stop people from being able to come.


Boycott Ray White!!
(especially if they keep on pestering me with cold calls)


Done. and they have had my personal cold call telling them.


Ask Winston Peters
Or Donald Trump

Onwardsupwards. Why boycott Raywhite Real Estate?
They are now directly advertising their listings on China's biggest Real Estate Website.

As it is trademe has lots of language translations for foreign buyers. But this takes advertising to foreign (chinese) buyers to a whole new level as it is their website that they are familiar with.

Any one, anywhere in the world can purchase NZ real estate of less than 5 ha, no questions asked.
Its only if they purchase bigger than 5ha that they have to ask the NZ government via the Overseas Investment Office for permission.
NZ real estate has been on the World Market for years. It has only become a major problem since foreign interest rates have dropped to zero. Eg you are an English businessman with $500,000 pounds to invest, if you put it in the bank the interest earned is o% or buy a house in Auckland and get a rental return of 3% with the chance of also scoring capital gains. The NZ government will even top the tenants rent up with tax payers money.
And now the Reserve Bank is making it harder for Kiwi investors where the money at least stayed in the country. Meanwhile NZ realestate is being pillaged by investors from all around the world.


Why would any FHB subject themselves to this? I am born and bred Aucklander and love this place. But let's face facts: this isn't living. If you can leave go now - there are nice places in NZ or look abroad. Buying a home in Auckland will be financial suicide for you and your children.

Financial genocide might be a better description. Those e2nz guys really aren't far off the mark. leave, employers argue skills shortrage, more immigrants allowed in.....and on it goes. The Jong key masterplan.

Maybe Auckland will become the Chicago of NZ.
A complete s.... h....

Chicago ?............. are you kidding me , have you been to that rat hole ?

Its a massive series of slum suburbs.

It could never happen here

Why not? Auckland's already a slightly less massive series of crappy suburbs.

Auckland wishes it will become Chicago. The way the city is going currently I'm thinking more along the lines of Manila.

It is very instructive to compare Christchurch with Awkland.

The Gubmint response to the earthquake sequence (5-6 large quakes in the 2010-2016 period, latest in Feb 14 2016) was:

  • Red-zone and pay out (at 2007 GV) the house value (in most cases, some sad exceptions) where the land was deemed unbuildable-on in the next few decades
  • This allowed affected households to re-establish elsewhere (e.g. Rangiora, Rolleston, Lincoln, Kaiapoi, Amberley) relatively quickly, yet before new builds had ramped up to any great degree
  • The gates were thrown open on buildable land: a multitude of new subdivisions - some under way (e.g. Prestons, a Ngai Tahu JV with one of the food supply duopolists), some locally expedited (mostly in Selwyn District, country council pragmatism), and some in the pipeline in the Christchurch City area expedited via the LURP aka the Gubmint gun to the forehead of the Clueless City Council.
  • The net result is flat house prices, falling rents, and a vindication of the flood-of-supply=plateaued prices hypothesis.
  • And all of this against an outflow of perhaps 10,000 souls and an influx of perhaps 30,000 contractors, builders, and the accompanying double-cab utes and white vans, so most likely a net Immigration. Maybe. Hard data is lacking here - no real Census
  • Oh, and around a net Immigration of several million orange road cones....

If Awkland:

  • Land-supply RUB's, MUL's and other planning-gain-fomenting nonsense is torn up,
  • If multi-proof consented factory builds supplant the currently painful process of 'building' houses stick by stick, in the weather, using occasionally drug-tested hammer hands, materials from a cozy duopoly, and consents from a hopelessly rule-bound Council
  • if infrastructure is built out ahead of greenfield areas using the Infrastructure Fund, local bonds or other currently feasible but unused financing methods
  • if fast, cheap, warm and small is taken as the design guide
  • If ACC rates buildable but unbuilt-on land with a swingeing rating differential to prompt land-bankers to piss or get off the pot
  • if the PAUP actually gets passed in something like it's present (de)form

Then we may yet see a soft landing for our largest city.

But thems a Lotta IF's.

I read some months ago that Christchurch as a city had only recently returned to pre quake population levels.


I can't wait for all of this to go tits up. And we actually deserve it for our greed and stupidity.

I'm probably a bit younger than a lot of the commentators on the site, perhaps that means my mind hasn't yet been corrupted by the harsh realities and experiences of life - which by the looks of things means that you only end up looking out for number 1.

Reading about all bubbles and financial crises of the past, I was always left thinking - 'surely people can't that stupid', 'surely common-sense' would prevail.

But now I find myself amongst this housing crisis (bubble in my opinion) I'm seeing it play out first hand. The fear of missing out is strong, the desire for personal gain is also very powerful. But surely people can see the train wreck this is going to be?

I don't want complete disaster but I agree with you. I think having read what you've had to say recently, we're very much in the same boat. I just cannot see how doing nothing at this stage is a good thing. We have to change and adapt, we just have to. My heart breaks for Auckland, it does. I'm firmly by your side Independent.


I'm an old-ish fart, and really feel for you guys, up against a powerful bloc who feel entitled to live on your earnings. I would have liked NZ to extricate itself from this without it erupting into violence and bloodshed, but get less and less confident that it will. Tension is building, there are a lot of disenfranchised people with a legitimate grievance, less and less to lose, and absolutely nothing effective being done to solve the problems. Greed, stupidity, propaganda and inertia are powerful forces.

Oh Kakapo, I follow you with great interest too. I feel your support strong.

I'm pledging to Spinoff and I have emailed them to volunteer my time. This isn't really about buying property for me anymore, it's about trying to help the place I really love/loved so much.

Side by side I'd like it to happen without unrest but, I feel it too. I hear it from my peers. It's building and it's scary.


Speaking as someone who may well have to put on the riot gear and go out to be pelted with bricks when it blows. Not looking forward to that part, and would prefer that we could collectively un-arse our heads and manage our way out of this fustercluck. Sacrificing the working lives of who knows how many citizens to short-sighted greed and pretend economics is not going to work.

Start offering free rides to Omaha Beach for the homeless, or other disenfranchised, from Auckland. Some nice places on the Coromandel you could consider also. Heck hire a bus and take 50.

Good idea. Some sandwiches for the kids, sleeping bags, campfire singalong on the grass verge, make a fun picnic of it.

That's simply not true, those who feel disenfranchised are the same people who wouldn't be able to shake 2 bob to do sweet F A about anything, so not expecting much out from that quarter, stop with the BS keyboard warrior nonsense...

I_O I get the impression you are trying to convince yourself that the "train wreck" is inevitable. Constantly studying the bubbles of the past in an effort to seek solace. Essentially the same comment over and over with its holier than thou tone. If it turns out that it is your own theory that goes "tits up" you can feel at ease in the knowledge that at least your mind hasn't been "corrupted".
Many people in your position would and have invested in a house but you have chosen not to. That is your dog in this race. Let's see how it goes.


ZS - have you done much/any reading on behavioral finance?

If you did, and you've done your research on bubbles of the past, you certainly won't find any solace in what is happening here in Auckland right now.

I maintain that Auckland prices are more rational than irrational. If it was truly irrational then those not in the game could see the irrationality of it and wouldn't be too concerned or would make compassionate comments. They wouldn't be wishing a train wreck to happen, why would they?
Yield with low interest rates is keeping things stable and far from irrational.
A couple, both earning, with a mortgage free house can buy a rental property and be almost neutral or just pay out a couple of hundred dollars a month in outgoings. Not much more than they might spend on coffee to go.
Certain cities around the world have become affluent global suburbs. Auckland is one of those cities. Remember location is the first rule and Auckland ticks many boxes. So you see it is not irrational.
It is only you who thinks it is irrational because you don't seem to see the big picture or you think it is immoral for there to be such a thing as affluent suburbs. Or you believe Auckland is rubbish and not worth it.


ZS - I often don't know where to start...but:

1. I'm not in the game and I can see how irrational it is.
2. Why would i make compassionate comments to greedy people? That would only encourage their behaviour. I could say: 'Oh you poor darling ZS, you've got over-leveraged in a speculative bubble because you thought you were going to become rich by forcing young people into years of renting, but I really feel for you and want you to know that what you've done is okay and I fully support you'. Yes - that makes a lot of sense....
3. When the train wreck is going to benefit the majority of people of NZ in the long term (next 30-50 years), of course I'm going to back that policy. It's short term thinking that has got us into this tricky situation.
4. How the hell can a young couple be mortgage free with a house these days if they live in Auckland and earn the average combined salary? Most people I know my age will be lucky to be mortgage free by 55 and that's assuming interest rates never increase, there's no recession and neither partner loses their jobs. And then why would they want to buy a rental property with a 2-3% yield, if not speculating on capital gains - which I think this whole shambles is based upon.

Your whole reply indicates that there is a certain rationality in this market. It is a game with significant stakes, unlike, say, tulips.
I believe you are in a sense in the game by holding back, gambling on a crash. Didn't you say you did have enough deposit to purchase a home? If you bought a year ago you could be 100K up.

Couldn't disagree more.

Yes - but with the same logic, I could be 100K down in capital and at the same time have paid $30,000 to the bank in interest - and as the Finance Minister, the Reserve Bank Governor and ANZ CEO have reminded us, house prices can go in two directions....not just up.

How much you pay in interest is irrelevant as you would have paid this in rent.

Sure about that keywest? My rental costs are probably half of what I'd be paying to the bank in interest from the loan of a typical house in Auckland and can use that $$ to buy things like shares and bonds that generate an income stream for me.

But sure - that's irrelevant if you've got property capital gains brains syndrome.

1. I'm not in the game and I can see how irrational it is. --> you being not in the game may itself be a example of behavioral finance - confirmation bias. You, presumably, CHOSE to not be in the game because you thought prices were irrational. That's not something (i.e. you not being in the game) you use to support an argument against ZS's assertion that prices are rational.
4. How the hell can a young couple be mortgage free with a house these days if they live in Auckland and earn the average combined salary? Most people I know my age will be lucky to be mortgage free by 55 and that's assuming interest rates never increase, there's no recession and neither partner loses their jobs. And then why would they want to buy a rental property with a 2-3% yield, if not speculating on capital gains - which I think this whole shambles is based upon. --> there are rental properties above 2-3% yield....

Don't bring in behavioural economics it will just confuse him.

Don't forget Hyman Minsky (financial instability hypothesis), Joseph Schumpeter (credit view of money), and Steve Keen. I wonder if ZS has any grasp on any of those concepts and the dangers that are now baked into the Auckland housing market.


I don't live in Auckland and never have done, but my younger son and family do. They both work in Auckland and all they have done is buy a house in which to live. They are neither stupid nor greedy,but just an ordinary family. On paper, they have made a great deal of money, but as they intend to continue living there, they would have to take on an enormous mortgage to move upmarket,so it means little.
There must be many more in a similar position,as well as those who have now retired.
There is of course a fair amount of greed around, but you can't tar everyone with the same brush.

Yes good point and I can understand that. But I bet they enjoy that 'on paper' wealth they've got. So yes it's not your family buying all the houses at such high values, but who is?

Is it foreign buyers, is it investors?

And I know you're saying your family aren't greedy - but would they be willing to vote for policy that might result in the value of their homes depreciating? Probably not. So in a sense, are those who purchased years ago who want status quo and keep their paper wealth any more or less greedy than those buying the houses at current prices? I think they might be equally guilty. To turn a blind eye doesn't make you innocent. And to allow a systemic problem to grow like this - is this innocence?


I have read your response several times before replying and I see it as a classic case of confirmation bias. You have a fixed point of view and will simply ignore or downplay anything that contradicts it. However, let me put the argument in a slightly different way. If house prices were to fall by say 10% across the board, their house might fall by some $150,000,($1.50m to $1.35m) while a property at say $2.50m would fall by $250,000, potentially making that property more affordable for them.
Your second paragraph is really quite offensive. To talk of guilt and innocence is absurd and perhaps you can explain just what you mean by 'turning a blind eye'. In what way have they 'allowed a systematic problem to grow like this'?
I think you should reconsider your nom de plume. Perhaps Inherently Biased Observer would be more accurate.

'You have a fixed point of view and will simply down play anything that contradicts it'. Gee this sounds familiar - John Key wouldn't be like that would he? Typical property investor/speculator wouldn't either would they?

No confirmation bias from your perspective though of course?

Independent_Observer does seem to be a misnomer for you.
The trouble with your vision is that it requires quite a homogeneous culture that would just know to do the right thing or else very strict rules around house buying. It seems few people in NZ desire either of these things.

What are your thoughts about this fellow:

Wellington man becomes home owner at 21 after saving since he was 7

The immigration and foreign money is keeping the train on the tracks.
She's heading down hill and picking up speed, the growth recipe isn't sustainable so what next when the growth needs infrastructure? Who going to pick up the tab? begs not!

The headline is extremely misleading .

We bought a home in a North Shore suburb some years ago and we have done much better than relatives who have stayed in Wellington in a cheaper house . In $ terms our $500k house is now worth $1,75 million whereas their $250k house is now worth $500k (ish)

Quite simply , wages are higher in Auckland in most instances so we can pay more , secondly the real rate in growth in value in $ terms of the asset will be far greater in AUCKLAND than elsewhere .

Auckland is where the money is for Mr Joe Average , and this is not about to change anytime soon .

Real disadvantage is for renters who will become an underclass

you assume prices will go up this way forever, so all FHB who buy in the future will share the gains like you have and be happy about it. But in reality that does not happen and there will be a saturation point, else all that will be left in Auckland are old people holding 5-10 houses or people who get money from overseas since they are the only ones that can afford. Taking up a mortgage 10 times your annual earnings will only lead to a city full of stressful people!

Auckland is not attractive financially to many people boatman. They can make it work better for them elsewhere. The net internal immigration in New Zealand is out of Auckland. Repeat out. It has been that way for many years.
The wages / costs equation in Auckland is not that good for Joe Average and they vote with their feet.
Any increase in the Auckland population is from overseas, which also makes up for Aucklanders moving away. and clearly the comparison between where they came from and Auckland works. But it's not a comparison between the Auckland and the rest of the country.

you do realise that its all just fiat numbers now driven by Central banks which have abandoned free market economics and just print IOU's for the glorious future? ie Its now ALL worthless monopoly money, which when it all goes tits up, wont even help you light a fire, given its actually just pixels.
Yes, i know, dont startle the sheep.

ham n eggs,

I am getting fed up reading about fiat money and the imminent end of the world as we know it. We have had fiat-non commodity based money-money for a long time and are you really suggesting that the global economy goes back to say, the gold standard?
If you have a useful suggestion to make, let's have it., otherwise give it a rest. personally, I like the proposal put forward by Lord King, former governor of the BOE, in his book "The End of Alchemy", money,banking and the future of the global economy.

the problem linklater is that there is now no solution. We are too far down the overshoot path to come up with a viable way out. Because the root cause is energy surplus in the economy - this cant be fixed by any amount of financial manipulation. We need ever increasing debt to harness the energy, but we cant afford to pay for ever increasing debt. Although central banks are kicking the can with thin air backing, they are making the crash bigger every day. If you want advice, prepare for shut down of trade, food shortages, conflict. And no one wants to hear this.

BTW, it wasn't until Nixon that the gold standard was abandoned - not long ago, and COINCIDENTALLY , this was when the US reached peak Oil. Its all been ever lower interest rates and debt growth holding the ship together since. So dont worry, you wont have to be fed up with hearing about fiat money much longer.

Just imagine if Wellington had a Christchurch-like earthquake. A very likely possibility. What would happen to Auckland property prices?

Just imagine if if one of the Auckland volcanoes came to life....

From my glancing exposure to geology courses at AU I remember that the likelihood is almost certainty that the Auckland volcanic field is active and further any new volcano would be in a totally new place. The crater in Mt Eden would probably be a safe spot when a new one erupts... Personally when living there I kept an eye out for steam arising from unexpected places....

* Past performance is not an indicator of future returns.

Wages are going nowhere. Your 1.75 million (on paper) house isn't going to become a 6 million house over the same time period into the future.

Anybody buying in Auckland now should be doing so with eyes wide open. They might end up with a very overpriced lemon.

And the council will charge you inflated rates on your $1.75 million dollar home while you sit parked on the motorway trying to get home.

It's absolutely true. While there is this fantasy of Auckland being flash and with lots of yuppies the reality is that all but a few are cash poor compared to other parts of the country. Aucklander's don't have cash in their pockets and I have seen this many ways and many times. It's not a new phenomenon, although it seems to have got outrageous in the recent decade.
It must be hard to do business there given the amount of cash that is not passing around, instead being diverted as interest payments. If house prices there were actually reasonable there would probably be a business boom.

Funny seeing people here complaining about Auckland finally growing up as a city. Just move to another city/town in New Zealand If you don't like high density.

or head over the ditch to our friendly neighbours who are waiting for us to arrive with open arms NOT.


From what I have read Chinese people cannot own land in their own country. They can use that government owned land for 70 years and build a house on it. What happens after that I do not know or what happens to all those apartments. But if we let any Tom Dick or Harry buy a house here then theoretically there is an insatiable demand for property here. And Australia. And Canada. While all those Tom Dicks and Harrys can buy a property here that does not give them permanent residence. But that does mean foreigners can own our country. In my view unless there is a blanket restriction on non permanent resident foreigners buying property, house prices will keep going up and homeownership for New Zealanders will be out of reach. A type of feudalism will be the result. I certainly will be voting for any party that states no non permanent resident foreigner may buy property in New Zealand.

Both the major parties won't do that. The other Kingmakers can try to force it, but not sure whether they will succeed.

Wrong. It's official labour policy.

Well the next set of LINZ data figures should be available next week, so hopefully that should help to clarify who is buying what in Auckland. I really hope they've fixed that shoddy questionnaire.

Hopefully is done in a correct manner withot bias.

Should give full data that is citizens and residents vs non residents including overseas buyer, students, work permits holder but i think that to create a smoke and cover up - only people who are overseas is termed as overseas buyer ignoring the students and other non resident buyer who are buying with overseas money is ignored.

Once you have actual non resident data, than add investor to it and see if FHB has become an extenict species in Auckland or is on the way to become - courtsey JK.

Auckland is seriously overpriced and this is coming from a full time property investor and not speculator.
We all know but some won't admit it has mainly come from overseas buyers money that don't seem to care how much they pay for property.
Common sense is not prevailing.
For the same price of one average first home buyers house in Auckland I have purchased 3 recently and will be returning over 10per cent on purchase price in Christchurch.
Christchurch prices are not that flat, you need to bear in mind they are skewed by the many of "AS IS Where Is" houses that people are snapping up in big numbers at the moment.
Building of new houses is also going nuts.

My concern is the 'as is where is" houses will become the slums of Christchurch as landlords don't perform regular maintenance on the grounds that is an "as is where is" house i.e not worth it.

No you are wrong, quite the opposite.
Most landlords are improving the properties.
I think that many have the wrong opinion on AS IS WHERE IS properties.
The stuffed ones have been demolished and site vacant or rebuilt.
The Asis where is generally tend to be a repair which is happening.

I do wish they would stop lumping Waikato/BOP together an produce separate stats for Hamilton and Tga. That lower quartile chart bases at 335k yet Hamilton and Tga are both well above that so it is misleading.

In Tga you will not buy anything for 335k.

Just the same as when they comment about Canterbury/Westland. Hell of a difference between Christchurch and Hokitika,

What I don't understand right now, is how can John Key and the National party get up and tell Labour to get some guts over the issue of sending troops into the middle-east.

And yet when we have people sleeping in cars and a whole generation of FHB's who are slowly being denied a basic necessity such as a home, they have no guts at all? Why aren't we banning foreign buyers? Or if we aren't banning them, why aren't we taxing the hell out of them to help build houses for the vulnerable NZ'ers?

I can smell a rat - it's called National - but luckily I'm told we're going to be pest/rat free by 2050.

I bring glad tidings!

Homeless crisis in Auckland has abated:

South Auckland's Te Puea Marae to stop taking in homeless

Marae chairman Hurimoana Dennis told NZME 16 families had been placed in permanent housing and 13 in temporary housing. Eight were asked to leave because they were not following the protocols of the marae and 19 people were still on site.
The remaining 13 came and went or "just needed advice", he said.
"We think the tidal wave has subsided.

Really I wouldn't hold my breath on that Zachary, I still see plenty of homeless people in the CBD and even in the expensive areas of the suburbs. I remember when I first visited Auckland about nine years ago. I was really impressed that there were no homeless people on the streets.

Now it's a very different case in such a short space of time. There are plenty of homeless people out there walking our streets and apparently we have 33,000 empty homes in Auckland and yet our National Government chooses to do nothing about empty homes.

At least Canada and the UK has introduced taxes to deter the wealthy from leaving their property assets empty. And Vancouver's empty home rate is less than a third of ours here in Auckland.

* Vancouver official empty homes = 10,800 homes and condos sitting empty

* Auckland official empty home = 33,000 empty homes

Now that is shameful for such a wealthy city!

This from Shamubeel Eaqub himself:

Auckland ghost house claims 'bollocks' -

Yes, you are right. It is interesting that this issue has (it seems erroneously) been jumped upon in both locations where house prices are out of control. Vancouver seems to have a vacancy rate of just under 5% ( which isn't too different from the 6.6% for Auckland quoted in the NZ herald article. These are apparently normal rates.

More than anything, the ghost house theory probably shows how people want to look for the bogey man when they start getting frustrated.

N.B. From what I have read I do think it is likely that money coming from a certain offshore location has distorted both markets. It just appears that the houses aren't being left empty. For example, I rent one...

LOL, That article doesn't seem to be challenging the number of empty homes all that well. Its obviously a political panic reaction to Vancouver's new tax moves regarding empty homes that recently being introduced.

Besides all it takes is to check the electricity usage on homes over a few months period to fully identify which ones are empty. Though I'm guessing that National doesn't want to do that as it would need to admit the truth about just how many are out there.

It would make sense though, wouldn't it, that at any one time there will be a percentage of houses empty? People on holiday, houses between tenants or owners, occupants in hospital and so on. It seems counter productive to make a big deal of it when it is clearly just normal.

Not really Zachary and I agree with two other guys, That you forget or like to push under the carpet, that a big by product of Non-resident Investors is to hold empty homes. Dress it up all you like and you can't disguise the reality of life.

Basically you love None-resident Investors because they massively push up Auckland house prices and that's all you care about isn't truth be told. Can't last forever Zac.

Well I suppose it doesn't make much difference if they leave them empty or rent them out. If I was rich and owned an apartment in London I would leave it empty. It just annoys me that you seem to think all the empty houses are owned by foreigners when that cannot be the case.

No not all but a significant amount - worth taxing ;)

I lived in a house in Clarges Mews, Mayfair for many years where the only other permanent resident was the then chairman of the London Stock Exchange.The rest of the houses (5?) were owned by absent foreign language speaking owners whom I never got to know when they occasionally inhabited their homes for the odd weeks here and there each year.

Yes not quite as sad as the Bishops Avenue homes in London that have been abandonded by Billionaires.

Funnily enough, one of the few private client's I had, an art dealing billionaire, bought a similar derelict home in Holland Park, it still went for about Stg 2.3 million, he thereafter spent another Stg12.0 million doing it up in the late eighties.

I hope he made his money back Stephen. Though talking of art; see that still may be a significant investment area. Here we are scrambling about after property when there maybe other markets worth exploring?

I remember after the GFC and most investors switched to other markets from property and art still plays a significant role, Out of curiosity I have been checking out

My purchase of an inferior home in South London at around the same time has quadrupled in price according to an old friend who still lives nearby, since I sold it after it doubled it's value.

Well played Sir :) And I hope you sold before all the recent tax regulations for oversea investors set in for the UK. It's a not of a mine field now, I only managed to get out by the skin of my teeth.

I retired back to NZ in 1998.

Sounds of Silence

Amazing that this guy can get so much mileage from last years news

The number of ghost houses was last years topic

This years topic is the number of occupied garages compared to the number that werent occupied at the last census

As economists go, Shamubeel doesn't hit the spot for me. I,m not sure that he isn't JK's puppet.
I remember him advising people a few years back not to buy a house to live in because it was all going to fall apart. He got that wrong, prices have doubled since.

NH I think you will find he has more than doubled his money invested in such things as equities. World share markets like the DOW are at record highs. Unlike many home owners he and his equally well qualified wife earn big dollars and would have pumped some serious dollars into their investments. Landlords in NZ generally do not have great incomes from my experience. Hence they resort to leveraging housing to increase their capital. People who have the talent and income like Shamubeel do not need to resort to housing to get ahead. They have the ability and income to make serious good investment decisions which make housing look really tame.

Gordon I am sure your correct that Shamubeel has made plenty of money from investing. I was referring to when he was advising people to invest in shares and not buy a first home, be renters forever.
I have never heard him say anything solid against NZ immigration policies which if your a layman like myself appear to be the biggest unfolding financial disaster the country has ever had.
Kerry MacDonald an economist featured on this site back on the 16th June summed up our economy brilliantly in my opinion and totally opposite to Shamumbeel.

Those numbers for FHB's in Auckland aren't as bad as I thought they would be. I'm not saying it is easy though. If more houses (terraced houses and apartments) which were suited to FHB's were built and interest rates remained low, it isn't the end of the world. The problem is very little is being built in this space.

Will Brexit bring more Caucasians to our shores ? More pressure on house demand ? More chances of the bubble floating along nicely for more time, say another decade ?

Suck it up a little people. The media only ever focuses on tragic examples of people who think it's unfair they can't afford to buy in central suburbs Akld. I'm in my 40's and due to the timing of my lifestyle and career choices, have never been able to entertain buying in any of the central suburbs. However, when my partner and I decided to move to the outskirts of Auckland a number of years ago, we found there was plenty to like (and buy). This has only changed in the last year with affordable listings drying up due to supply and demand, but surely the transport plan and unitary plan will help at least a little. As others have commented and/or implied, you can sit on the sidelines griping forever, perhaps you will get a crash but will the banks loan you money to buy in the city in that recession without massive equity (I doubt it). So perhaps open thine eyes and figure out WHERE you can afford to live and just get on with it.


a lifetime of debt slavery signed up just before the crash - sounds awesome

Too right. The highly geared seem to forget one thing: Bailouts are for Banks, not Bloggs.

I think you missed the Memo. Basil 3 implemented "Bail In's' and "Bail Outs" are a thing of the double 00's. Just look to Cyrus as an example.Next time there is a crisis those big CD's balances will all take a giant haricut. Why do you think so many have been taking their money out of the banks to buy investment houses. I see it all the time. My brother flew down to Auckland to take all his money out of the Aussie banks and move it to Singapore where there is no "Bail-in'.

Those FHBers had better "just get on with it", for your sake.

No one wants to be at the very bottom of the pyramid, at the very end of the game.

'Very end of the game', you must have an awesome crystal ball mate. Sure it seems like prices are a bit mad thanks to the free market experiment and whatever else, etc, but is this equally perhaps a time of consolidation for our largest city?? Who's to say that we won't look back in time and say how xenophobic we were about immigration now, and that prices mightn't just plateau soon and into the next decade or so (remember how slowly prices increased for decades), due partly to the slow rollout of more land that is coming with the unitary plan. Auckland in 2040, with a vastly bigger population may not be so focused on commuting time to the cold and windy CBD. Spending time in larger cities overseas has me wondering if 400,000 more homes and a vastly bigger population may come to mean suburban centres have more local resident workers than CBD commuters; in this instance what we think of as slightly too pricey lower quartile homes in outer 'burbs now might turn out to be justified in time...

Some people unfortunately have to pay the price to be in Auckland. The annual salary may be 20K more from the rest of the country but on top of your big mortgage you've got a daily 2 hour commute to work, and maybe you need to get up 1 hour early each morning to beat the traffic so the night before you'd need to go to bed 1 hour early, therefore thats a total of 2 hours + 2 hours on the road + 8 hours at work. Thats 12 hours of your life gone and the quality of life is crap..
Time you could've spent with family, money you could've saved for overseas travel and a better house if your choose to leave Auckland.

But I guess people are different, to me it is a waste of ones life.


Haw haw haw ...... double haw haw .....Greetings from my beachside residence at Kaanapali, Maui ...Hawaii for those geographically challenged. I see my group of elites or the 0.1%'s and their "plan" is working remarkably well ol' boy in the leafy,tree lined streets of Tamaki Makaurau. Good to see the locals of Aucks moving out to other parts of the "shakey isles" ...only to be replaced by immigrants from the East and sub continent who just have "briefcases" full of "funny munny", to keep pushing up that real estate bubble to the moon ! .....and my ilk can pay these "newbies" far less than "Mr & Mrs Wayne Kerr" who have lived in Pakuranga all their boring lives ...haw haw. A double edge sword for us 0.1%'ers !! high house prices and low wages for the plebs !! ...a true mai tai cocktail mix of pecuniary bliss ....haw haw
Well, back to work little people ...keep cranking that cash flow to pay those ridiculous rents to the "rentier" classes ....while I settle back into the chaise lounge ...with a wee flute of Dom Pérignon Rose Gold watching the golden sun sink behind Molokai Island .... true bliss ...haw haw ....haw

Ahh bless you Charlie you make me laugh. Tell em like it is. ;)

That funny money is making many New Zealanders very wealthy...

keywest .....good day to you ol' boy ...your "broad" statement may be true ....but it's making me and my ol' boy network very much more financially endowed than your good self .....haw haw ......Climb aboard the bankers gravy train room left now though... ...only in the caboose hanging on by your fingernails ....this "gravy train" has left town !!! haw haw .....enjoy your weekend cleaning out your damp, flea ridden, cold dumps that your deelightful tenants have left for you, after the umpteenth drug/booze "free for all"!! ....haw haw ....but get those interest repayments in Amex Platinum card needs topping up ol' boy ....haw haw haw .... toodle pip for now

Double post !!! .....ol' Charlie has had one or three too many ! ....haw haw ....haw

Can't help but think alot of people are really missing the boat. Boom and bust is all part and parcel of market economic cycles. True we now find ourselves in increasingly frequent cycles and as such one has to understand that you can benefit at both ends of the spectrum. There is huge payoff for saavy investing in both. The emotive doomsayers here somehow trying to morally justify a crash I think are largely rather blind to the fact that the very 'architects' of a 'bubble' will probably do fantastically well out of its demise. The people that will truly suffer will be the already 'disenfranchised' and those mom and pop 'investors' who got suckered in at the closing stages of the 'new paradigm' euphoria. For every hundred people who lose the shirt off their back there are another hundred who could afford to lose their Alexander Kabbaz and a good number of them will profit either directly or indirectly. Whether we enter into a new period of hyperinflation and/or sustained deflation who knows but I think we are all sitting on the edge of one hell of a show in the next few years. Everything I am seeing tells me so and all my strategy is aligned accordingly. These are interesting times but they are just variations on a theme - circumstances change but humankind, bless them, are a predictable bunch so most, if not all the rules of human behaviour still apply.

".....circumstances change but humankind, bless them, are a predictable bunch so most, if not all the rules of human behaviour still apply."

So true. Things are the way they are because we're all humans. People can keep moaning but nothing will change. House price might drop if people stop moaning one day because moaning its like free advertising!

Heck, trives because of all the moaners! No moaners no profit.

Marvin Gaye's Inner City Blues ( is one of the most beautifully-sung, heartbreaking, and soulful critiques of urban poverty.

If we carry on on this track, we're going to see more of this right here, and won't have to look anywhere else for it. You know you've arrived as a global city when you have a permanent underclass and a growing homeless population. Well done Auckland, you're a grown-up city now.

I would view the new Unitary Plan as an aspirational document, certainly its goal of 400,000 new dwelling units in 40 years is unachievable on a number of levels.
Firstly, Building 50 Houses a day. How is that possible with on site builds?

Here is the census of LCB's for the entire country in 2014
Carpenters : 18,714
LCBs Totals : 28,722
(total of all specialties includes:Site Design,External plastering,Bricklaying & Blocklaying Foundations Roofing).

I immigrated from a Metropolitan Region that grew from 1.4 million in 1960 to 2.6 million in 2010, and that was with adding 800,000 in the past 30 years alone. Minneapolis/St. Paul in the state of Minnesota did all that growth while maintaining a Median Home to Median Income Ratio of 3 to 1. Pushing people into Apartments wasn't the way it happened as the Region Ranks as the no 2 'most liveable" metropolitan area in the US. Instead 3 critical components were needed that I see lacking in the Auckland Unitary Plan:
: 1) Massive Road Building coupled with water/sewer expansion and financed with Bonds. (Bonds are
eagerly purchased by locals as the interest earned (only by locals) is tax free.,
2) Rezoning Rural Land to Residential and then immediately increasing rates forcing landbankers to
3) Developing hundreds of 300 to 400 unit subdivisions (like in Pokeno) in the "ex-burbs" as that is were the
600m2 lots can be easily cut up at affordable end user costs and then building quickly and simply.
Standard formula houses with few design choices. Believe me young buyers care more that they have
their own quarter acre of paradise than whether it is the flashest house.
Looking around Auckland I would say that is how it was done here 50-60 years ago as well. Motorways & Bridges were built, Manuaka and the North Shore were the new frontiers that allowed for affordable housing development. But somehow in the 90's the region developed a new religion that imposed the doctrine that we can never do it that way again, and so for 15 years young families have suffered because of it.

And just to add a point about traffic when adequate investmests in infrastructure are made. Traffic is no worse .in Minneapolis/ St. Paul region after adding 800,000 to its population. A 30k commute into the CBD takes about 35-40 minutes, and New Light Rail lines are in the planning stages with 2 already added in the past 20 years, but the majority of the traffic is still in cars and not going to the CBD as business too has moved to where the people are. The only "intensification going on is converting old factories near the CBD into Apartments. In all that time- in over 60 years they have never "intensified" the leafy city suburbs. Apartments were zoned in 100 years ago on T2 arterial roads, and not much has changed other than right down in the CBD areas.- and so the idea of cutting up someones 800m2 lot with 80 -100 year old houses on it and putting 2 dwellings where one is now just isn't in their vocabulary.

Bottom line, I think the region could best be served by 400,000 new residential lots created between Henderson and Orewa- up top where there is plenty of wide open low value rural land. A 10 year "think big' infrastructure plan coupled with seriously blowing open the Rural Urban boundary could deliver affordable housing in vast quantities.

Yeah I agree Tommy, I disagree with raising the population but if were going to do it then north is the direction as the land isn't valuable for horticulture. The Government can spend the billions up front building the roads and infrastructure.
Leave the NIMBY's alone, build north.
But why did we want to spend billions of taxpayers dollars building infrastructure for immigrants? What is the logic of this apposed to just shutting the door and going back to handpicking 10,000pa.

Agreed on the general concept of handpicking but let's face this: what does NZ have to offer to these "handpicked 10000"? The smartest and richest people require some persuasion to move to NZ when the world is their oyster. And guess what: they will jack up housing prices if (and that's a big if) they choose to move here.

t_i who cares if the smartest people in the world don't want to come here.
And if they do buy expensive houses all the better.
NZ's problem is the number of people coming.
a provincial city full, 3 years in a row.
Immigrants don't bring any infrastructure with them. The NZ taxpayer gets that burden. Just one sewerage pipeline out West Aucland is costing a billion plus dollars.
The roading is often at a stand still which costs the economy. Whos going to pay for all the new roads needed? My guess, the NZ taxpayer.
When National Took office 8 years ago the National dept was just 10 billion. Now its 36 billion and with more people living here the quality of living in NZ cities has gone down.
so yeah, if we can't get quality, take no one. Shut the door. Where full. We can't save the world.

so yeah, if we can't get quality, take no one. Shut the door. Where full. We can't save the world. --> nobody is saving the world. Like it or not, New Zealand experiences GDP increases when the immigration tap is open (but of course there are different arguments about that and the resultant benefits). NZ is therefore saving itself in the face of a rapidly globalised world. Take your pick: a backwater or a top tier international city?

Immigrants don't bring any infrastructure with them. The NZ taxpayer gets that burden. Just one sewerage pipeline out West Aucland is costing a billion plus dollars. --> immigrants do not pay tax?

The roading is often at a stand still which costs the economy. Whos going to pay for all the new roads needed? My guess, the NZ taxpayer. --> see above regarding taxes. Immigrants do not pay for transport?

When National Took office 8 years ago the National dept was just 10 billion. Now its 36 billion and with more people living here the quality of living in NZ cities has gone down. --> probably just Auckland. Other people might disagree with you though.

So, so, SO on point.

Fantastic link mate. I'm sharing that with as many as poss

"So what do you want to be when you grow up son? A builder, plumber....maybe go to University and become and Engineer?" "No way Dad, me and all my friends are going to be Property Speculators!"

The unfortunate thing about this whole situation is that very few seem to be concerned about our future in NZ, we criticise the Govt for doing it but I suspect a lot of New Zealanders, truth be known, are looking very short term.

The problem has gone out of control due to speculators mostly by asians. Ask any real estate agent in Auckland and will vouches that 80% houses are bought by them and with easy overseas money do not mind premium as they just want to get the money out of China for if caught n government finds out will have problem so do not mind shipping money to NZ and what better place than property and that too literally tax free if played properly.

Simple control/ tax like canada and australia will belp. May be the government will put land tax after next week overseas data when releaised provided is not manipulated with words and is a sincere correct data as it should be.

Property professionals says that it will go a long way in controlling house price along with other measures.

May be the Non Resident Buyers are actually not many but to clear the misunderstanding, IF any, government should see to it that correct data is released so that if they are not one of the main reason for housing crisis, it will help the society as remember that if people feel that they are to be blamed their would beresentment, which is an undercurrent at the moment and IF they are one of the main reason than also will help the government to fix by imposing Land Tax as suggested by PM.

In both the case correct data should be released to help everyone.

So who is your vote for change?

Labour are a shambles, Winston is getting a little old........Act has weak foundations....greens are plain loopy.

Thanks for the long discussion on this financial topic. It was really very helpful to me.


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