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Migrating is more than just filling in forms and submitting paperwork; its a complex process that will test even the most resilient of people. Understanding Australia & New Zealand at a grass-roots level is paramount to your immigration survival, and to give you a realistic view of both countries, its people and how we see the world, as well as updates about any current or imminent policy changes, subscribe to our regular blog posts by entering your details below.

Cricket, Power Cuts and Root Canals

Posted by Iain on Feb. 14, 2015, 10:47 a.m. in Living

It’s been a big week and my apologies for the later edition of the Southern Man. 

It’s that time of year when the Accountant wants to see me, the Dentist decided on a bit of root canal, I had a mediation over a leaky house issue before it gets to the Courts and somewhere in among all that did a week’s worth of work. Collapsed on the couch last night and dozed instead of sending this out.

Hey, I am only human and Southern Man’s letter from new Zealand just had to wait.

A bit of a hotch potch this week of thoughts and events.

Paul is off to South Africa on Monday for two weeks of Seminars in Johannesburg (now looking to be virtually fully booked), Durban and Cape Town. Suggested he pack a good torch and some extra batteries. How far has this once proud nation fallen that there is now four hours a day of power blackouts (something the South African spin doctors call ‘load shedding’). Call it what you like if but you can’t boil the water it’s a power blackout……. My partner Myer has been there the past two weeks talking to packed houses about moving to Australia. He wryly observed - they seem to have got used to 20,000 murders a year, a rape every three minutes, rampant Government corruption, public service inefficiency but cut off their power for four hours a day and they all start running for the door. It’s curious what we get used to.

I’d suggest the last one out should turn off the lights, but the lights it seems are likely already off.

Locally, we have electricity in abundance but as happens in most years we now have drought conditions declared on the east coast of the South Island (cricket fans might not believe that as this morning’s first game of the Cricket World Cup in usually very dry Christchurch is threatened by rain  interruptions). Up here in Auckland (nearly 1000 km away from Christchurch) there has been no substantial rain for over 6 weeks - the back garden needs regular watering to keep it alive. 

Temperatures have been a very pleasant 25 - 28 degrees Celsius now for six weeks and we are told to expect this through to April. Wonderful, unless you need to grow things for a living.

 

The World Cup of cricket kicks off n about an hour and it is filling all local cricket fans with an excitement not really experienced before. For the first time in a very long time, if indeed ever to be brutally honest, New Zealand can consider itself among the favourites. Those of us who enjoy this sport have been in that ‘I can’t wait’ mode for at least the past week. My apologies to those who think thesis like watching paint dry but can 1 billion Indians all be wrong? I don’t think so…….

Wonderful to see Christchurch playing host to the (rather low key but a hell of a lot better than what Australia put on as co-host!) opening ceremony. This was a chance for New Zealand’s second city to show the world it is back. out of adversity comes some wonderful opportunities including the new ‘village green’ type of cricket field at the Hagley Oval. Compare that venue set in a huge park with grassy areas and ‘low rise’ seating stands to the concrete jungle that is the MCG, where England take on the typically cocky Australians later today. The MCG is magnificent but in typical low key New Zealand style Hagley Park oval somehow seems more intimate.

In a final thought before i grab another coffee and settle into the couch for the Black Caps versus Sri Lanka I get the feeling that momentum is building for the addition of a compulsory IT qualification for all school leavers. Shockingly for a country that exports over $7 billion in ICT products and services every year only 6% of school leavers have a recognised IT qualification. The fact that there are in Auckland alone today over 1500 unfilled high skilled IT roles reflects the fact that our universities and technical institutes only produce 50% of the graduates this booming industry needs to satisfy it’s demand. 

Around 20% of all my clients work in IT and they are the one group of clients that can generally expect to find work in a few short weeks of landing with a high degree of certainty. This industry is also showing the most rapid increase in salaries with graduates starting around $60,000 and with 5 years experience most are on $85,000 plus. Thereafter the sky really is the limit. There has been a sea change here in this industry and New Zealand, if it can find the workers required, will see ICT exports become one of our top three or four exports within the next few years. it is already in the top ten.

For any of you (or any of your family and friends) might be thinking of joining us we are still trying to help a local IT recruiter fill some 200 IT roles and while we don’t hold ourselves out to be recruiters, we may be able to help some wannabe Kiwi IT specialists into roles locally if they retain us to handle the entire visa and settlement process.

Our New Zealand bound clients will shortly (if they haven’t already) receive an invitation to start using our sexy new in house developed client management system called HuM (as in ‘Helping U Manage’). In development for the past 18 months HuM was designed to help us better manage our clients visa applications in an electronic environment given from later this year more visas will be filed with the Department electronically and we wanted to be ready.

It has also given us the opportunity to provide our clients a one stop shop on our server to upload documents we need to see and to manage the logistics of their move - a place to create folders specific to the move such as ‘Bringing the Dog’,  ‘Shipping my personal effects’, ‘Finding accommodation’ and ‘Finding jobs’. Rather than have folders for this stuff all over your desktop you can save it all in your secure personal file on their own protected cline file on our server. Noting earth shattering but we hope a tidy solution designed not just for migrant but any small(ish) business with multiple clients that need to be managed in an increasingly electronic and cloud based world.

We will roll this out to our clients using our Melbourne office a little later.

Last but by no means least in about a month’s time you are going to notice a change to the IMMagine branding - principally to shades of blue. This change is the final step in the re-brand of IMMage new Zealand and IMMagine Australia to better reflect the ‘one company, two country solution’ we offer to those seeking a better life.

We will be rolling out a new website which we believe better reflects who we are and what we do across these two countries.

Okay, the umpires are making their way out on to the field shortly so I need to get to the couch before my son ‘shotguns’ it.

Until next week

Iain MacLeod - Southern Man


Third Most Prosperous Country

Posted by Iain on Nov. 14, 2014, 4:04 p.m. in New Zealand Lifestyle

New Zealand has once again been ranked in the top three most prosperous countries in the world for 2014.

Topping the annual list this year is Norway followed by Switzerland in second place.

For what it is worth Australia came in seventh so a tidy little double for the Immagine Immigration countries of destination……

The least prosperous country this year was the Central African Republic. The United States came in 10th.

The 2014 Legatum Prosperity Index ranks 140 countries on their health and well being and so assesses factors including education, safety and security, health, economy, entrepreneurship, governance, personal freedom and social capital.

New Zealand ranked first for personal freedom, second for social capital and governance, seventh for education, tenth for safety and security, 15th for economy, 18th for entrepreneurship and 20th for health.

Not a bad effort when you are ranking 140 countries.

Translating this into the sort of lives we lead here I can explain it as reflecting our being a capitalist, socialist democracy which in other words means you have to play your part in paying your way pay but if you cannot, as my neighbour we will not leave you behind. 

That philosophy runs very deep in the DNA of virtually every New Zealander and probably explains why Australia ranks in the top ten as well given their similar (if not louder) worldview and the Scandinavian countries also rank so high.

In new Zealand this mix of free market capitalism with a dose of redistribution of wealth all happens within bounds that the vast majority of New Zealanders are comfortable with.

There is a constant tension (relaxed and good natured if it needs to be said) between the philosophies of those that want untrammelled free markets and no regulation and those that want more centralised planning and Government involvement in our lives.

When it comes to heath, education and pensions for example we are all firmly in the camp of socialising risk i.e. spreading across all taxpayers, the cost of caring and educating all.

It does solve all problems however.

If you look at youth unemployment statistics in New Zealand they can be very high and 18-24 years olds runs as high as 20% in some parts of New Zealand.

Yet only this week the Tourism sector was bemoaning the fact that they cannot get enough young people into changing beds in hotels, bar work, café waiting and the like – there is a labour shortage. They were calling on the government to allow greater numbers of under 31 year olds here on open holiday working visas (meaning they can do whatever they wish without their employers having to prove they cannot find a local to fill the vacancy). Government responded that there are currently 62,000 young people from all over the world filling these sorts of jobs when the annual target was for only 50,000 to be here.

What this demonstrates is that the alternatives to what is often lower paid work in New Zealand are simply too attractive to many young New Zealanders.

It is hard to fathom how in a country which has strong economic growth, 1600 people a week coming off welfare, over 100,000 jobs created in the past 3 years, strong growth in tourist numbers that there is not a bit more ‘stick’ with regards unemployed young people. At this point in time for example the state agencies that are tasked with assisting young people into work do not say – well you can either go to, say Queenstown or Auckland and find work or you can lose your unemployment payments. They are generally allowed to stay living where they are with no incentive built in to getting off their chuffs and working. We do have cars, trains, buses and planes here I often reflect…

In what was an extraordinary first when the NZ government recently offered up to 1000 long term unemployed a one off payment of NZ$3000 (about US$2500) to go to Christchurch where unemployment hovers around 3% and find a job they filled the places. But seriously? We have to pay people who are being paid to do nothing to get off their backsides move to a city to find work?

It is just as well we are a prosperous first world economy and a nation of very tolerant tax payers. If we weren’t things here could get quite ugly quite quickly for a lot of people, particularly the young, who may well have squandered one of the worlds best education systems but who have a mentality of the world owing them a living.

Overall we get the balance pretty much right as is reflected in this survey and once again reinforces the view of many migrants and locals alike that this really is a very special little country. Possibly the best kept secret in the world.

Speaking of which the final seminars for the year in South Africa are underway and I will be travelling to Hong Kong and Singapore in about ten days. If you know anyone that might wish to attend they can click here for details.

Until next week

Iain MacLeod - Southern Man


NZ Tops in Social Progress for 2014

Posted by Iain on April 4, 2014, 11:40 a.m. in New Zealand Lifestyle

I don’t often get excited by surveys but when one appears that affirms the message we give potential clients, I do get excited. Few have excited me as much as one released this week from the Washington based Social Imperative Forum that ranks countries by social progress. 

It’s not as dull as it sounds as it goes to the heart of what our society is about, how we got here and what challenges remain.

The survey asks three essential questions:

 

  1. Does a country provide for its people’s most essential needs? 
  2. Are the building blocks in place for individuals and communities to enhance and sustain wellbeing?
  3. Is there opportunity for all individuals to reach their full potential?

It ranks New Zealand top out of over 130 countries for social progress. While historically Gross Domestic Product has been the indicator of choice as a measure of the ‘success’ of an economy and a country, what I like about this report is that it looks beyond that purely economic measure and looks at overall wellbeing.

It paints a picture of an egalitarian society that is cohesive, relatively prosperous with real opportunities for all, irrespective of background, but which also confirms what we always advise people – it ain’t paradise and it does have problems. But as a client from South Africa once told me the big difference between countries like mine and his (that he was leaving) is having lived in New Zealand for a while this little country of ours has no problems it cannot solve.

What is interesting is that we have achieved this top ranked status through a mix of open economy, strong and transparent democracy along with the socialising of three sacred pillars of our society – tax payer funded education, healthcare and social security. 

What struck me is that we rank 25th in the world for per capita GDP proving there are 24 countries where people are wealthier but none are better off.

It also fidentified some things which at first glance appear at odds with a county where everyone looks out for everyone else – we have a relatively high rate of death through pregnancy, we come mid-table for suicide and we are getting very fat…

A closer examination of this explains these apparent anomalies.

With 15 deaths of pregnant women per 100,000 we rank 76th yet experts in New Zealand explain that this is because New Zealand captures the deaths of all pregnant women for many reasons other than death during childbirth (a rate which is actually extremely small) and captures those that die of pre-existing conditions and heart failure for example.

On suicides New Zealand is known for examining all ‘suspicious’ deaths through referral to the Coroner and where most countries will not call the death a suicide, New Zealand does. So it is not so much that New Zealanders are jumping off buildings in greater numbers,  so much as we investigate deaths and if the conclusion is suicide we call it as it is. Most countries, including highly developed ones, do not. We are statistics and accuracy freaks.

There is no denying New Zealand has an obesity epidemic and that is very real, dragging us down the ‘progress’ ladder. I have to say given what you put in your mouth is individual choice there is possibly not a whole lot that can be done about it. Except educate and try and change behaviour. 

So why are we doing so well?

I am convinced it is our history. The early settlers in New Zealand were determined to establish a (relatively) classless society where ‘Jack is as good as his Master’. I often speak to this at seminars and how deeply this egalitarian ideology runs in our DNA.

Simply put, we give a damn about one another and look after each other. It serves us all very well.

How did we achieve this?

  • A progressive but fair taxation system.
  • Tax payer funded healthcare, education and pensions for retirees.

The report in many ways explains our success but equally points out fairly where we can do better and where challenges remain (Maori, for example, make up 15% of the population yet represent over 50% of all prison inmates).

New Zealand is not perfect but we seem to be doing an awful lot right.

This helps to explain why I wouldn’t want to raise a family or live anywhere else. I urge you to read it (click here to download the report) if you are thinking of joining us in New Zealand (particularly pages 47-49). I could not sum up the essence of New Zealand better.

Until next week

Iain MacLeod - Southern Man


Auckland Needs To Grow Up

Posted by Iain on March 14, 2014, 4:10 p.m. in Living

It’s time for my home town, Auckland, to grow up. 

Literally.

Debate has begun raging across the isthmus that is home to the fast growing city of Auckland over whether to grow out or up.  The Auckland Council’s proposed Unitary Plan released for discussion several months ago, among other things, plans for rezoning many suburban areas allowing medium density housing and apartments.

Including my own in Mount Eden, a suburb that was settled and built during the late 19th and early 20th centuries. Leafy streets and old Victorian villas line these pretty neighbourhoods. And some see their preservation as critical to the character of the city.

I am not sure I agree. Cities change. Cities grow. Who is to say that pressed steel ceilings, bay windows and dark, gloomy often cold in winter and hot in summer Victorian houses represent the peak of urban architecture? Yes they speak of our ancestry and our forebears, but the truth is they are in many ways an architectural oddity and are out of place in a South Pacific setting. Designed by British Architects for a British climate (which Auckland demonstrably is not) they are certainly pretty but having lived in two they are terribly impractical and not suited for the sub tropical climate of Auckland.

Over recent years we have seen, particularly on the fringe of downtown Auckland but also in other more traditionally suburban areas, the rise of apartment blocks. Now the suggestion is to expand the footprint of increased urban density into suburbs like my own and in particular, along major (public) transport arteries.  As might have been expected, the n.i.m.b.ys (not in my back yard) are out in force seeking to ‘preserve’ both historical architectural styles and a lifestyle many view as sacrosanct.

Where I live in Mount Eden our end of the street, which lies close to a major arterial transport route, has been designated for change from single dwelling units on land parcels of at least 350 – 800 square meters to low rise (4-6 floor) mixed use apartments/commercial. 

My neighbours are up in arms and my letterbox is being stuffed full of prepared submissions ready for my signature to forward on to the Auckland Council demanding my street not be touched. All around me I am being exhorted by local groups to sign petitions and demand that our street not be ‘destroyed’ by this proposed intensification.

People are outraged. I am excited.

I want to tell the Auckland Council I am well on board with the changes.  They will be good for the suburb. Good for our part of the city. Good for a greener Auckland through more efficient and regular public transport services with potentially (if we do it right) less use for single occupant cars.

And yes it will see many streets altered visually and part of me believes that bowling a beautiful old house like our own is a form of cultural vandalism but who says something better, warmer, drier and lighter cannot replace it? Architecture does not stand still.

The thing is we have a choice in Auckland – keep growing the city out (it is already among the largest cities by area in the world – 94 kilometres from its northern tip to southern) over highly productive farm lands and forests or do what all modern cities before us have tended to do – build vertically.  As Auckland has grown in recent years public transport is certainly better than it was (buses and trains are now frequent but need greater densities of people that a larger scale brings) but there are all sorts of other benefits to what is in fact very modest intensification that seem to be being missed by the naysayers.

For starters more people living within, say ten minutes easy bus ride from downtown Auckland, is going to bring more vibrancy through concentrating people, shops and other urban amenities in a smaller area. Who does not love the idea of more places to eat, more places to socialise with frequent public transport? I believe it might, as proposed, make communities closer not tear them apart. We are not talking about anything more than 4-5 stories in most parts of the city. People want our train services to be more regular and convenient and not cost the rate payer in subsidies. That will only happen with greater population densities along the feeder routes and station hubs.

No one is talking Hong Kong or Singapore with shoeboxes and people living cheek by jowl high in the sky. We are talking north Manhattan with three to four storied apartment buildings. We are talking a vertical village here, not Gotham.

We are blessed with a lot of green space in Auckland and no one is talking about changing this. Except to expand them.

With an ageing population there is a demand shift already taking place where those of my generation are increasingly looking forward to the day we can move into a reasonable sized apartment of perhaps 120-150 square metres, free up some capital from our houses and land and spend less time maintaining the house and spending more time travelling and enjoying the city, rest of New Zealand and the world. Lock and leave. Those of us who bought into the more central suburbs when we were younger can easily buy an upmarket apartment for NZ$450,000 - $800,000 in the same area, thus freeing up at least as much cash from the sale of our existing freestanding properties owing to the high value of the land upon which our houses stand.

The time surely arrives in most big cities when a portion of single dwellings need to be replaced by apartment living – it not only makes sense in terms of making our city more efficient, vibrant and exciting, it is what a growing percentage of the population is demanding. In Auckland we will have within the next year more than 20,000 apartments and around 3000 are coming on stream each year. There is clearly growing demand. Many migrants would prefer low rise apartment living (bigger than the shoeboxes many live in now high in the sky in Singapore, Hong Kong and Jakarta) to a freestanding house (although it has to be said many of my clients are in love with the thought of a back lawn and garden) and New Zealanders returning home after living overseas are also sold on the concept.

As with all such transitions this will create tensions in neighbourhoods but that is part and parcel of urban living anywhere. I have little doubt, however, that for decades to come there will still be plenty of freestanding houses with a patch of grass and gardens for those that want them. We will preserve, and indeed increase, green spaces for the citizenry to walk the dog and play with the kids. But equally there will be more people living more closely together and that will bring its own rewards and challenges.

I, for one, won’t be signing any petitions to try and prevent it in my neighbourhood

I welcome it.

Until next week

Iain MacLeod - Southern Man

Tags: lifestyle | housing | auckland

Cost of Living in NZ...?

Posted by Iain on March 5, 2014, 3:22 p.m. in Living

Now I am not sure if being named the world’s most expensive city to live in is any reason for Singaporeans to celebrate, but it may be a mantle they’d prefer not to have.

The announcement this week from the Economist Intelligence Unit that Singapore has now leap frogged Osaka, Tokyo, Moscow, New York, London and Sydney as the world’s (alleged) most expensive place to live in is, I suspect, not a whole lot to be proud of and perhaps explains in part the continued popularity of our seminars here in the city state.

Of course it might also be quite misleading.

I certainly don’t find it excessively expensive as a place to visit but then I guess I am not trying to buy a shoebox apartment in the sky, educate my children or get sick and need hospitalisation either……and this information is designed specifically to give companies an idea of what it will cost their Executives and other ex-pats to live in the 140 odd cities surveyed.

The survey doesn’t reflect what it costs the average person to live in Singapore, New York, Sydney or Auckland for that matter. Locals I imagine have a different spending profile to ex-patsand Executives and don’t usually shop in luxury stores, send their kids to international schools and often they live in cheap(ish) public housing, buy their clothes at H & M or Takashimaya, educate the majority of their children at local schools and they use public transport to boot. The ex-pats tend to have cars. Cars in Singapore are the most expensive in the world and international schools don’t come cheap.

It is possible then, as with all these sorts of surveys, a case of lies, damned lies and statistics. Or be very clear who the target audience is. Given you can still eat well for $10 at a local hawker centre on the one hand yet pay a small fortune for a meal at a five star restaurant, where a (modest) beer along Orchard Road can set you back $18 yet you can buy the same one for $4.50 if you head off the main tourist routes, where high end clothes are eye popping in price yet you can get reasonable kit at many local stores, I suspect many Singaporeans would rightly conclude it might be really expensive for ex-pats and high flying execs but for them it isn’t.

Which segways nicely into this week’s planned ‘Letters from New Zealand’ topic. I was stunned to read a report in the New Zealand Herald last week that suggested a family of four only needs to earn a little over $18 an hour or roughly NZ$38,000 a year in order to live. The article did not make clear whether it was before or after tax. I got the feeling it was before tax. That translates into roughly $600 a week to provide shelter, food, transport, clothes and so on for four people. It is a little over $700 a week if it did not include tax.

When we are asked by potential clients what a family of four needs to live a dignified life in Auckland out in the suburbs in a three bedroom house we tell them in our opinion the true figure lies between $4000 and $5000 a month or roughly $60,000 a year. That’s almost double what this survey suggests.

So which is right?

I have over the past week been researching as many different statistical sources as I can and my conclusion is that a family of four may be able to live in small town New Zealand for $600 a week principally because the cost of housing (mortgages or rent) is significantly lower than in the major cities like Auckland, Wellington and Christchurch. Anywhere else I simply don’t believe a family of four could do much more than survive on such a meagre amount without state support and supplements (which are freely tossed about).

People who rent property in New Zealand tend to spend about 20% of their income on shelter, around 25% on food, around 11% on transport, 12% on restaurants and eating out(!), utilities 10% and roughly 25% on everything else.

Of course one factor that does push down the cost of living in New Zealand is the fact that my forebears (wisely in my view) decided to socialise risk – education in order to provide an equal opportunity for all, health through massive economies of scale and of course social security/pensions and the like. So whereas in countries like Singapore taxes are lower than New Zealand the cost of living ends up at least as high if not higher for most families as they are largely on their own in terms of the things New Zealand tax payers take for granted – education, health and social security.

If you consider then that most people have those costs largely covered by their taxes perhaps $38,000 a year does cover everything else.

But I still doubt it.

I should also add that our clients tend not to be average – they tend to be more educated, more skilled and have greater savings than many New Zealanders so perhaps our estimate of what they need to continue enjoying that upper middle socio-economic existence is accurate for them and simply reflects the fact they live in more expensive areas, eat at more expensive restaurants, prefer iPhone 5S to the cheaper Nokia and they make sure their kids all have the latest gadgets. That certainly applies to some but not all.

I have analysed what it might cost a single person who arrives in Auckland, say, to find employment in order to progress their skilled migrant aspirations. The number I came up with? Around $2000 a month being $1000 a month for shorter term and modest accommodation, around $500 a month on food (if they cook) and around $500 on cellphone, transport (public) and other expenses. Add a partner and you probably add about $500 a month. Add two children and you’d add a further $1000. 

So once these people have secured employment if they were to rent a two bedroom apartment in downtown Auckland or on the city fringe they possible can live on that $600-$700 a week but there won’t be a lot of luxuries.

My experience tells me that once people are in well paying jobs they start to add those luxuries and pushing up those expenses to the $4000-$5000 a month.

So while I would not dismiss the report in last week’s newspaper I’d hope that people appreciate that in New Zealand, just as in most countries, there are wide disparities in the incomes people need to live, what they would describe as a ‘comfortable’ and dignified existence. There is a big difference in how we choose to spend our income, where we want to live, whether we use public or private transport, public or private schools, public or private health providers, wear LV jandals or Haviannas and so on. Generalisations can be difficult.

My advice is to base your planning on the $4000 - $5000 a month for a family of four for migrants especially given most of you will end up (or have ended up) in Auckland where property values are somewhat over the top and therefore cost of living is higher. While you will earn more in Auckland (the average salary is $75,000 a year against $53,000 across the whole country) you will also spend more.

Speaking of expensive cities I am in Hong Kong for the next few days giving our first seminar there on Saturday 8 March. I am quite excited to be returning there after an absence of 15 years. If you know anyone that might wish to attend they’ll need to register on our website without delay.

Until next week.

Tags: lifestyle | housing | auckland

It's Life Jim, But Not As We Know It!

Posted by Iain on Jan. 31, 2014, 8:12 a.m. in Living

‘It’s life Jim, but not as we know it’ bounced repeatedly around the inside of my head earlier this week as I ventured out for a couple of hours break from my hectic consulting routine in Jakarta, Indonesia. I wanted to explore what I think might be ‘downtown’ here (but I am still none the wiser). If I had just arrived from another solar system 160 million light years from this place I could not have been more surprised.

The walk from the hotel to the local mall is only about two kilometres but required me to weave around and over broken and crumbling footpaths, tree roots, assorted hawkers and tired looking motorcyclists parked up on the footpaths enjoying a leisurely smoke in the warm afternoon air. Not sure why they bothered with the Malboros, if they had wanted a buzz they could have just breathed the air. Vehicle fumes are so thick here you could get high by sucking on the atmosphere. Half the locals walking around had face masks on. I could see why. This is air you can’t just smell, but taste. It is faintly metallic.  A Pulmonologist’s paradise.

As I weaved my way along a crowded footpath to the local shiny mall with its high end fashion stores, coffee shops and hotels ringed by shiny new office towers and scores of security guards I was forced at one point to dive out of the way of a swarm of motorbikes careening towards me. It seems they were avoiding the traffic in the road by, er, zipping down the footpath! Who needs roads???!! 

The Star Trek ditty in my head changed instantly to a slight variation of Captain James T Kirks famously spoofed line of  ‘we come in peace, shoot to kill, shoot to kill, shoot to kill……’ to ‘we come in peace, drive to kill, drive to kill, drive to kill’. 

I can report I have never seen anything like it. Not even in Kuala Lumpur which, until my visit here, is the closest I have come to a gas guzzling fossil fuel paradise with crackpot drivers.

Jakarta, however, seems to take the cake. If the drivers in KL are a bit soft in the head with a quiet loathing for life these Indonesian drivers are positively psychotic.

Five cars span most three lane carriage ways. They sit on their horns. They all push in and push out of their lanes but make little forward progress and it seems no one gets anywhere any faster than had they just stayed in their original lane. The shoulders of the freeways are just another lane to be used by cars and flocks of Kawasakis and Honda 125s. And for every car there are 50 motorbikes (I get the idea but I am not so sure it works…..). 

The traffic never stops. I have been in London. I have been in New York. I have been in Singapore and Melbourne. The traffic in those places is heavy and hectic. But here? It never takes a break. And every hour is either peak hour or gridlock. As I type this at close to midnight I can hear the rumble from the freeways that criss-cross this part of the city as loudly as I can during what would pass for ‘peak hour’ in Auckland. It just goes on and on, a low growl from a beast that never sleeps. Spewing its toxic particulates for all to breathe in.

I have realised that drivers here in Jakarta each follow their own, very limited, set of rules. The one they do share in common is ‘Get out of my way or I will continue parping my horn even though none of us are moving anywhere’. 

Thereafter there appear no rules. Automotive Darwinism.

Driving in from the airport a few days ago was to say the least an interesting experience. Perhaps, more accurately, a near death experience. I don’t normally squeeze my eyes shut in the back seat of taxis (nor scream like a pre adolescent girl) but on this two hour ride in to the city I nearly did. Repeatedly. I never realised you could get a car so close to the chassis of a 16 wheel truck that your passengers could read the numbers on its registration bar code but now I know you can (when your eyes are open). 

Terrifying.

All manner of vehicles either flooring the accelerator competing for gaps in the traffic or gridlock. Where walking would be faster than driving.

In South Africa there is that game of ‘freeway chicken’ played by taxi drivers and owners of Mercedes Benz’s. It involves getting as close to the car in front as you can while travelling at 145km per hour down the freeway. 

In Jakarta they not only play chicken with those cars in front (but generally owing to the congestion at slower speeds) they also do it with the vehicles on either side. Three lanes, five cars all trying to squeeze the others out of the way. Has to be a Panelbeaters get rich quick town.

This is my first trip here, perhaps obviously. 

A new potential market for us I have been really impressed by the quality of the people we are meeting. Generally fluent English speakers (vital for securing skilled jobs in New Zealand), highly educated and qualified and really nice people to boot – makes the driving habits a bit hard to comprehend.

Most have had enough of the stresses of this mega-city, the non stop ‘action’, the pressures, the corruption, the pollution and the un-family friendly environment that are these sorts of urban environments across Asia and, increasingly, the world.

It is a little hard not to get slightly depressed if this is what we are creating for our children. Our legacy to future generations. 

I know I must read like a country bumpkin when you read this and perhaps I am. However, there is something about a city like Auckland with its 1.5 million people with the same malls, the same shops, the same eateries as this city has but which is manageable to negotiate and to live in. Where the 2km drive to the supermarket doesn’t take half an hour and result in near death experiences. Where corruption is absent. Where the air is breathable and doesn’t taste like the burned insides of a tin can.

While I have no doubt Jakarta is no more Indonesia than Auckland is New Zealand I am looking forward to welcoming more Indonesians to ‘life boat’ New Zealand – if I make it back to the airport at the end of the week without my driver taking me under the wheels of one of those 16 wheeler truck and trailer units the taxi driver will inevitable play Jakarta chicken with…….

Until next week - Iain MacLeod

Southern Man – Letters from New Zealand

Tags: lifestyle | housing

What does 2014 hold for NZ?

Posted by Iain on Jan. 17, 2014, 11:43 a.m. in New Zealand Economy

Happy New Year to all our regular Southern Man Letters from New Zealand readers.

The team is back in the office, tanned and relaxed (that lasted about two days!) and looking forward to an extra busy year. For us it is going to be a year of firsts – we are now dipping our toes in the Hong Kong and Indonesian markets. Across the Tasman Sea our Australian colleagues are heading to Botswana, Greece and Turkey to test the migrant waters there.

And what of New Zealand in 2014? How are the tea leaves looking?

If you can believe the various surveyors and economic forecasters we are in for a very good year and several beyond this. A few key points in recently released surveys show:

  • Business confidence is at a 20 year high
  • All sectors of the economy are growing – manufacturing, agriculture, services and tourism are all showing strong growth
  • All regions of New Zealand are in positive growth and confidence territory (spreading out from Auckland and Christchurch which dominated 2013)
  • ‘Own business’ confidence is running at multi year highs and this suggests GDP growth of at least 3.5% this year
  • Retail sales through Christmas were up 7% on the year before and have continued through the early part of January
  • Skills shortages are starting to bite (told you!!!!) - especially in the construction and IT sectors – everyone from Architects, Civil Engineers, Quantity Surveyors and Planners through to related trades workers. In ICT some are now calling the shortages ‘dire’ which might be a slight exaggeration but these shortages are going to be biting across most sectors within the next six months in my view .
  • Unemployment which currently stands at 6.2% is predicted to fall to 5.5% by years end and 4.5% by the end of 2015. It is worth noting that once unemployment gets down to 5% in New Zealand you’ll not be able to find a Secretary to do your word processing……or find someone to make you a cup of coffee. It is also worth reminding readers that skilled migrants seldom compete with the unemployed 6.2% - they tend to be un-skilled or semi-skilled.
  • Inflation is expected to remain subdued overall at around 1% but dog with rabies crazy in housing. There continues to be a chronic shortage of new housing supply meaning house values  are expected to continue their seemingly relentless increase by around 10% this year (higher in Auckland and Christchurch). This is feeding through into higher rental prices also.
  • Interest rates are predicted to increase by 25 base points each quarter for the next 5 quarters (starting March). The word is the economy is robust enough with exports booming even with a high exchange rate to offset any inflationary build up. I’d be expecting floating mortgage rates to be around 6.5% - 7% by years end.

Short of any major external shocks things are looking overwhelmingly positive. No one is talking about an overheating economy or boom times but there is a real and broad based momentum that has been building across all sectors and all regions.

This, I suspect, will embolden the New Zealand Government to continue with high skilled migrant pass marks and forcing a majority (note, not all….) of would be migrants to come and find jobs in order to have certainty of residency approval.

Those employers unwilling to recruit form the ranks of those offshore or who refuse to travel overseas to interview and recruit are within the next few months going to be staring into a very shallow pool of local talent. This will have an upward movement on incomes (we are already seeing it in construction and IT in particular).

While no one who reads this who thinks they may make a move this year should take getting work for granted, there is no doubt that 2014 for the vast majority of you will be a year of greater employment opportunities. Through 2013 we saw average times for most clients to find jobs here get down to a few weeks rather than a few months as it was through 2011-2012. If you are fluent in English, skilled, do your research on demand in the labour market for your skills set and are willing to get on a plane and get here, chances are you’ll find work within 4-6 weeks.

As we reported in December the Government has closed the Long Term Business Visa or self-employed pathway to residence while they think about a new ‘improved’ visa class for Entrepreneurs which they hope to launch in April. We have been offered an outline of the new criteria which we have agreed will remain confidential but what we can say without breaking those confidences is that the new criteria is less a pathway for the self-employed to demonstrate financial self-sufficiency to a move to focus on greater job creation and export related businesses as priority for approval. For the first time the amount of funds invested comes with a minimum and the more invested the higher the chances of success. In essence what we will gain is effectively a new sub-class of Investor – lower investment thresholds than those who apply to many looking to secure residence under the Investor Categories but a much higher threshold than historically in place for the self-employed. As always there will be winners and there will be losers.

Skilled Migrant Category also underwent its standard three year review during 2013 and I expect we may see changes this year. My own view is the changes will be minor (why change a formula that appears to be working?). My only two suggestions to Government were that we should be more prescriptive in regard to English language as the Australians are (better your English the higher your points) and I would also be re-instating points for those with capital they can transfer to New Zealand. Although it is proven that those with more money find it easier to settle I cannot see the Government taking me up on this suggestion; they might on the English language however. We shall see.

I head overseas today for the first round of seminars for 2014 and will be in Singapore this weekend, Jakarta next weekend and Kuala Lumpur the following. The seminar in Jakarta is now fully booked.

My colleague Paul will also be in South Africa in early February kicking for our first round of seminars there.

It is going to be a big, exciting and nerve wracking year for some of you as you pack up and join us here in New Zealand. For some 2013 was the moving year and 2014 will become the year of return to some sort of normality. For others 2014 will be the year of the ‘big decision’ to migrate or not. Wherever you are on that spectrum the Immagine team and I wish you every happiness and success for the year.

Until next week

Iain MacLeod

Southern Man – Letter from New Zealand


Matariki and Big Weather

Posted by Iain on June 21, 2013, 5:15 p.m. in Living

I often say that in New Zealand we have big weather. Not bad weather, big weather…..although having just sat through a week of monsoonal thunderstorms in Kuala Lumpur we aren’t the only ones who seem to be the recipients of major weather events. 

Three months ago virtually the whole of New Zealand was stricken by drought which for many areas was second time in three years. ‘Rain’ the farming folk cried. No, the ‘Townies’ cried back in unison. In a case of those that work the land needing to be a weeny bit careful what they wish for someone listened or winter just arrived on time and with it, much needed rain.

Typically for this hyperactively meteorological  country of ours in the past ten days it hasn’t just rained in parts, it has been positively biblical.

In recent days many parts of the east coast of the South Island have been absolutely pummelled by torrential rain causing widespread flooding in the hapless Christchurch (what did those people do wrong??) and we have had our fair share of that up here in Auckland.

Many South Island rivers have been running at record or near record levels. Bridges have been damaged or washed away, landslides have taken out houses and farm buildings (and at least one unlucky resident) and many roads have been rendered impassable.

Just as the rain eased off, straight out of the Southern Ocean came the first of the winter ‘polar blasts.’ This extreme weather event (extreme even by our standards) is as you read this sliding up the country. Three days ago in Auckland it was still very pleasant 19 degrees. Today we are expecting a high of 13 degrees. With the wind chill it is apparently going to feel colder.

Which is still positively tropical by comparison to the old gold mining town of Ophir which lies nestled in the high country of Central Otago where overnight they were expecting a high of – 20 degrees. I kid you not. Can you imagine how cold that is? I guess you could if you were a Russian or an Emperor Penguin. This part of New Zealand as I have written about before holds the dubious honour of being the hottest in summer (with temperatures often in the low 30s through January and February) and the coldest in winter (don’t they know it – summer must be but a very distant memory now!).

Heavy snow has been blanketing the bottom of the South Island and its east coast. In many places over 30cm has fallen in less than 24 hours. Now I don’t know if that is a lot or a little with Auckland being too far north for snow but those interviewed have said it is the biggest snowfall in living memory for many. Judging by some of the photos I have seen today of cars buried in the stuff it appears to be quite a lot……  The only people rubbing their hands together in glee (if not just to stop frostbite) are the ski field operators (there are 13 commercial operations in the South Island). It might be a bumper season for them.

Snow has also been falling on the higher ranges of the North Island from Taupo south as well today and there is more to come tonight I understand. 

Wellington woke up this morning to a battered city after a torrid night of weather. The winds there can be strong at the best of times but they apparently have been having gusts of up to 150kph. To give some indication of the ferocity of the winds one of the Cook Strait Ferries (these are ships we are talking about) was ripped from its berth last night.

The swells at the entrance to the harbour were running at 6 metres in height at 4pm yesterday. By 5.30pm they were 12 metres high and today 15 metres. That is no typo. I saw a movie a couple of weeks ago on a plane that was about the 2004 Boxing day Tsunami and that wave was half the size of these monsters.

We are told that Auckland can expect gale force winds tonight (not here yet) but right now we are sitting under a blue sky after some pretty intense thunder and lightning last night.

The seeming never ending summer that just went on and on and on without clouds or rain, of sitting in the deck chairs spraying liberal amounts of mosquito repellent after work sipping a quiet beer before slipping off for a quiet fish on the weekends  seems a lifetime ago.

It is of course the shortest day tomorrow in the southern hemisphere and the reason why we are getting this typically wintery weather (although this really is big even by our BIG standards). While we have no cultural festival associated with the shortest of days increasingly New Zealanders are adopting and identifying with the local Matariki Festival which sees Maori celebrate the return to our skies of the star cluster they know as Matariki but which is also known as the Pleiades or Seven Sisters.

Matariki represents the beginning of a new life cycle and traditionally was the start of the Maori New Year.

I could really adopt it as my New Year as well. It seems somehow appropriate for those of us in the southern hemisphere for the same reason that New Year is in January in many parts of the northern  hemisphere.  From tomorrow the days will lengthen by a minute or two a day. The shorter nights signal a new beginning and new life will in a few weeks spring forth with seed germination and planting of crops. It reminds us that spring is not too far away. That is if spring isn’t blown to Kingdom Come by the gale force southerlies!

I can understand why the Europeans have their New Year when they do – it just seems wrong to me for us to have it in the middle of summer. Doing it now makes so much more sense.

Traditionally during Matariki great banquets were held in celebration of the New Year and the future. Gifts were exchanged. It sounds very much like a European Christmas doesn’t it?

I am off to rug up, get the fire on and enjoy what might just be the biggest weather weekend of the year!

Don’t forget readers in South Africa I am heading your way on Tuesday for a round of seminars across the country. If you know anyone that might wish to join me for an insight into the weather and more, please tell them I am coming. They can register online for a seminar near them.

Until next week

Iain MacLeod - Southern Man

Tags: lifestyle | housing | auckland

NZ - An American Perspective

Posted by Iain on Feb. 15, 2013, 6:52 p.m. in Living

I wouldn't usually reproduce someone else's blog piece but this week I am going to (and I hope the author doesn't mind). I do so in response to some pretty vicious and defamatory comments posted last week on the Letters from New Zealand blog site. Most posts I took down - anything defamatory will always be removed especially when the person is too cowardly to put their real name and email address to it.

I am however all for adult and respectful discourse so I left most of them up even though they will fail statstical or half intelligent scrutiny. The ones that ran down New Zealand as 'third world', 'a shithole', terrorised by urban gangs, suffering a youth drinking culture (that part at least is true), terrible child abuse statistics, high cost of living, low wages etc I left up. After all I have nothing to fear from such opinions - I am the guy who leads a team of Consultants who stand up at seminars around the world and warn people to be careful in their expectations of this country or any other. To do their homework, establish their employability, visit if they can and make a balanced decision in the full knowledge nowhere is perfect and the migration process comes with no guarantees. I hear myself at every seminar say up front and openly 'I don't live in paradise, I live in New Zealand'.

There will always be contrarian views - some migrants do view New Zealand as heaven and others hell. Most fall somewhere in between.

In the interest then of other perspectives read this from a US based blogger comparing his country with New Zealand and he draws on real, verifiable statistics.

 

Written by Nonny Mouse from American blog 'Crooks & Liars'. 

We Americans like to think, and in fact have been indoctrinated for decades to believe, that we are the greatest country in the world, the best at just about everything. Sadly, that hasn’t been true for quite some time. Words patriots once gave their lives for, like ‘freedom’... and ‘patriots’... have become almost meaningless.

So if you’re curious about who’s taken our crown, you might be surprised. The latest international index of 123 countries released by the Fraser Institute, Canada's leading public policy think-tank, and Germany's Liberales Institut, ranked New Zealand number one for offering the highest level of freedom worldwide, followed by the Netherlands then Hong Kong. Australia, Canada and Ireland tied for fourth spot. The survey measured the degree to which people are free to enjoy classic civil liberties - freedom of speech, religion, individual economic choice, and association and assembly - in each country surveyed, as well as indicators of crime and violence, freedom of movement, legal discrimination against homosexuals, and women's freedoms. Pretty extensive stuff.

The United States tied Denmark for seventh. We didn’t even get bronze.

As for the idea that the United States is the envy of the world when it comes to free markets and business? Wrong again. The U.S. continues to lose ground against other nations in Forbes’ annual look at the Best Countries for Business. The U.S. placed second in 2009, but in 2012 it ranks 12th, trailing fellow G-8 countries Canada (5th), the United Kingdom (10th) and Australia (11th) The world’s biggest economy at $15.1 trillion scores abysmally when it comes to trade freedom and monetary freedom.

So, who did top the list for the Best Countries for Business?

New Zealand. New Zealand can boast a transparent and stable business climate that encourages entrepreneurship. New Zealand is the smallest economy in the top 10 at $162 billion, but it ranks first in personal freedom and investor protection, as well as a lack of red tape and corruption.

Okay, so at least MIT is still the best university in the entire world, we’re still first at something...Well, according to the Association of American Colleges and Universities, there are two thousand six hundred eighteen accredited four-year colleges and universities in the United States, most of which operate privately or as part of state governments. Only fifty-four of these are in the top 200, very slightly over 2% . So who does top the educational rankings?

That would be New Zealand again, first in the world on the basis of performance in three areas: access to education, quality of education and human capital.

The annual QS World University survey ranks institutions based on scores for academic reputation, employer reputation and how many international students it has, among other things. Up to 20,000 universities from around the world were surveyed to find the top 700 academic institutions from 72 countries, the best universities in the world.

New Zealand has eight universities nationwide, with slightly less than around a half million students. According to the QS World University Rankings, two of New Zealand’s universities – Auckland and Otago – rank in the top 200 of the 700 best universities in the world, and Auckland in the top 100 (83rd and 133rd respectively). That's 25% compared to the United State's 2.06%. All eight universities rank in the top 500, with Auckland University of Technology appearing on the list for the first time this year. That’s a 100% rating.

Even when New Zealand isn’t top of the list, they’re outranking and out-performing the United States on just about any index you want to consider. How about the environment? According to the Yale University and Columbia University 2012 Environmental Performance Index at the World Economic Forum, ranking 132 countries, New Zealand placed 14th in the top 30. The United States trailed at 49th.

We rank top of the list for the most expensive health care system in the world, but dead last overall compared to six other industrialized countries - Australia, Canada, Germany, the Netherlands, New Zealand, and the United Kingdom – when it comes to quality, efficiency, access to care, equity and the ability to lead long, healthy, productive lives.

There are a few other things the United States tops the charts at: We’re fifth out of the top 25 countries in the world in terms of crime rate. New Zealand is 24th.

Auckland is ranked the third best city out of the top five for quality of living, after Vienna and Zurich, nothing in the United States making the list at all. Even when it’s just the Americas being ranked for quality of living overall (taking New Zealand out of the equation altogether), the top four cities are all in Canada, with Honolulu coming 28th.

Don’t even get me started on the All Blacks.

One of the smallest countries in the world is kicking our ass when it comes to actually living up to the standards we Americans pretend we still have. Isn’t it about time we stopped kidding ourselves, stopped living on past glories that mostly never were, and started actually trying to be at least as good as one of the smallest nations on earth?

Blog Ends

 

So I am not the only one that thinks New Zealand is doing okay.

Until next week

Iain MacLeod - Southern Man


Teenagers, House Values and Interest Rates

Posted by Iain on Sept. 21, 2012, 12:44 p.m. in Living

You have no reason to be aware but I am the father of two teenage boys, one who just  turned 19 and the other 16.

I have been giving a lot of thought lately as to how these two sons of mine might be able to enter the Auckland property market in the coming years given the seeming relentless rise in residential property values in this city.

There are now 11 suburbs in Auckland that have reached a median value of NZ$1 million with one now sitting at a median sale value of $1.9 million which could well make it the first to top $2 million in the coming months. 

Across the entire city the median house price has climbed to $505,000.

This compares to a national median price of $387,000.

Given the average salary in Auckland (before taxation) is $75,000 this means the median house now costs 6.6 times the average salary. 

My eldest son is in his first year of University. I hesitate to call him indolent but he did decide to give up his part time job a couple of weeks ago to ‘enjoy the holidays’ (oh my, to have the choice, the confidence and not a care in the world….) we have had a discussion about the future. House prices. Debt.  That sort of thing.

We have this thing in this country called interest free student loans. I’ll give my son some credit – he must have listed to something when studying Economics – he seems to understand  that if he borrows the $170 odd a week the Government allows him it is a loan and it does need to be paid back. The risk is it does appear to be cheap easy money which does, when you are 19, look rather attractive.

However I have suggested to him that if he does not change his attitude fairly quickly he will likely leave university in three years time with a student debt of between $10,000 - $30,000. Most of this I hasten to add will not be course fees which average $3000 - $5000 a year but beer and night clubs. I know, I know, but I can only tell him – we were all teenagers once and we also knew everything, remember??

Given most University graduates start with salaries of $50,000 - $60,000 and they need then to start paying back their student loan it seems without parents coming to the rescue with a deposit on even a modest house in a modest area (they do exist in Auckland but are usually a long way out of the central city –away from the clubs and bars……) home ownership might simply no longer be possible for many of our young people.

So what is causing this rise in value given it seems to be only happening in Auckland and to a lesser extent Christchurch?

There are a number of factors:

Record low interest rates.  Floating mortgage rates are currently around the 4.95% – 5.05% range and the banks are lending aggressively once again.

Migration – both internal from other parts of the country and migrants arriving from overseas – Auckland is where most find work and settle.

Lack of supply – we are simply not building enough houses and demand is outstripping supply

What is really interesting about all of this is that in his farewell speech (and final monetary policy update) the outgoing Governor of the Reserve Bank last week signalled that notwithstanding the house price inflation in Auckland this is not putting significant upward pressure on overall inflation within the economy. At just  1% and not growing he believes that this is because most New Zealanders who own property (only one third of whom have a mortgage over their property) are (funnily enough) highly geared so they have cut back on discretionary spending. I for one am not surprised. With the size of many of the mortgages people have in this town I am surprised that they can afford to eat!

By 2014, perhaps because of an expected closer alignment between supply and demand in Auckland and given that net migration (from overseas) is running around zero, the Governor sees house price inflation falling to zero.

And Christchurch? 

In the past year median prices in Christchurch have jumped by $15,000 to $371,600. 

Why are house prices there in something of an upward spiral – albeit they are starting at a far lower base than Auckland?  In a word – earthquakes. The earthquakes of early last year and late 2010 caused a real supply issue and people on the move are competing for stock that is limited. There are simply not enough houses to go around and as people ‘migrate’ from the damaged eastern suburbs to the hardly touched northern and western suburbs there is quite simply not enough decent housing to go around. As the rebuild gets underway as more land is opened up for residential development the pressure there should ease.

In Auckland that $371,600 would buy you something extremely modest in a part of town most people would be looking to leave.

The house price ‘boom’ however is largely restricted to Auckland given the rest of the country is busy paying down their own debts. Hence inflation not being an issue in the country.

While all this is going on the banks remain flush with money and are all marketing home loan products aggressively. Most are back to lending 95% of the property value. 

It is my view that interest rates in New Zealand will over the next 12 months will fall further. At the very least they will not rise significantly for some years.

As the Americans, Brits and Europeans continue to print money, our dollar has risen to heights simply not supported by the fundamentals of the economy. Of course it is keeping import prices, especially petrol and imported machinery and consumer goods lower in price (there are always winners and losers with currency movements)  but it is hurting exporters who mostly trade using the Greenback.

Of course China is also now set to once again to inject billions into its own economy as it cools given  demand for its manufactured goods fall, especially in Europe. And that isn’t the greatest news for New Zealand as China is now our second biggest trading partner after Australia and Australia’s mining boom is clearly over (as the Chinese import less of their dirt).

So my pick is our new Governor over the next few months will be forced to act to try and bring down our dollar and he only has one tool at his disposal to do so – interest rates. With an Overnight Cash Rate (effectively the wholesale rate) sitting at 2.5% our currency remains attractive to the Japanese, Americans and Europeans because our banks will still pay 3-4% on retail deposits which is three to four times what they are getting at home. While it is a vote of confidence in the economic stability, management and future of our economy it is hurting our exporters.

In my opinion the Governor will be forced to move within 6-12 months and that will lower interest rates further but not spark inflation. 

I see the Government making no moves to introduce a capital gains tax (that’s right, unbelievable as it might sound  we do not have one), stamp duty or other disincentives to keep the residential property market under control in this town. Perhaps they are right in relying on the market to control the fever and perhaps the market will sort things out. 

A former client of mine (she of the finest set of pins I have ever laid eyes on - former tennis professional) and her husband just sold a house in a suburb that is ten minutes drive from downtown Auckland. In 1996 the median house price in their suburb of Westmere was a little over $350,000. They just sold theirs for $2,250,000.00 They had paid $932,000 in 2009 and have apparently carried out ‘extensive renovations’.  A rough guess tells me that would likely be around $500,000. So a non-taxable profit of around $800,000 for three years work. And these stories are common.

If I am right then house prices in Auckland will continue their upward climb. Across the rest of the country outside of Christchurch they won’t.  Given house values in Christchurch by Auckland standards are ludicrously cheap and real estate in Wellington, Dunedin, Tauranga and Napier all look like bargains to we Aucklanders,  for most migrants (and University graduates) housing will remain affordable if they don’t settle here or they bring some money with them. 

Aucklanders however will continue to wallow in private debt. The rest of the country won’t.

The implications of course for my children are as stark as they are for many migrants who will be joining us here over the next 2-4 years. Migrants from countries like South Africa will simply not be able to afford homes and will be renting forever if they are earning salaries of $50,000 odd a year and living on one income in Auckland. 

Anyone that does not land here with at least NZ$100,000 in their pocket will struggle to save enough to put down a deposit on that middle class ‘median’ three bedroom  Auckland house if they earn that sort of money. And plenty do – Artisans, Technicians, Personal Assistants, graduate Nurses and  graduate Teachers all earn that sort of annual salary. If both partners are working you can save and will get onto the property ladder as overall New Zealand is generally cheaper than somewhere like South Africa or even Singapore. If however you stop to have babies or one of you gets sick then you will be renters for a long time.

If only I could make my 19 year old son see all of that.

Until next week

Iain MacLeod

Southern Man


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