Auckland and regional house prices are poles apart — and these 33,000 people are behind it!
Wellington rents overtook Auckland's this year to become the country's highest!
Auckland house prices peaked in 2016 and have cooled and edged down since then.
Over the same period, house prices in Wellington, Hamilton and Tauranga have repeatedly reached new highs.
Wellington rents even overtook Auckland's this year, making it New Zealand's most expensive city to rent in!
Why are these markets running hot and cold?
A study by independent economist Benje Patterson offers an answer.
Benje Patterson
Patterson's report found that over the 4 years from June 2013 to June 2017, Auckland's total population grew by nearly 200,000 to around 1,700,000.
But during those 4 years, 33,000 people also left the supercity of Auckland to settle in other regions.
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Benje Patterson said: “One feature of migration out of Auckland is a net outflow of young people around the age of 30. Most of them are leaving Auckland because of housing affordability.”
These young people cannot afford housing in Auckland, but they can still do their bit to push up house prices in the regions.
Patterson expects the exodus of young people from Auckland to continue. “Selling an Auckland home and moving to an area with cheaper housing has become an option many people are considering.”
“In the past, immigrants would replace these young people leaving Auckland. But as the international immigration policy environment tightens, Auckland needs to focus more on retaining young people and attracting young families to the city.”
Areas near Auckland attract the most people leaving
Areas near Auckland attracted 2/3 of those leaving the city. Tauranga was the most popular destination, attracting an average of 1144 Aucklanders each year.
During this period, Waikato gained an average of 3381 Aucklanders a year, with Hamilton attracting 1500 Auckland residents.
Northland attracted nearly 6000 Aucklanders over those 4 years, evenly spread across Whangārei, the Far North and Kaipara.
Dunedin and the Queenstown Lakes district recorded a net gain of more than 1100 people moving from Auckland. “The boom in the resort town of Queenstown has also been driven in part by Auckland buyers.”
5 years earlier, a net 126 people moved from Wellington to Auckland. But by 2017, the flow had reversed, with 468 people leaving Auckland for Wellington.
The young people leaving Auckland include professionals such as teachers and nurses. Although Auckland house prices have cooled, the KiwiBuild affordable housing programme has all but collapsed, and young people's dream of a secure home and a rewarding working life remains a distant prospect!