Aucklanders buying up big in Waikato & Tauranga

Published on: 2015-08-10

Aucklanders are leaving in such numbers that half the house sales in the Waikato outside Hamilton and nearly a quarter in Tauranga are to those from the big city.

Jamie Farmer, Westpac's northern consumer bank head, today releases CoreLogic data which shows the growing scale of the Auckland exodus and put the first precise numbers on the activity.

This year, half of more than 300 properties sold in the Waikato region outside Hamilton were to people leaving Auckland and a quarter of people moving house in Tauranga have been from Auckland - double the number in 2012 and up from the previous peak of 15 per cent in 2007, Mr Farmer said.

Mr Farmer blamed high Auckland house prices for the trend. From January to March, 793 Auckland home-owners sold up for the Waikato or Tauranga. From April to June, 873 sold up. As a comparison, in the last quarter of 2010 just 300 Aucklanders left for those regions.
Mr Farmer said this was the first collection and analysis of the shift, which was being driven mainly by economic considerations.

Aucklanders moving to Tauranga are selling for an average $770,000, buying for an average $533,000 and potentially pocketing the average difference of $237,000, the data showed.

Aucklanders moving to the Waikato, excluding Hamilton, are selling for an average $642,000 and buying for an average $398,000, leaving an average difference of $244,000, CoreLogic found.

"The vast majority of Aucklanders moving to Tauranga and the Waikato district are selling below the median price of $813,000, suggesting they are selling up rather than trading up.
"That could be because they feel squeezed out of the Auckland market for lifestyle reasons or the understandable appeal of life without a hefty mortgage.

"Either way, it seems a form of economic migration is under way with the cost of Auckland housing a key driver," Mr Farmer said.

Homeowners from Pukekohe, Manurewa, Mangere, Takanini and Waiuku made up the majority fleeing South Auckland while homeowners from Henderson, followed by Massey and the Te Atatu peninsula made up those leaving the west.
Phil Twyford, Labour's housing spokesman, said the data showed the impact of Auckland's high house prices.

"A city's productivity and prosperity is defined by where people can live and work, have mobility to get to jobs and that's critical. There's a breakdown now in Auckland," he said.

Retired people he met at a Te Atatu bowling club were selling for about $900,000 and buying in the Waikato for only about $400,000.
"They're pocketing a big cash windfall. This is a matter of financial survival," Mr Twyford said.

University of Auckland property professor Larry Murphy is also concerned about the effects.

"Locals in those regions might actually suffer with higher house prices. Vendors might be excited or happy but new families might find it challenging to buy a house," he said.
He also understood why Aucklanders shifted south: "When you're getting older, do you want to move out of the city and live in a smaller town? Also, the search for lifestyle, living in coastal areas with high amenity ... if this becomes more pronounced, potentially those other markets will start appreciating, " Dr Murphy said.

The CoreLogic numbers indicate this is already happening.

"Aucklanders are paying a premium and driving up local prices. The average price paid by Aucklanders in the Waikato so far this year is $398,000, an average of $22,000 more than the locals. They are paying an average of 11.4 per cent above CV compared to non-Aucklanders who are paying just 6.7 per cent above CV," Mr Farmer said.

"In Tauranga, it's a similar trend. People moving from Auckland are paying an average 15.2 per cent above CV, 1 per cent more than locals. In dollar terms, that equates to an average price paid by an Aucklander of $533,000 compared to $475,000 by a local," Mr Farmer said.

Shamubeel Eaqub, the economist who with wife Selena wrote Generation Rent, said Aucklanders were spreading their housing problems.

"The housing market remains broken. We have to fix the supply of land, infrastructure and houses. Taxes on capital gains need to be rigorously implemented and negative gearing abolished," he said.

"Banking rules that push them to lend to mortgages rather than entrepreneurship needs to change.

"And finally, we need to fix rental rules to give greater certainty of tenure for renters and make even a rented place a home."

Off to Tauranga ...

"It's a rat race," says Aucklander Casey Paki of life in the city.
He spends more than an hour commuting from west Auckland into the city centre, where he works. "So I'm leaving."

Fortunately, Mr Paki works for a business with offices around New Zealand, including the Bay of Plenty, so he is able to relocate without any work worries.

Tauranga is his pick, mainly for the lifestyle and lower house prices. "It'll take me five minutes to get to work there. I'm just not seeing enough of my kids at the moment," he said.
He is pondering selling the family home and buying in Tauranga, although he has some concerns about the timing.

"If we don't get into the Tauranga market in the next year, we might miss out," he said.
Mr Paki will make his job change next week - and will start looking at Tauranga houses.

Off to Hamilton ...

Aucklander Lesley Mason is fed up with Auckland's traffic jams.

The pace of life got to her, so she plans to move to Hamilton at the end of this month.
"I've been renting in Auckland but I've bought in Hamilton. We looked in Auckland but couldn't find anything so we're getting transferred. I do love Auckland but the traffic is insane. I lived in Johannesburg and that had worse traffic but I've had enough of the traffic here and the congestion."

She lives in Avondale but works in Royal Oak.

"I would have bought here if prices had not soared," she said.

Hamilton real estate agent Cathy O'Shea said Ms Mason's timing was shrewd.
"She has been proactive. She saw prices rising and bought just as it was starting to go crazy," she said.

NZ Herald