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Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.
Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.

SocietyJanuary 24, 2017

Auckland’s housing crisis is a gift to the regions, but the regions still need convincing

Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.
Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.

This year thousands of people priced out of Auckland – or just looking to escape the big city rat race – will pack up and move to regions like the Queenstown Lakes District, where Peter Newport calls home. But if they’re hoping to be welcomed with open arms, he says, they may just be in for a nasty shock.

It’s usually very dangerous to try tinkering around with people’s lives, especially their houses, jobs and cash.

So if any NZ Government, Blue or Red, said “let’s try and force a huge number of people out of our biggest most successful city and get them to live in much more remote, less developed parts of the country, with no Government reward for moving” the response would be fairly subdued – even abusive.

Paula Bennett’s $5,000 one-way ticket cash offer to the Auckland homeless last year only got 22 takers.

But now courtesy of the on-going Auckland housing/traffic crisis people are flooding out of the city and very few of us have stopped to think what changes this will bring to the rest of the country. In fact it could turn out to be a Very Good Thing Indeed.

Last year 10,000 Aucklanders left for good and that number is forecast to increase for some years to come.

Imagine New Zealand as a giant Monopoly board with Auckland as those horrendously expensive Dark Blue properties that bankrupt unwary players at the flick of a dice. Previously all the other less glamorous, less expensive Kiwi places have not developed very much. The lower colours, along with the utilities and railway stations, have been largely unchanged for decades.

Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.
Morning view from Lakeside Road, Roys Bay, Wanaka by Paul Bica (modified), licensed under CC BY 4.0.

It’s now as if the Monopoly board has been chucked off the table by a drunk, bad-tempered player and we are all trying to figure out where all of the pieces should be put back.

For instance who would have thought that Te Anau would be booming? But it is, along with Cromwell, Wanaka and even potentially Invercargill. Queenstown is mortgaged, overcrowded and out of play for the time being ….. but it will be back on the board soon.

Te Anau now has block after block of brand new houses, all occupied and all costing around $700,000. Cromwell is even more expensive and is moving rapidly upmarket as a destination in its own right. Invercargill seems on the verge of Dark Horse breakthrough from the back of the field with smart business strategies, aggressive economic development, smart restaurants and smart CBD redevelopment all about to pay some very handsome dividends.

And much of this is brought to us courtesy of the Auckland housing meltdown, linked to a Queenstown crisis that followed closely in Auckland’s wake.

The domino effect is obvious when you stop to think about it. Ex-Aucklanders have played a big part in driving up regional house prices and it is now displaced native Queenstowners who are looking to move to Te Anau, Kingston, Glenorchy, Luggate and Cromwell. I’m sure the same thing is happening in Tauranga and Hamilton where former locals are looking at shifting to smaller, cheaper outlying towns.

Invercargill has set itself the target of attracting an extra 10,000 people by 2025 and a good number of those people might end up moving from Queenstown – or Auckland.

It’s not just the Auckland housing cash that’s on the move. It’s Auckland culture, job skills, young families, artists and even businesses. Put like that it’s not hard to see that New Zealand might be on track to becoming a much more balanced place to live and potentially a much more balanced economy.

Even more importantly, radio stations south of Nelson might soon stop playing music exclusively from the 1970’s.

The trouble is – and there’s always a catch – that the regions are not geared up to receive their newly cashed-up residents. The problem is emotional, even tribal.

I know this first hand because I left Auckland in April 2015 as part of the disaffected diaspora looking for some greener grass. The escape from the nightmare – Esmonde Road, the cavalier, arrogant operations of Fullers Ferries, any contact with Auckland Transport, the sad circus that is Queen Street on a Saturday night and the constellation of suspiciously dysfunctional Council Controlled Organisations – was wonderful.

But reality can bite hard in a sweaty Queenstown property auction room where over a hundred people – mainly from Takapuna, Botany, Kingsland and Ponsonby – are metaphorically tearing each apart over mid-market houses with a partial view of The Remarkables.

Our auction experience was so frenzied that it was only after being escorted from the room by first-aid experienced real estate hustlers we realised we had “won” our particular property. Winning is a relative term. The place had cost us more than what we’d just sold for in Auckland. We had gone from the frying pan into the fire. Real estate agents in Queenstown are allowed to carry guns – a fact little known throughout the rest of New Zealand.

Iconic Queenstown cityscape at dusk, New Zealand
Queenstown at dusk. Photo: Getty Images

So, accepting that Queenstown might not be a smart move for anyone apart from the mega-rich, the door is now open to ex-Aucklanders for almost unlimited adventures in places like Dunedin where the average property price is still only $354,000 and Invercargill where the average is around $257,000.

But – and it’s a big But – we don’t quite fit in.

How would you feel if you’d lived in a nice quiet place all your life and suddenly a whole bunch of strange people turned up with more money than you could ever dream of? These same people start buying property at inflated prices, that’s simple market economics. The social ructions caused are considerable and there is inevitable resentment.

And these new people look different – the men sport groomed metro-beards and the women are dressed by designers who have probably never even been to the South Island, apart from Queenstown.

More from Peter Newport: You think the Auckland housing crisis is bad? The Queenstown car crash will be worse.

The old South Island really does still exist. People do relate to each other better down here, they are more polite, they do help each other and they are scrupulously honest. It’s the near-perfect New Zealand we all imagine and that’s why so many people want to move here.

But the new arrivals are a different type of New Zealander – with different skills, different table manners, who drink different drinks, eat different food, consume different media and pay money to exercise in Pilates studios.

The Auckland skills – the human resources, the digital marketing, the internal communications, the user-experience experts – don’t naturally fit the South Island economy.

It’s like an awkward, no-alcohol, bad music teen dance event where the boys stick with the boys and the girls stick with the other girls. The two sides sort of want to get together – but don’t know how or even if they should.

Some smart people have the answers – economists, think-tanks, sociologists, regional development experts – but they are not being listened to.

The people who are flooding out of Auckland have the power to help the regional economies diversify away from mono-industries like agriculture or tourism – both subject to damaging global market cycles completely beyond our control.

But is the welcome mat out? Are the local councils and economic development agencies executing plans which capitalise on the Auckland refugees’ rich spectrum of skills? No. In fact Queenstown does not even have an Economic Development Agency.

We need Special Economic Zones. We need joined up Regional Development plans. We need Government rent-to-buy housing schemes for long term workers who can’t afford to live in the hot spots that drive our national economy. We need tax breaks and genuine, practical assistance for new, regional high-tech industries that can help New Zealand survive dramatic cyclical drops in both tourism and agriculture.

These new industries could also drive a new wave of highly skilled, wealthy overseas immigrants who could add real long term value to the economy and our culture.

There’s plenty of land in the South Island, we just need to create the high value jobs.

There’s room the in the world for at least two Silicon valleys and a second Davos. Perhaps we don’t realise it but our mountains, lakes and famously friendly culture are magnets powerful enough to attract some of the best brains in the world. Even very wealthy brains.

It’s not rocket science. Auckland’s crisis is a gift to the regions and our regions could be successful beyond our wildest dreams. Let’s hope the regions don’t drop the ball.

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