It's not just the low paid who are being squeezed out of Auckland's housing market, its affecting middle income earners too

It's not just the low paid who are being squeezed out of Auckland's housing market, its affecting middle income earners too
This might be as close as many Aucklanders get to owning their own home.

By Greg Ninness

It will now take a typical Auckland couple nearly eight years to save a 20% deposit on their first home, compared to about four years in other main centres, according to's Home Loan Affordability Report.

The report tracks how long it would take typical first home buyers in each region to save a 20% deposit on the REINZ's lower quartile selling price in their region.

The income calculations assume both partners work full time and earn the median weekly wage for people of their age group (25-29) in each region and are able to save 20% of their take home pay to put towards a deposit.

The accompanying table shows how the ability of typical first home buyers to save a 20% deposit has changed over the last three years.

In August 2013 it would have taken a typical first home buying couple in Auckland 5.5 years to save the 20% deposit for a home at the REINZ's lower quartile selling price for the region, at that time, of $453,300.

But by August 2016, Auckland's lower quartile selling price hit a new all time high of $695,600, a massive increase of $242,300 (53.5%) in three years.

Wage growth lags

However the median income for typical first home buyers in Auckland hasn't increased by nearly as much over the same period, rising from $1489.36 a week (after tax) in August 2013 to $1582.57 in August this year, an increase of just 6.3% over the same period.

That means Auckland's lower quartile house price has increased at 8.5 times the rate at which typical first home buyers' after tax incomes have increased over the last three years, which has inevitably pushed out the timeline for them to save a deposit.

Saving 20% of your net income each week is no easy feat, especially at a time in young people's lives when they are forming lasting personal relationships and perhaps thinking about starting a family, if they haven't already.

Stashing away 20% of their net income is likely to put significant restrictions on their lifestyles, which might be bearable when the prospect of owning your own home is only four or five years away.

But when that stretches out to seven or eight years, the goal of home ownership may seem an impossible dream, or perhaps the type of nightmare where you keep running towards your goal as fast as you can, but it remains forever out of reach.

The social danger in this scenario is that many younger people will just give up on trying to buy their own home and start to organise their finances around the fact that they will be renting for the rest of their lives.

And the figures used in the Home Loan Affordability Report are not for people on low incomes.

They are based on median incomes, and the bottom quartile of house prices.

So it is not just the lowly paid who are being kept out of home ownership by Auckland's inflated house prices and low income growth, it is now middle income earners as well.

Easier outside Auckland

For those first home buyers lucky enough to live outside of Auckland, the problem is not not nearly as bad.

Although regions beyond Auckland have also seen some quite strong growth in lower quartile house prices, particularly over the last 12 months, it has not yet been at a level that has pushed home ownership out of reach for first home buyers on median incomes.

First home buyers in the main centres except Auckland should still be able to save a 20% deposit to buy a lower quartile-priced home within four years.

Saving the deposit for a first home at the REINZ's Lower Quartile selling price August 2013 compared with August 2016
  Auckland Waikato/BoP Wellington Canterbury
Lower quartile dwelling price August 2013 $453,300 $244,800 $303,400 $308,800
Lower quartile dwelling price August 2016 $695,600 $334,200 $361,800 $350,200
Change Aug 2013 - Aug 2016 +$242,300 (53.5%)  +$89,400 (36.5%) +$58,400 (19.3%) +$41,400 (13.4%)
Median weekly wage for typical first home buying couple (after tax) - August 2013 $1489.36 $1374.39 $1523.06 $1461.30
Median weekly wage for typical first home buying couple (after tax) - August 2016 $1582.57 $1478.53 $1613.00 $1587.18
Change +$93.21 (6.3%) +$104.14 (7.6%) +$89.94 (5.9%) +$125.88 (8.6%)
Time needed  to save a 20% deposit August 2013 5.5 years 3.2 years 3.6 years 3.9 years
Time needed to save a 20% deposit August 2016 7.7 years 4 years 3.9 years 3.9 years
Change +2.2 years +0.8 years +0.3 years No change

The full set of Home Loan Affordability Reports for all major centres throughout the country is available here.

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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Do you hear the people sing?
Singing the song of angry men?
It is the music of the people
Who will not be slaves again!
When the beating of your heart
Echoes the beating of the drums
There is a life about to start
When tomorrow comes.

There is no

depression in NEW ZEALAND.
Blam blam blam

If you tolerate this
Your children will be next
Will be next
Will be next


Here's how saving 20% of people's income would play out, the economy would grind to a halt with no-one having any spending money.

No its played out as follows ;-

The bouncer ( RBNZ) stood at the door and told the arriving patrons the party was full of regulars ( property investors , wealthy migrants with access to cheap funding and baby boomers ) , and if they wanted to come in they would need to buy an expensive ticket and need a big slug of cash equal to 20 % of the ticket price upfront and the rest over 30 years

Quite simply those inside have had a hell of a party , those outside who are young, poorer migrants or low income earners are staying there, in the cold.

Those inside continue to party , and increase the tempo by trading with each other ( there is no-one else) and they also know that it cant go on forever .......... so they keep up the prices to exclude those who will eventually get access , they know there are too many of them for the number of seats available

You can blame the RBNZ for this .

No, you can't blame the RBNZ for this.

You have to blame the politicians for the last thirty years as they implemented the Greed is Good paradigm and then watched as a few got very wealthy at everyone else's expense.

A sure sign of success no doubt. [ Insult deleted. Ed]
Don't forget if that rate of price increase continues the time to raise the deposit will also increase so the "event horizon" gets further away 7.7 years becomes 9.9 years in 3 years time and so on. The great Auckland home affordability mirage.


Exactly the 8 years assumes zero price growth in houses.... thanks John Key

If house prices keep rising at anywhere near current rates, they would never save enough for the deposit.
If they started saving that amount 3 years ago they would be $3000 further away from having a 20% deposit now than they were when they started with nothing.

If they keep climbing at ~10% a year for 20 years, with wage inflation of ~2% we'll be looking at a lower quartile-price home costing $4.25 million. Servicing the mortgage will cost around $4200 a week (assuming 5% interest) with a household income of $2300 a week. Assuming you can find the deposit of $850k.

If you save 20% of your weekly income the deposit will take roughly 40 years to save. Hope you youngsters started saving a few decades before you were born.

It's not a bubble folks, all very sustainable. Youngsters just need to cancel sky and stop buying iPhones.

As long as foreigners with wads of money are allowed carte blanche in the market, you are dead right, it will not be a bubble. NOW maybe people who refuse to see the woods for the trees just might get a hint of an idea that it is actually an imperative to do something about that.

How far can the disconnect from fundamentals (cost of shelter - rent) go before even deep pocketed foreign investors get scared? We're already wildly into speculation territory as evidenced by rents being basically stagnant.

This will end VERY badly for New Zealand and it won't just be speculators that suffer. The collateral damage will be huge.

It'll be a while, they are more scared of NOT getting it out and into solid real estate. Any which way suffering is inevitable, it already is for more and more. It's whether you choose to rip the plaster off and get it over with or stretch the agony out.


This calculation while a worthy attempt, doesn't take into account the cost of living, specifically rising rents. It just assumes people can save 20% of their income. The situation, I believe, is even worse than this. Most people, who don't own a house already, won't be able to afford a house in Auckland, full stop. It is an insane and very damaging situation for our country.

what's a typical auckland couple's income?

So the median yearly income for FHB'S in Auckland is $82,309.24 - AFTER tax! If you can't save a deposit on an income like that then you're an idiot and you're not ready for the responsibility of owning a property. The entitlement in Gen Y is disgusting. Borderline mental issues.

I feel that's way too high. Where is this information from?

It's in the yellow table above.

Medium Auckland household income Aug - 16 $89,183 (before tax)

I think if you look at the younger demographic, who are typically first home buyers, you'll find the median household income is significantly lower and it is extremely difficult to save a deposit

Yes, I agree. I am pointing out this is just Auckland FHB who have bought, not median household income.
Median weekly wage for typical first home BUYING couple (AFTER tax) - August 2016 $1582.57
($82,293.64 pa.) pre tax $100,000+

In other news…. first yacht buyers have an income of $3333.33 per week.


@OnwardsUpwards... I don't think calling people idiots is reflective of anyone who in anyway comprehends the situation. Perhaps your projecting... and confusing the perception of others entitlement with your lack of understanding of your white privileges afforded to you?

The income data we use in the report is sourced from Statistics NZ's LEEDS (Linked Employer-Employee Data Survey). Remember the income figures quoted are the combined median after tax income for couples in that age bracket who are both working full time.

Are you a psychologist? Psychiatrist?

Bear in mind that's for a couple, not an individual. So out of that figure youhave to extract living costs for TWO people, not one.

Yes, it's a decent amount, but in relation to house prices and rents, it's not massive.

Thats for a couple you plonker, then minus student loan and rent, transport costs. [Fragment deleted. Keep the insults out of these conversations. Ed.]

And add on working for families, free healthcare, government contributions to kiwisaver, interest free student loans, benefits, etc.

[Fragment deleted. Keep the insults out of these conversations. Ed.]

Are you taking about Boomers or Gen Y?

so not allowed children in your world then until they have saved a deposit.

They can have as many children as they want but why should I subsidize them? I wasnt in the bed with them while they were going at it. Privatise the pleasure, socialise the consequences.

I assume you don't have any children that received a free education? And you either weren't educated (quite possible) or had private schooling?

@OnwardsUpwards, I feel the same about Baby Boomers collecting the pension unconditionally. "It takes 12 people who earn $60k a year to fund a super-annuitant".... I have decades left before I retire. Assuming the retirement age isn't raised before I get there. Why should I as a tax payer in the work force today, have to potentially retire later and likely pay higher taxes in the future because those who retire today expect an unconditional pension? If the generation before me didn't account for the cost to support and sustain this expectation when they were in the workforce, then why should I and everyone else in the generations following them have to fit the bill for their poor planning?

They did meet the expectation. The expectation for them, as it is for you, and as it was for the generation before them, is that they would pay for the generation before them and be paid for by the generation after them.

A presumptuous and simple minded, one dimension view. My expectation is that the generation after me will not be able to afford to pay for unconditional pensions, therefore I have no expectation of being entitled to one.

Aren't you talking about South Canterbury Finance, there?

My parents bought their first house at 20 on a single mechanic's income. Try that now!

Did they buy it in Browns Bay? Or in a cheaper area as FHB'S should do?

Napier as it happens. But you can't do that anywhere in Napier now (or anywhere in NZ I imagine).

My father bought his first house at 27 on an apprentice journalist's income. Not in Brown's Bay, I grant you that. He had to settle for Herne Bay instead.

How about ,28,1 income, 2 kids and 1 on the way, 2 main walk to Brown's Bay beach,180 degree sea views,3bed "cottage" on 700sq m?
Ahhh those were the days...

And I bet they paid in back in about 5 years....those were the days sigh..

I don’t want to be “that” person, but it is (was?) do-able without help from parents, while renting, and with a student loan. Here’s how.

1. Start saving four years ago (conscious decision made by me at the time), first year out of uni, earning 36k per year –income of $1025 per fortnight after student loan, tax, and KiwiSaver deductions). Save 10k.
2. Stay living in my cheap flat paying $125 a week in rent.
3. Stay driving my on-its-last-legs but cheap as hell to maintain and repair 15 year old toyota.
4. Do not go on any holidays.
5. Do not buy an iphone.
6. Get really good at shopping during sales.
7. Get really good at eating cheaply.
8. Dedicate myself to my job.
9. Don’t get pregnant.
10. Get a payrise in year two to 45kpa ($1,200 a fortnight). Save 15k.
11. Repeat steps 2 to 9.
12. Try not to get too depressed as the goal posts continue to move (first a 10%, then 20% deposit required, house prices skyrocketing, income not increasing quickly enough to service the mortgage deposit multiple attempts to secure finance in those first two years etc.
13. Meet now fiance who is still a student (uh-oh).
14. Boyfriend finishes uni in a semi lucrative field and is earning 55kpa (has no savings, but is about to learn how, courtesy of myself)
15. Get a payrise in year three to 60kpa ($1,600 per fortnight). Save 25k and boyfriend saves 10k.
16. Continue to repeat steps 2 to 9, except that boyfriend has moved in and our rent is $80 each per week and we share our 5 bedroom house with 5 others.
17. Get a payrise in year four to 70k ($1800 per fortnight). Save 25k, and boyfriend saves 15. Finally take a holiday and buy a newer car.
18. Raid our respective KiwiSaver accounts – another 45k combined.
19. Don’t listen to the doomsdayers and buy a place in Sunnyvale in March this year, close to the train line for 607k. Deposit of $150,000 (parents gave me 5). Mortgage was 457k, which costs $325 each a week including insurance, rates, power and water. Combined weekly income is now just over $2000 and house related outgoings are $650. Have already paid down most of our 20k revolving credit facility and will refinance at the start of 2017. If things get tough we can get a couple of flatmates.

Not easy but not impossible. Although I guess it is getting harder by the day. But anyone my age (28) could have achieved the same thing. The reason most of my friends haven't is because they spend too much on non-essentials and took OEs. I firmly believe it depends on what your priorities are.

Thanks for sharing your story Sally Jane, it sounds like you have been very disciplined. Can you clarify what type of rate you are on, as $325 per week for a 457k mortgage doesn't compute for me? (And that's even before you include other outgoings such as insurance, rates, power and water).

She said "$325 each per week" - assume that's $650 per week total?

That's $33.8k p.a. or 7.4% of the principal of $457k. Sounds high, if anything.

Regardless, I know what you're saying - this all seems like a great story if it's true... although saving $150k, a nice round number to use for an example?

I have a spreadsheet with the exact figures, but for the purposes of this I rounded all my numbers. Our total at settlement was actually a little over 147k, and the 5k my parents gave me was used partly for lawyers fees and moving costs. But then I got some bond back from my old flat. So I used that to buy a fridge..... I thought I had gone on long enough though lol. Also, I've also rounded the amount I owe the bank in my prev. comment. If it adds credence to my story, at this moment, I have $15,367.22 available in the revolving credit account.

Yes sure. 437k is fixed at 4.39% for one year. That's $1010 per fortnight ($252.50 EACH per week). The 20k balance is floating but has a discount of 0.7 (I think making it just under 5%). But like I said, that is nearly all paid off. So the total that I owe the bank is 442k (with 15k available on the revolving credit). As I said, we each put $325 into the house account each week (so $1300 goes in per fortnight, and $1010 comes out in repayments). The rest ($420ish per month) covers most of the bills, rates, insurance.

You GenYers are so lazy. That is much easier than when my parents bought their first house at 20 on a single mechanic's income. They had to eat mince on toast for a year I'm told...

Of course you could have gone to a different country, got paid more, done plenty of holidaying, and bought a house for a quarter of the price. But as long as its possible all is well I guess...

Yes of course.... and anyone is welcome to do that...? I could have done that. Hell some of my friends are doing that - making the move to Brisbane, Wellington etc. But I like Auckland. I wanted to buy a house here, so I did. I just thought some of the commentators might like to see how it can be done (and it included mince on toast for a heck of a lot longer than a year....).

Frankly, whilst I applaud your commitment, I don't think this is a kiwi way of living at all.

Whilst our parents didn't go on overseas holidays or OE's to the same extent, they had a lifestyle that still afforded them hobbies (boating, fishing etc) and free time.

Then I read articles today that we should aspire to be more like new Chinese migrants - what? This is going to be an unapologetic generalisation, but be home-bodies all day, have no real interests aside from consumerism, work 6+ days a week?... Is that what Kiwi living for Gen-Y onward is expected to be? Certainly seems to be how you have chosen to fill your time, and it won't stop now that you have that stub of debt to service. Congratulations? Really?

I have a house as well, so I'm fine, but that "lifestyle" is exactly the reason why I left London to come back. Being a mortgage slave is not what I want my kids to be and I don't want them spending their entire lives fixated on home deposits / mortgage servicing. How grim.


Very grim indeed. She lives an extremely frugal life, not in order to buy a house (she doesn't own it quite yet) but in order to attain a large debt. Is this the plan, then, for all of New Zealand? Live as a communal flatmate paying for a single room for years, scrimping what you can and spending next to nothing in the economy at large just so that you can afford a mountain of debt and then continue on to live on the edge of catastrophe? No mention of children in this story. No matter, we can simply replace the children she didn't have with foreigners.

The more traditional forms of family formation have been utterly crushed by debt and more debt. The people who can afford families now are those with no scruples and the very wealthy.


The mortgage costs less per week than renting a similar house. Quite frankly, I don't consider it a mountain of debt at all. It's a means to achieving my goal of financial stability. I couldn't afford kids if I were renting, so home ownership in this case does not make me worse off. HOWEVER, the difference is that I see no reason why the loan it can't be paid off in 10-12 years. Well before I'm 40 in any event. I suspect we are lucky because we both have the potential to earn quite good incomes, but that was not the case during the time I saved the deposit and when we bought, we were just over the median as per the table in this article.

PS, flatmates are great! Living with others has never been a negative or even remotely hard work at all. Maybe it's a generational thing?

I'm not sure I understand your comment. I am certainly not a "home body." Why does being frugal mean that I don't have hobbies? I play netball, do a lot of tramping, run the occasional marathon, and my fiance and I have a small boat that we take fishing every other weekend or so. We also have a long standing monthly pot luck get together with our friends. I buy everything for myself that I could possibly need and always have. I just don't need the latest this or that to be happy. Trademe is a literal goldmine for the budget conscious.

Well done Sally. There are many critics here.

I don't recall talking about your hobbies or social life, Sally. Frugality implies that anything you do is cheap.

I suppose it is your business if you do not consider several hundred thousands dollars a very considerable debt for a young couple, but it's not really all about you, Sally. Housing is linked to the larger picture of family formation, the strength of the local community, and further on the character of the city and polity depend upon these factors. And if it is a matter of good luck that a hard working couple should reach their mid thirties, manage to be "debt free" in their own home, and yet still remain childless, then we are in really bad shape as a society.

I was replying to the comment above yours, which quite literally used the terms "home body" and "no real interests aside from consumerism, work 6+ days a week...." and then stated that it is how I seem to have chosen to fill my time and will have to continue to do so for the foreseeable future due to the debt I now have to service. I was trying to point out that that is not that case for myself, because you don't actually need a considerable amount of money to have fun or have a life.

However, I totally understand what you are saying about the importance of housing and it's connection to society as a whole. From my perspective though, no one was doing anything about it other than a lot of hand wringing and in fact outright denial from our government that we even have have a problem. Is that right? No. Is that what is best for our society? No. But that is how it is, my peers certainly don't seem to care enough to get up in arms about it. So I have chosen the path that I think gives me the best chance of financial freedom based on how things are right now, and the reason I set out how I went about achieving that in such great detail is because there seem to be a lot of people on here who think it is impossible to achieve without family support on moderate income/s. Although, for those that are only just starting now, perhaps it is. Doesn't mean they shouldn't try though.

Ah the good old days when you could eat mince for a year and with the left over money get a deposit on a house. Going by Greg's Big Mac index thread the other day - 1995 inner Auckland suburbs $220,000/$2.95 = 75,000 hamburgers. Say today $1.1 million/$6.00 = 185,000 grease burgers. That is a substantial mince differential. Though in 1995 you were paying 9% interest on your student loan.

I have done similar, but I think they key to note is the payrise steps.

Yr 1 = 36k
Yr 2 = 45k (25% increase)
Yr 3 = 60k (33% increase)
Yr 4 = 70k (16% increase)

That is some great going, far exceeds average increases, especially for the last few years.

As you mentioned it is definitely possible, but it must be an all consuming endeavor, and generally involves a couple.

Personally I don't think it should require two people slaving away just to save a deposit, and just because it is possible doesn't mean it is right.

One must also remember, that when you look back, you want to have lived, not just survived.

Yes there is no doubt that I am lucky with my income. But I have to say, it was the despair at finishing five years of uni with a 50k student loan and the only job I could find paying 36k a year that really gave me the kick in the pants needed to try my absolute hardest to set myself up financially. Whist I work very hard (five days a week, and no more), I am however not so naive as to think that luck had nothing to do with the payrises.

As I've said elsewhere, I wouldn't necessarily consider what I've done as being "just surviving." I have a huge social circle and a lot of fun in my spare time. It's just that I have learnt to do it on the cheap, which is really not that difficult to do once you get used to the idea. And I always buy the things I really want.

How about Children, is that in the plan, or will you have to put off for at least five years to get on top of the mortgage.
I grew up in a different era when it was not a choice but people could afford both a house and children

Good question. As I said up above, for my fiance to be renting our own place in Auckland, it would cost at least, if not more than what we are paying in mortgage repayments. So, we couldn't afford kids right now if we were renting, and home ownership in this case does not make us worse off. The difference of course is that we plan to have the loan paid off in 10-12 years, following which we will be well set financially. Obviously mid to late 30s is later than I might have liked to have kids but I figure my generation's life expectancy is at least 10 years greater than that of our parents, so having kids later is not the end of the world. Obviously the ideal situation for everyone would be that houses were affordable, and most people could afford to have a home and family and not be on the bones of their arse as you say it was when you grew up, but that is not the way things are now, so I've chosen the path that I think gives me the best chance of financial freedom based on how things are now. If house prices come back down, it won't affect me, it's not like I plan to move any time soon :)

Thanks for the answer, it just makes me sad and mad that we have screwed up our country for our young that they now do not have the advantages that we had, and that it will only get worse even for those behind yourself

Maybe you have, maybe you haven't. Life is swings and roundabouts, and just because that is how it is now, doesn't mean that is how it always will be. I think people loose sight of that actually. Hell, my children will have every chance of living a healthy life well past 100. The world is changing big time... I wonder if in 25 years we will even need to conduct business from CBDs, or if we won't all work remotely. There are always opportunities out there, and if people focus too much on one thing, they run the very real risk of missing the other opportunities that invariably present themselves. But with housing, in Auckland, something has to change. Or else we will have a city devoid of teachers, nurses, police officers and other professions that wont' be earning enough to survive. It won't happen overnight, but give it time and there will be an exodus.

Wan't implying you were lucky. I say good on you, luck comes to those who make it. I just don't think it should be that hard.

Me and my wife knuckled down and knocked the mortgage off in 5 years although granted ours was half the amount.

So keep up the good work.

I don't think calling people idiots is reflective of anyone who in anyway comprehends the situation. Perhaps your projecting... and confusing the perception of others entitlement with your lack of understanding of your white privileges afforded to you?

Maybe Gen Y have awoken to the fact they don't want to be brainwashed clones of their parents or grandparents. Maybe they realise that life is about experiences and not being slaves to the banking cartels. Why shouldn't they be able to follow their own path without the likes of you beating down on them. Maybe they choose to be free instead of institutionalised by the economic/wealth dogma. Maybe you could look in the mirror first at your own ignorance before accusing others of having borderline mental issues.

And they're very welcome to follow that path if they wish. But not at my expense

I think we can all agree that OnwardsUpwards comment is saturated with irony.

Well, this just cried out for musical accompaniment, Greg.

Really? A couple clearing 80k a year, poor? Let me dust of my copy of Das Kapital, slip in my skinny jeans and head down to Cuba mall and complain about the man to some other down and out loser. Geeeees. Gen Y get a grip.

Take out the student loan repayment and their take home pay drops to around $38500 each per year. Try living in Auckland on that wage and saving a deposit for a house not 2 hours away? Also how was that free education Onwards...but I;m doubting you took it up with those comments.

@OnwardsUpwards... I respect your entitlement to an opinion, I also acknowledge my right to assess your opinion as having zero value. Facts matter, opinions don't :)

You are painfully disconnected from reality.

Ahh yeah, that's sort of the point of the article. That the house prices are high and increasing so fast that even good incomes and savings ethics can't afford a deposit or house. Not sure why you find that so hard to grasp.


There should be no tax incentives at all to buy existing properties for rentals.. All the present system means is that other people (mainly renters) are subsidizing landlords so they can enjoy their retirement.
We will reap the rewards with unpleasant consequences if the present unequal system prevails.
Politics and self interest seem more important than worrying about our future generations and the social problems that go with it.
I am comfortable and 70 but I despair at the housing policies and immigration of this Government.

Yes ITSME I agree. But perhaps note that there would be no tax-subsidy from negative gearing if banks confined themselves to lending to “investors” only the debt that can be supported by the property’s rental yield. At a rental yield of 4.5%, a responsible institution would not lend at a loan-to-value (LVR) of more than about 40%.
Nevertheless banks have not been lending responsibly and hence the need for an LVR limit being imposed on banks and investors by the Reserve Bank.
Unfortunately, the current LVR limit applicable to “investors” is still too high at 60% to eliminate the tax-subsidy from negative gearing by investors.

So why don't people move out of Auckland where-
- there's more jobs (8 of 11 regions have LOWER unemployment than Auckland)
- lower crime
- hours and hours of extra time every week, saved in commuting
- houses (on average) are just 1/3rd the price of Auckland.
- a massive increase in quality of life because you have tens of thousands of dollars every year that you can spend on other things rather than on your mortgage.

I guess because they like Auckland and/or they like their family and friends.
Although a lot are moving

I would quite happily if I could find a job. Thats where this, “just move out of Auckland”, mantra falls apart. I have spent 6 years at uni to not get paid very well but its better than working at McDonalds, which is what Id end up doing if I moved to a small town where I could afford a house.

As I pointed out, 8 out of 11 regions have LOWER unemployment than Auckland.

Companies in the South have been complaining for years that there's not enough skilled staff., across all sorts of sectors.

The IT sector in Dunedin is bringing in people from overseas as fast as they can. May have something to do with the fact that the average internet speed across the city is 300% faster than Auckland (and the commute times are about 600% faster).

Not to mention you can buy a good house, and a holiday property, and a new car, and a boat and an overseas holiday, and have significant retirement savings, all for LESS than an average Auckland house.

When you factor in mortgage or rents costs, pretty much everywhere in NZ has higher average take home pay than Auckland.

All well and good but I am not in the IT sector and I can tell you after a year of looking I have not been able to find work in Dunedin, a city I would love to move too.

Maybe it is easier in some sectors but it certianly is not in my field of work nor is it for friends of mine who have also been planning a move to the south island

Also, thats the danger when people limit themselves on "thats my only career" or " thats my uni degree". People will expect to change career 2-3 time in their life time in the future.
The jobs are there in other main centres, people just don't want to do them because there are too cool for those jobs thats are paying $20K less than their current job.
Hold on to the "good job" in Auckland and potentially costing you more in the long run. (Money, time and family)

To be fair, you do have a point and its something i have been thinking about. There are a couple of issues though: It is my career and I enjoy what I do; being skilled in a particular area generally means more job security; I may have paid a large amount of money for my education but so did the tax payer, is it best for the country to train and educate people only so they are unable to use those skills/education?

I dont mean to personalise this to such an extent but I do so because many will be in a similar situation to me.

"So why don't people move out of Auckland where-"
Great, another move to the regions rant. I live in Taranaki, and I looked outside and can't see rainbows and little pots of gold anywhere.

"- there's more jobs (8 of 11 regions have LOWER unemployment than Auckland)"
unemployment doesn't mean anything, available jobs is the important thing. You can have 100% employment in a town, but if there are no available jobs you can't move there.
Regions also tend to have less diverse industry, even a small downturn and poof, all the jobs are gone.
Just take a look at Seek
All of Taranaki = 11 jobs listed today or approx 1 job per 10,000 people
Auckland = 400+ jobs listed today or approx 1 job for every 4,000 people
I know where I have a better chance of getting work.

"- lower crime"
Depends on the region, even suburb, and the reduction is not always proportional to the reduction in population.

"- hours and hours of extra time every week, saved in commuting"
You assume a lot here, yes some commutes are quicker, but some longer. Regions tend not to have nice big CBDs with lots of jobs, you might get a job in one small town, your partner in the other. Commuting an hour each way covering 60-70km isn't all that fun - not to mention the petrol costs.

"- houses (on average) are just 1/3rd the price of Auckland."
Price relative to income matters. Wages are also less (there are exceptions). But less overall jobs removes flexibility. You may not be able to hop around to a higher paying one. Also as mentioned you are more prone to downturns and No job = no income = no house.

"- a massive increase in quality of life because you have tens of thousands of dollars every year that you can spend on other things rather than on your mortgage."
You mean a massive decrease in life, as you have no friends or family, less schooling options, reduced health care/quality, no events/concerts/sports/attractions, inflated airfares to go anywhere, higher utility costs, poor housing stock/quality/availability, less retail options along with higher prices on a lot of things, and don't forget the limited career opportunity/development.

If the regions were indeed heaven, then I am pretty sure everyone would already there. Yes they offer some benefits, but to think anyone struggling should just move here is pure idiocy.

Not to mention that where property prices go, the regions feel the effects of an upturn last and the effects of a downturn first, making it even more precarious as that applies to both jobs AND property prices, leaving people more at risk of being stranded and also less able to switch professions.

Sounds like you want to find every reason to fail, Nocents.

1/ Taranaki has often come up as the region with high paying jobs - sometimes the highest.

2/ For years business surveys in many regions have shown 65% of companies have skill shortages they cant fill.

You can only find find 11 jobs in Taranaki on Seek. How hard are you looking? In half a minute I found 187.

3/ Crime. In Auckland there is 88 car thefts per 10,000 people. In the south there are 15.

So Auckland is nearly 600% higher for that crime. That's not a small difference.

4/ Commuting. You are being ridiculous. Of course someone living 80km out of the city might have the same commute time as the average Aucklander.

5/ Your jobs argument fails - again. There are a higher percentage of people without jobs in Auckland, than in 8 out of 11 regions.

6/ Your schooling options argument is utter nonsense. There are great schools all over NZ, and unlike Auckland, you often don't have to move to a rediculously overpriced house to be in the right zone.

Our local high school has the second top accademic results of any public school in the country, yet it's zone includes the very poorest suburbs of the city.

It's laughable you talk about poor housing stock, when you can buy a mansion, for the price of a dump in Auckland. Concerts? The regions have have Fleetwood Mac, Elton John, are getting Springsteen etc.

Utility costs are another nonsense. We have cheaper rates, cheaper insurance, and cheaper power than Auckland - and use less fuel in our commuting. And if you include rent and mortgage costs, then your comment is insane.

The reason more people don't move is because of misinformed and ignorant opinions of the regions, as you've just shown. However in my experience, anyone with an overwhelming negativity attitude usually has problems where ever they live.

1. Those 11 jobs were listed for one day. There are 187 going back a month or so.

If it helps there were about 33 jobs listed since monday in Taranaki, and approximately 3,500 in Auckland for the same period.

Taranaki did have high paying jobs then Dairy and Oil and Gas collapsed. Taranaki is also one region. How does Auckland compare to West Coast? Gisborne? Wairarapa? North Canterbury? Southland?

2. Show me all these wonderful jobs in the regions? What skills are they looking for? Farming/retail managers? - fat lot of good that is for an out of work accountant, analyst, executive, factory worker, events planner....

3. Crime - As I said it all depends on where you live now and where you move to.

4. It's not ridiculous for commuting. I know people travel NP to Hawera on a daily basis. Stratford to NP, jobs in regions are not focused in one compact area. So you aren't sitting in traffic for an hour, you are actually driving - end result the same except more petrol is used up in the regions.

5. Refer 1 and 2. The regions simply don't have the range of work to suit the bulk of people. To argue otherwise is just idiotic.

6. There are some great schools, but again - depends on the region. Great schools also don't mean there is a job waiting for you (and/or your partner). Also, show me the Universities in Napier? New Plymouth? Queenstown? Westport? Nelson? Taupo?....

Utility costs? I suggest you go do some pricing, Wellington has Cheaper rates than New Plymouth, also cheaper power. Insurance? That is going to be highly subjective to your individual property so not comparable. Petrol? Again go check your costs. Short of a Gull, most regions have higher petrol costs than the big centres.

So the regions have events? You have listed 3 events that span multiple years although I could add that NP has WOMAD.
- Where were Foo Fighters? U2? Guns 'n' roses? AC/DC? Iron Maiden? Black Sabbath? or the other hundreds of events Auckland had over the same period?
- Sport. New Plymouth = one ABs match every other year, a single super rugby match each season (if they are lucky), one NRL match period, no international Cricket, Tennis, Golf, Motorsport, Yachting, etc... Some other regions get even less again.

You also didn't address family, friends, healthcare.... but hey, those things on't matter do they.

"The reason more people don't move is because of misinformed and ignorant opinions of the regions, as you've just shown. However in my experience, anyone with an overwhelming negativity attitude usually has problems where ever they live."

I am not trying to be negative about the regions - I am merely pointing out that it is idiotic to blindly say everyone should move to the regions as they will get a better job a cheaper house, and be happier. Everyone places emphasis on different things. The regions will suit some, but not the majority.

there's another problem with the regions, and indeed the bigger cities outside Auckland. They tend to be full of backward, insular, overly parochial and often prejudiced people. Of course that is a generalisation, but from my experience that is largely true.
For the most part, in Auckland people don't care where you've come from, or what your race or religion is. There is a generally open minded view of the world and ideas, and people just get on with their own business.
For me, Auckland is the only place in NZ that is remotely approaching being an open 21st century place. I'd say even Auckland is lagging 10 years behind much of the world, but at least it's not 20-30 years

I think rather than a generalisation it's a "gross generalisation".

You'll find racist bigoted people everywhere, if you look for them.

Dunedin specifically asked to have Syrian refugees settled here, and have welcomed them with houses, jobs, computers, free bus travel, free driving lessons, etc. By all accounts the city is doing far better at settling and supporting refugees that those who are dumped in Auckland who will never get their heads above water cause they're paying ridiculous rents..

If high crime, lack of community, being a slave to Australian Banks, and spending half your life in a traffic jam are a sign of being modern "21st century place", you can keep it.

To me that's more like the dark ages. To me it's better owning you own home, a holiday place, spending a month overseas every year, and having enough retirement savings a decade or two before you retire - all on average wages.

As a big city kid in a region now. I wouldn't say "backwards" or "prejudiced", at least not anymore than anywhere else I have ever lived.

"Insular" and "overly parochial" however is something that in my experience is very true. It can be very hard (if not impossible) to convince the locals that things can be different, or heaven forbid better elsewhere.

But, to be honest, even in the big cities you can see it across suburban boundaries. I've definitely seen the screwed up faces on Aucklanders/Wellingtonians if you mention certain suburbs/schools etc...

You say it's idiotic to say people will get a cheaper house in the regions? (where houses are on average 70% below Auckland prices).

And I didn't say you'd get a better job. The point is you don't need a better job. Our income could be $50,000 more in Auckland, and we still couldn't have anything like the lifestyle we have here.

Oh and locally we did get Black Sabbath, and Aerosmith, and Neil Diamond, and Rod Stewart. I'm off to Sharon O'Neil, Hammond Gamble etc tonight.

Nearby in Central Otago we've had Pat Benetar, America, Chicago, Huey Lewis, REO Speedwagon, Melissa Ethereidge, Doobie Brothers, Foreigner, Heart., Crredence Clearwater, Dr Hook, Little River Band, Lynard Skynard, 10cc and a long list of others, none of which as far as I'm aware, played any concerts in Auckland.

The argument is between Auckland, and the regions, so your comparisons of rates between Wellington and Taranaki is totally irrelevant.

And 5c a litre cheaper petrol isn't going to make a the differnece between 2 hours a day average commute in Auckland, compared to less than quarter that elsewhere.

If you think it's better to live life as a wage slave to the banks or landlords, and have a misserable life struggling to get ahead in Auckland, then that's great.

In comparison, I can live like a king in the regions with no financial worries, spending a month every year overseas and looking forward to early retirement.

Did I mention that was on an average wage?

You have pretty much missed every point as most of your arguments are based on personal preference. You clearly like the lifestyle you have.

Can I ask, are there many jobs where you are?
Could I come down tomorrow, pick up a job with a decent (at least average) wage?
oh it would be good if it fit in with my qualifications and previous experience?
Can you also guarantee my wife a job with similar pay?
Will I be able to swap jobs after 4-5 years? to pick up more money if I have a kid and my wife stops working.
Can I rent somewhere nice near work while I look for a place?
Can my friends and family come too? There are heaps of jobs for them as well right?

My guess is no, I just checked "rest of Otago" i.e. excludes queenstown/wanaka and dunedin.

A quick sample of the 17 jobs listed so far this week.
Travel agent
A bunch of KFC Team members
Receptionist at a hotel
Pizza driver

Not exactly inspiring.

"In comparison, I can live like a king in the regions with no financial worries, spending a month every year overseas and looking forward to early retirement.

Did I mention that was on an average wage?"

Again, I am not saying YOU aren't having a great time. Although I think living like a King on average wage may need a bit more proof than just a statement, as most other people I know in the regions would definitely not be claiming that.

Regardless, what I am saying is not everyone will have the same experience - certainly not the majority of people.

ps - hope your retirement goes well, you don't want to be having to trek halfway across the country to a hospital a few times a week.

Nocents asks "Can I ask, are there many jobs where you are?"


Nocents asks "Could I come down tomorrow, pick up a job with a decent (at least average) wage?"

If you have skills, and/ or a good attitude, yes.

Nocents asks "Can you also guarantee my wife a job with similar pay?"

You are asking for the impossible - no one anywhere gives out good jobs when they know nothing about the skills and experience of the person. But again if she has good a skills and attitude, she'll get a job.

Nocents asks "Can I rent somewhere nice near work while I look for a place?"

Almost certainly.

Nocents asks "Can my friends and family come too? There are heaps of jobs for them as well right?"

Pretty much the whole South Island has been screaming out for workers for several years. Unemployment is under 4%.

Again, you find 17 Otago jobs, I find over 300 just in Dunedin alone.

Nocents says "Although I think living like a King on average wage may need a bit more proof than just a statement, as most other people I know in the regions would definitely not be claiming that."

With much lower house prices than Auckland, we paid off our house in a few years, and resisted the temptation to go to a bigger one.

Instead with no mortgage to pay, it's been easy to live off one wage, and save the other one, so we've had a spare $50,000 to do something with, each year, for 15 years.

Nocents says "ps - hope your retirement goes well, you don't want to be having to trek halfway across the country to a hospital a few times a week."

It's Dunedin - few people are more than 10 minutes from the hospital.

You're right - not everyone will have the same experience. I'm just saying with wise decisions, you can live like a king on an average wage.

Our Auckland friends earn significantly more than us but can't afford anything like the lifestyle we have. If they had average wages they'd drowning in debt.

As per below, you have done well in Dunedin, I had the same deal going in New Plymouth.

I am mid 30s. My wife and I had a nice combined income when we moved to New Plymouth, and are mortgage free, with savings/investments after 8 years here.

But we still have costs (kids, rates, insurance, food, etc....) and the savings/investments wont allow us to retire just yet. We have eaten away a fair bit of them, as neither of us have had a permanent job over the last 3 years. We have hung on hoping things will pick up, but with job market well and truly dry now, we have no choice but to move.

Our house has increased in value substantially. But relative to the big cities it has gone up by less. So moving out, will not be as easy as moving in.

Thankfully we are still in a better position than most, so will survive just fine.

But, it is this sort of thing that people need to understand, you may get a job (and it may be a great job) in the regions, but if you lose it, there aren't many more to fall back on. For those closer to retirement, it may be an option. But for the bulk of FHB in Auckland, the regions are not the pot of gold at the end of the rainbow.

I've been talking about moving to the regions - i.e. anywhere outside of Auckland incluing the provincial cities.

Are you perhaps talking about the rural countryside i.e. places outside of provincial towns and cities?

I am talking about regions as in the areas that are not the major cities in NZ (i.e. the big 5 of Auckland, Hamilton, Wellington, Chch, Dunedin, Tauranga)

For my posts I am therefore referring to areas such as Gisborne/east coast, Hawkes Bay, Taranaki, Northland, Southland, Coromandel, West Coast, Malborough, Nelson, Wairarapa, etc... including any of the cities, towns, or rural places in those areas.

Could someone move from Auckland to another Major city? Yes, But I don't think that was the intent of the original post.

I have seen that many posts on Interest (and elsewhere), about moving to the Provinces, Regions, Countryside, towns, etc... with the blind assumption that there are jobs for everyone and that just because houses are cheap you will prosper.

Comparing New Plymouth (9th biggest city in NZ) with any of the Big 5 is ludicrous, let alone some of the smaller provincial towns. The jobs just aren't available here to sustain long term employment.
- Auckland has 16x the population of Taranaki, yet has 36x the number of jobs available.
- Dunedin has the same population as Taranaki, yet has 3x the number of jobs available

Yes you can get a cheaper house in NP relative to Auckland, but do you have income security (i.e. a job) for the 20 years required to pay off the mortgage? Some people do, the majority do not - and that is why throughout history people have gravitated to larger cities where there is more opportunity.

Even ignoring the job market, as mentioned in my original post you have a range of other factors as to why people can't/wont move, such as Family, lifestyle, and health.

Blanket statements telling people to "move to the regions" for a better life are about as helpful as saying "win lotto". It will work for a select few, but not the majority.


I warned everyone about this last year (and previously ) on this forum !!!!!

I was highly critical of the RBNZ approach in this matter , pointing out it would never have the intended effect , and I referred to unintended consequences in interfering with the free market system and attempts to dampen demand in the face of massive odds

I pointed out that the 20% deposit would simply lock out ALL young homeowners who did not have wealthy parents and ALL low income earners .

That's exactly what has happened , and unlike the so called brains trust at RBNZ , I am not a rocket scientist , a surgeon , or an economist .

We are left with the impression that the RBNZ is nothing but an august body................ of clueless fools.

I pointed out that with this large block of buyers now excluded , the market was now wide open for speculators and wealthy property investors to have a field day

And thats exactly what has now happened , the speculators and all manner of chancers have piled into this ponzi scheme , and now we await the fallout ... and its coming .

That's the only thing good to come of the LTVR , that the RBNZ may have saved some people from themselves by deliberately excluding them from the party .


Exactly, I also see this as the best thing it could have happened to young people to prevent them from joining a ponzi scheme that will end in tears.

20% or 30% or 5% - nothing will help FHB till govrrnment comes out of denial mode and do something to tax speculators and non resident buyer.

If the average median id 1 million and even if bank gives me loan on 10% deposit - how many can servise $900000 loan. So it is IMPORTANT that givernment acts and not blame RBNZ.

Now you see all the article critisizing RBNZ but why blame them and not John Key and his policies. Flood of article and news about afgordability and concern for FHB - it is all a farce to put pressure on RBNZ for the new rule and also home to income which is in pipeline as that all will also effect speculators and they need FHB to make money. If geniunely concern aboug FHB - expose government bluff on overseas buyer.

No PM in our history has ever controlled house prices.

You must think Key is some sort of god if you think he can.

Taxes and foreign buying bans have failed elsewhere, when facing the unstoppable tide of low interest rates.

Low interest rates not only mean that people can afford TWICE mortgage they used to have.

It also means millions - actually make that tens of Billions - that were in bank deposits, are now looking for a new home.


No PM maybe....but maybe future Presidents their own Interest of course..

Maybe should have controlled their urges.

Maybe we are all in same boat.


Is the point of a Government not to govern, with sound policy? Isn't this exactly what we would expect of the current government, to mitigate and address what's happening to the affordability of housing? So are you saying no Government in New Zealand's history has ever implemented sound policy? You must have a very short memory if so.

John Key is not a God, he is however 100% accountable for a government to deliver of sound policies to support and improve the social and financial wellbeing of the citizens of New Zealand. In this context, in my mind, he's failed, EPICALLY. Get rid of him.


Hey PhotoNz, Taxes on foreigners at the very least gets govt revenue to pay for the infrastructure needed to squeeze them in.

House prices affect? Well JK has all the info and last week he pooed his pants at the effect a foreigners sales tax would have on house prices. Hard to believe I know as there are only a couple or maybe 3 of them "at the end of the day". Someone is telling porkies again - does it come with the job or is he just good at it?

You're obviously fixated on JK and foreigners, while ignoring the juggernaut that has just run you over

(in the form of a few million Kiwis who can afford to pay hundreds of thousands more for a house than they could ten years ago, because of low interest rates).

I am not blaming the RBNZ, it was a good move by RBNZ to separate LVR limits between investors and owner occupiers. Investors account for 40% of the credit flow being poured into existing housing. If the LVR limit is lowered to an appropriate level (less than 40%), then the FHB's might begin to enjoy a level playing field. The current 60% limit is still far too high.

Forget non resident buyers
Focus instead on FOREIGN buyers ie foreign students, temp visa workers + offshore

While we're at it, why don't we run some analysis and identify how many buyers are New Zealand citizens belonging to the boomer generation purchasing their 2nd, 3rd 4th or nth house, a handful of years out from retirement?

That unconditional pension and zero superannuation savings is not going to fund several international holidays a year, a new SUV and the latest membership fees to the local golf/yacht club....

[personal insult deleted. Ed]

Just a thought.

Is the government not doing insult by having policies to favour speculators and non resident buyers instead of supporting average kiwi.

What is insult is, when Bill English says that growing house price is a good problem and john Key says that it is a sign of prosperity.

It shows the mindset of the government, so what else can you expect from them.

To me that is insult to the average people of New Zealand.

And in Christchurch, it's possible to get a brand-spanking-new house and plot for $399-425K. search in Lincoln or Faringdon

Stonewood, price point < $450K

Horncastle price filter $350-450K

In the august words of Gandalf the Grey, 'Fly, you fools!'


Wow, if this thread is anything to go by, especially considering the site it is on, this could really get nasty if some fast solutions are not implemented. My vote is getting foreigners out of the market as a starter.

PA I have news for you, for FHBs and middle income earners housing is nastier than nasty already and more nastier than 2007 when JK said it was nasty.

I am seeing it in my daughter and her husband, mild mannered, very conscious and mindful people, he on what would be considered a very high salary, constantly being outbid in their search. And they are not even trying to buy in Auckland, they are trying to make exit plans. The put in a tender on a property recently, their's was second best, they got beaten by $50,000. Fifty bloody thousand! It is insane!

Oh and to anyone wanting to accuse them of being cheapskates, the next tender below theirs was ANOTHER $50k less!


John Key and his incompetent Minister Nick Smith will not do anything to control house prices as there are too many of their supporters making big money from house price inflation.
If National starts to tank in the polls and if it looks like they may loose next years election, then and only then will something meaningful be done.

Great reports Greg. Maybe you need to change the calculation procedure for Auckland? You can get away with a 10% deposit if you buy a house under $600k and have 3 years of KiwiSaver contributions. Admittedly it won't be a very nice house, but it does seem like a more sensible approach (assuming buying a house in Auckland was sensible).

Currently own 3/5ths of bugger all and a house is not a requirement. But I've two kids, the youngest of five, who have both bought $1/2m houses at 25 in the last two years. Their household income is a bit higher than average but no need for parental monetary support, so I guess it's possible. What a big sucker of a mortgage. Note neither consider it an "investment" , for them it's a house to live in and enjoy.

Agree. People need to stop wasting their time in Auckland. It is your "time" which you will never get back and you are wasting every single day struggling..complaining. You are fighting something that you will never win yet miss out on other opportunities and potentially a better quality life.
One day when you look back 30 years in your life you will regret, because Auckland has officially became a "prison" for a lot of people and they don't even realise.


Kind of weird how people think that everyone has to have a student loan these days. I would argue that there are plenty of great paying jobs you can get without going to University and doing some complete waste of time degree that you end up working in MacDonalds to pay off. Never went to University here, AIT as it was known part time was enough and you can do this WHILE WORKING 40hrs a week but its tough. Still back then it was normal to work 40hours and then do 12 hours study to like 8:30pm at night on top of that. Plenty of plumbers and carpenters getting paid more than me these days.

You would be surprised how many average paying or worse jobs still list a degree as a minimum requirement.

It's a quick easy HR way of weeding out half the applicants.

Excellent article Greg.

8 years to save a 20% deposit.... Depressing

You need to ask yourself who is paying these sky high prices... Investors and foreign buyers. Want to end this madness Vancouver tax them.

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