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Auckland blues left behind

Auckland’s population is declining for the first time, and southern employers are scooping up those hunting for more affordable homes. Amanda Cropp reports.

Shifting from Auckland to Christchurch was a no-brainer for Royden Burt, who saved at least $700,000 on buying a four-bedroom house. Leaving the City of Sails meant giving up boating, but he has invested in a ski season pass for Mt Hutt, taken up 4-wheel driving in the Canterbury high country, and getting to work takes eight minutes compared to his former hourlong train commute.

Auckland recorded a net population decline for the first time over the year to June, and Burt is one of 13,500 Aucklanders who moved to other parts of the country.

Although Statistics NZ cannot tell us where they went, Dot Loves Data director Justin Lester says anecdotal evidence of ‘‘southern drift’’ driven by housing affordability is backed up by analysis of eftpos spending and other commercial data sources.

Those making a permanent move to Christchurch over the past year were predominantly from Auckland (34 per cent), followed by Wellington (14 per cent) and Tauranga (5 per cent).

‘‘Another 16 per cent came from Queenstown, Wanaka and Central Otago, all areas where house prices have exploded over the last 18 months.’’

Auckland’s natural population increase (births minus deaths) helped offset losses from international and internal migration, but Stats NZ population estimates projections manager Hamish Slack says the 1300 population decrease in the Auckland region was still a significant change.

Queenstown-based economist Benje Patterson has analysed internal migration, and he warns that with the border closure slowing overseas migrants to a trickle, Auckland will face worsening skills shortages if an increasing number of those in the peak years of their working lives continue to leave.

He believes a combination of push and pull factors are driving the exodus and does not expect a change any time soon.

On the push side, house prices are key, and on the pull side, Covid-19 has forced many people to take a hard look at their lifestyle.

Clearly some Aucklanders suffering lockdown fatigue and never-ending traffic woes don’t like what they see. ‘‘The allure of the good life is what pulls people into the regions.’’

Burt, the licensing and procurement director for tech company Inde, transferred to Inde’s Christchurch office in February after a trial stint in early 2020.

‘‘I came down for a month dog-sitting for some friends to explore and get a feel for if I wanted to move here and decided pretty much on the spot, this is for me.’’

The 29-year-old shares his Broomfield home with partner Georgia Norman, a legal secretary who had no trouble getting a job in Christchurch, and they have two flatmates.

Taking into account rental income, rates and mortgage payments, Burt calculates he is $500 a month better off than in Auckland.

Trade Me figures from October showed a 46 per cent increase in the number of Aucklanders and a 71 per cent increase in Wellingtonians searching for property in Christchurch, compared to the equivalent time last year.

The perception that you get more bang for your buck down south is born out by the figures, even though Christchurch prices have jumped 35.5 per cent over the last year, according to CoreLogic. It says the upward trend is also evident in neighbouring Selwyn and Waimakariri districts. The average house in Christchurch is now valued at $719,000, and in Selwyn at $812,000, which is still well below the average value of $1.4 million in Auckland, and $1.1m in Wellington and Tauranga. Affordability is based on the ratio of income to house prices, essentially how much of a person’s income is needed to pay the mortgage. Economic development agency ChristchurchNZ senior economist Jorge Chang Urrea says that of all 13 cities in the September quarter, Christchurch’s housing affordability ratio of 6.3 was beaten only by Invercargill (5.3), and it was well ahead of Tauranga (11.4), Auckland (9.7), Napier (9.7) and Wellington (8.1).

In Canterbury, paying the mortgage took 18 per cent of the average income, compared to 39 per cent in the Auckland region and 30 per cent in the Wellington region.

Despite rising house prices, Chang Urrea says Christchurch’s affordability status may be protected by the number of newly built houses. New Stats NZ figures show 7500 consents for new homes were issued in Canterbury in the year to October, up 31 per cent, and more than twice the number consented in Wellington. The only region to surpass it was Auckland, where 19,936 homes were consented.

Canterbury’s burgeoning tech sector reports a noticeable increase in Auckland jobseekers and Comet Backup general manager, Josh Flores, promotes the Christchurch lifestyle in job advertisements, pushing its proximity to the sea and the mountains.

He says Aucklanders made up 20 of the 55 applicants for a recent software developer job, which was unheard of pre-pandemic.

Christchurch startup Partly makes software for auto parts distributors and owner Levi Fawcett says he gets three or four approaches a week from Aucklanders wanting a change of scene.

The ability to buy a house is a big drawcard, particularly for singletons without a partner to help pay the mortgage, and in the past year five out of Partly’s eight new hires have bought homes.

Partly vice-president of operations and growth Harry Uffindell and executive assistant wife Kate made the move in February, six weeks before the birth of son Louis, and they are renting while they decide where to buy.

Pre-Covid they had worked in Sydney and despite intending to stay near family in Auckland on their return, that became untenable.

‘‘[We would have had to] sign ourselves up to a very large mortgage for a not-so-great property in a not-so-great area, coupled with a very long commute. By contrast, when we came to Christchurch we absolutely loved it, it’s a beautiful city,’’ Harry Uffindell says.

Friends from the North Island have joined them, drawn by job opportunities with big law and accounting firms and in construction.

‘‘A good friend who is a commercial roofer was living in the Mount (Maunganui), but it’s as unaffordable as Auckland, so they relocated to Christchurch and within two weeks they’d bought a house.’’

Lawyer Maria Green, who transferred to Christchurch with law firm Lane Neave in May, says a shift south was always on the cards eventually to be closer to family, but skyrocketing house prices prompted her and husband Montri Jaimeetham to make the move sooner.

Their mortgage is just $38 a week more than they were paying in rent on a two-bedroom Grafton townhouse in Auckland.

Green says the one positive from Covid-19 is the acceptance of remote working and Jaimeetham continues to work as a designer for Aucklandbased Studio Italia from the $890,000, four-bedroom home they bought in the Christchurch suburb of Redwood.

‘‘After seven months we’re still fizzing about our house, it’s fantastic, and there’s just the ease of living down here.’’

Brannigans partner Nick Carter does a lot of shoulder-tapping for executive-level Christchurch positions, and where once only two in 10 would respond to an approach, half are now willing to at least have a conversation.

He credits the boom in domestic tourism during the border closure with bringing Aucklanders to Christchurch to experience the post-quake rebuild.

The old salary divide, where Auckland pay was

traditionally higher, has gone and the lifestyle gains for families are huge.

‘‘The only regret they have is that they didn’t do it five years ago.’’

Carter says some newcomers returning from overseas during Covid-19 continued working for companies in the United States and Britain that then asked them to set up offices in Christchurch to take advantage of local skilled labour talent and the time-zone differences.

Phocus Software’s chief product officer, Blair Cassidy, agrees remote working and satellite offices are becoming more common, and he says tech companies these days will follow the talent when it comes to location.

In 2019 he turned down a job with Sydney-based Phocas Software because he wanted to stay in Christchurch, but offered to fill in while they found someone else.

That went so well Phocas hired him anyway, and its main R&D office is now in Christchurch with a staff of 70, potentially growing to 200.

New Zealand’s largest game developer, PikPok, has about 200 staff in Wellington, and the capital’s expensive housing is one reason why Christchurch is in the mix for chief executive Tyrone McAuley’s plans to set up at least one satellite office for up to 50 workers.

He says high rental costs don’t leave much disposable income for people to live on, and although PikPok offers workers a one-off $5000 bonus towards a house deposit, that doesn’t go as far as it used to.

‘‘Particularly for first-time buyers, or even for someone who has a healthy deposit saved up, the goalposts just keep moving.

‘‘There’s only so much the very biggest employers with the very deepest pockets can do to combat that from a salary perspective.’’

After a recent trip scouting potential South Island locations, McAuley says Christchurch came out high on the list because of its more affordable housing, lifestyle, and cheaper, better-quality commercial office accommodation.

Queenstown and Wanaka have a growing tech sector, but the housing issue was even worse than in Wellington. ‘‘As a package Christchurch offers more, Dunedin was interesting as well.’’

There may be sweeteners on offer from supportive local bodies to help clinch the deal, but McAuley refused to elaborate other than to say incentives do not include cash grants.

‘‘Let’s just say they’re making the decision easier than it would be otherwise if we were doing it alone.’’

ChristchurchNZ has helped four businesses move to the city over the past 12 months, bringing 41 full-time jobs, and it is working with a further 53 considering a shift.

While it does not expect to ‘‘land’’ all of those, business attraction manager Liz Eden says the impact of luring even a single large employer is considerable.

‘‘Anyone bringing 50-plus [staff] is worth just over $2.2m of GDP annually.’’

Eden says housing affordability is an element companies consider, and she sells it as ‘‘financial wellbeing’’, because if staff are able to buy a home and put down roots, it can improve retention rates.

‘‘Historically big organisations have been able to mandate where staff will go, but I think now what the banks, insurers and telcos are realising is that for millennials and Gen Z coming into the workforce, they’re going to have to offer something different, and if they want to own a home, Auckland and Wellington are looking less and less likely.’’

Decentralisation has other benefits too if the more infectious Delta variant of Covid-19 gets into a workplace, and businesses are starting to think about that.

‘‘It’s a bit like you don’t put all the royal family on one plane.’’

Commercial space rents are 25 to 50 per cent less than in Auckland and Wellington, Eden says.

‘‘When we say we are New Zealand’s newest city it’s not a lie, a lot of it has been rebuilt, so when you come into the city centre there aren’t really any dodgy old buildings that are occupied.

‘‘ANZ have their contact centre here, they have contact centres in Wellington and Auckland, but they’re looking at the growth for Christchurch because they can afford the real estate.’’

From a logistics and supply chain perspective, the South Island has remained largely unaffected by Covid-19 lockdowns, and that is another tick for Christchurch.

‘‘If you had your distribution centre in the South Island you would have been getting your stuff out far more quickly, and everyone was back at work earlier.’’

Eden speaks from experience – she is an Auckland refugee, and housing was a big factor in the decision to relocate to Christchurch with wife Emma, principal French horn player with the Christchurch Symphony Orchestra.

Two years ago they bought a four-bedroom, 5-year-old house in Prebbleton in Selwyn, and Eden estimates it cost about $200,000 less than what they would have paid for a two-bedroom in the Auckland suburb of Mt Eden where they used to live.

‘‘Now, it’s even more insane.’’

The perception that you get more bang for your buck down south is born out by the figures.

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2021-12-05T08:00:00.0000000Z

2021-12-05T08:00:00.0000000Z

https://fairfaxmedia.pressreader.com/article/282660395707651

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