Exodus boosts house values

Last updated 05:00 23/10/2012
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Earthquake-weary Cantabrians escaping to Auckland have pushed up house prices in some of the country's most expensive suburbs.

If Aucklanders struggling to save for a house are rattled by that, they can take comfort from the fact the migration north is also likely to boost the economy of New Zealand's largest city.

A report written for the Auckland Council by think-tank NZIER concludes that those who shifted from Canterbury to the City of Sails were largely skilled, high-income and wealthy.

In the report, NZIER principal economist Shamubeel Eaqub said Auckland's economy had been affected by the Canterbury quakes.

"The impacts will reverberate for some years to come," he said.

The movement of Canterbury residents was the most immediate of those impacts.

Inland Revenue data released under the Official Information Act and collated by Eaqub showed 3755 "tax addresses", which do not necessarily include children, had moved from Canterbury to Auckland between March 2011 and July this year.

Nationally, 14,800 tax addresses shifted out of Canterbury. In the same period, 8209 tax addresses moved into the province, he said.

The top 10 Auckland suburbs southerners had moved into, and in which they had affected house and rental prices, were Auckland Central, Kingsland, Albany, Glendowie, Murrays Bay, Mt Albert, Avondale, Mt Eden, Epsom and Onehunga. Remuera was not far behind that.

"The large influx from Canterbury added to strong international migration flows. Consequently, rents and house prices have risen at a fast pace," Eaqub said.

Real Estate Institute of New Zealand figures gave an average house price for those suburbs of $611,000 in the three months to August, compared with $475,000 for the rest of Auckland.

The average for the same period in Canterbury was $335,000.

"The people who emigrated from Canterbury appear to be those with transferable skills, high incomes and wealth. The cost of housing in the suburbs the migrants moved to is around 25 per cent higher than the rest of Auckland," Eaqub said.

"Second, there was a surge in Auckland business and financial services jobs following the earthquakes.

"If these skilled, high-income and high-wealth people are retained in Auckland it will boost regional economic performance."

Eaqub warned that any rebuilding delays in Christchurch would work to Auckland's advantage.

"Longer term, there is an opportunity to attract investment capital from Canterbury to Auckland," he said.

"The main drivers will be a smaller Christchurch CBD leading to surplus capital, and continued delays in construction work discouraging some investors.

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"Some property owners may choose to reinvest their funds elsewhere. Auckland is then an obvious choice."

Auckland construction costs would rise if there was an exodus of construction workers south.

"The net impact on the Auckland economy is not clear yet. The complexity ... means that it requires careful monitoring," he said.

"There are risks, but also many opportunities, from the inflow of people and money."

- The Press


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