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Auckland’s migration boom (part 1)

New Zealand’s migration boom is still going. Honestly, I thought it would have been tailing off by now. I don’t think anybody thought it would last as long, or go as high as it has. This boom is unprecedented – it’s broken records for the last 17 months in a row.

New Picture (3)

There’s been plenty of media coverage of the boom, but I want to explore a few points which have been overlooked by most people.

Looking at the headline stats, you could be forgiven for thinking that Auckland gets less than half of NZ’s international immigration, with Auckland apparently getting 30,000 out of “a record net gain of 64,900 migrants in the December 2015 year”, or 46% of the total. These results, what I’ve called the “raw” results, are shown below:

New Picture

However, the way Statistics New Zealand reports these figures is a bit odd. They don’t impute missing data, meaning that when someone coming or going doesn’t specify a New Zealand region, they don’t get assigned to one. This substantially understates the true amount of net immigration to Auckland. I’d estimate the true figure to be more like 38,300 in the last year, or 59% of the national figures.

Those are really big numbers, because in a typical year Auckland’s “natural increase” (births minus deaths) is around 15,000.

Around 17% of immigrants don’t fill out which region they’ll be moving to, and 10% of emigrants don’t fill out which region they left from. It’s understandable that immigrants may not have the clearest idea where in New Zealand they want to live, but the figure for emigrants is high too. Perhaps we just have lousy handwriting?

Anyway, those missing figures turn out to make quite a big difference. Quoting from the Stats NZ page again:

“Just over half of all arrivals who stated an address on their arrival card indicated they would reside in Auckland. Of those who stated an address on their departure card, 42 percent were migrating from the Auckland region. In comparison, the Auckland region is home to 34 percent of New Zealand’s population (at 30 June 2015)”.

The number of people arriving is currently much larger than the number leaving, (giving high ‘net’ migration). The people arriving are also less likely to say what region they’re moving to. These factors combined add up to a big understatement of how much migration Auckland is getting.

I’ve ‘scaled’ the Auckland migration figures in the graph below, allocating migrants who didn’t state a region to Auckland in the same proportions as those who did state a region.* The NZ figures are still the same, but the Auckland ones (blue line) have changed.

New Picture (1)

What can we take from this?

  1. Net international migration into Auckland is much higher than most people think.
  2. Over the last 25 years, Auckland has always gained more people from overseas than it has lost, although there have been times when that gain is very small.
  3. The picture is very different for the rest of the country. In the 23 years from October 1990 to September 2013, New Zealand excluding Auckland averaged just 9 net migrants a year. The regions fluctuated between gaining people and losing them, with the years of gains cancelled out by the years of losses. The current boom is going some way to changing that.
  4. We’re not building enough new homes for all the new migrants coming to Auckland, and therefore some of them will be displacing people already here – they’ll most likely be moving to nearby regions like Bay of Plenty, Waikato and Northland.
  5. This continues a long-running trend of Auckland losing people to other parts of New Zealand on a net basis (i.e. net internal migration has been negative, although net international migration has been positive).

My next post will look at international students – they’re a big factor in the current migration boom.

 

* This scaling should be reasonably accurate, and I’ve checked it against another source. One of the questions in the census asks people where they were living five years ago, with one of the answers being “overseas”. And for the 2013 census, 46.3% of the people who were overseas in 2008 were now living in Auckland. My scaled data shows 47.3% of international arrivals settling in Auckland over the five-year period, a pretty close match. This is for arrivals of course – there’s no way of checking it for departures.

91 comments to Auckland’s migration boom (part 1)

  • Early Commuter

    I’m not anti-migration, BUT…
    because demand is so high, we have missed a trick. We could have increased the requirements for immigrants (higher points, more qualifications, more investment $$$) and thus ensured a lower stream of migrants (less pressure on housing stock and services) and yet the same if not greater economic benefits.

    It’s a bit like a good university. If you have to beg and scrap for every student, hitting a target is difficult. But if you are a well-regarded place, you can enrol enough students while increasing your entry standards, leading to an overall smarter student body.

    • jezza

      Firstly, I imagine a significant proportion would be returning New Zealand citizens. I believe this is actually the biggest driver of the current spike.

      Secondly, given immigration tends to fluctuate over time, wouldn’t it make more sense to leave the threshold for entry into NZ at a consistent level and let the fluctuations deal with overall numbers. Applying your suggestion would mean in the future when immigration falls away again we might have to lower the threshold below where it currently is, reducing the ‘quality’ of immigrants.

      Of course if the growth in migration is a long term trend, then I completely agree we should increase the thresholds, but I doubt this is the case.

      • Early Commuter

        I’d say an annual review of criteria would be sufficient.

        • jezza

          ***** comment edited to remove racism***** mods.

          If the problem is housing then it should be dealt with through housing solutions that are more agile than what we currently have. Governments meddling around with other factors, such as population to solve single and often transient issues, such as the current housing situation generally doesn’t work out well.

        • jezza

          Guys, I think you are a bit sensitive with the moderation, there was no reference to race at all in my comment. Although, I accept I wasn’t clear what I meant by quality, I was simply referring to migrants that have a greater level of skills and who we might expect to score more points in the application process. I’m generally in support of immigration, which I hope my posts are showing! Anyway I’ll have another crack:

          EC – I would argue that maintaining a consistent level of immigration threshold is better in the long run. Otherwise we would have a situation where during a boom, we wouldn’t allow people we would normally say meet the criteria to enter NZ, while during a lull in immigration we would allow people in who we would normally say don’t meet the criteria to enter NZ. This may well result is skills that don’t necessarily match where our shortages are.

          • jezza prob is that history doesn’t actually support your ‘quality’ idea. Often people with absolutely nothing, not even the language, are the ones that make the biggest effort and commit most thoroughly to their new home nation. That whole rag-tag army of impoverished european refugees that arrived at Ellis Island produced some of the greatest Americans there have ever been… and remember Italians, Irish, and Jews were considered by the established US citizens to be as foreign as Syrians or Somalians now… I reckon up the refugee quota rather than try to get more software engineers or whatever someone thinks we lack. Steve Jobs, famously, was the son of a Syrian immigrant….

          • How about looking at it another way. Have a points based system that meets the thresehold for “high quality” immigrants that never changes. Within that system have bonus points for skills (education, job experience etc) that are currently in short supply locally and can be changed on an as needed basis (annual or whatever suits). This keeps a stable system that can dynamically be changed based on what is needed. And if immigrants are meeting the “high quality” level then we probably want them no matter the current economy.
            Additional thought, add points for people that are prepared to live in places other than Auckland (and perhaps other major centers). Obviously once those people have reached permanent resident status they can move wherever they like.

          • Sailor Boy

            You realise that is literally exactly the existing system?

          • Stu Donovan

            Great idea!

            Awww snap. I just realised that’s basically how our current immigration policy actually functions.

            P.s Immigration is not the root cause of Auckland’s problems with house prices, which are instead 1) low elasticity of supply due to restrictions on density and 2) tax incentives that favour property investment.

          • jezza

            Patrick – I couldn’t agree more. I think our current refugee quota is embarrassingly low to be honest.

            Others – yes, I’m aware that is our current system, my issue was with the idea of making short term adjustments to deal with single partially related issues such as housing, thankfully our politicians have stayed away from that so far.

  • The obvious solution is to cap international migration into Auckland, to a level that existing and under-development infrastructure can accomodate. Applicants beyond that should be required to go to the regions or stay away. The problem is that the world runs on greed, so population increase and 3% compound growth in consumption of everything is encouraged, in order for profits to keep growing.

    Unless humanity turns things around and adopts a new zero-growth mantra, not ruled by economics, the future of this planet is stuffed.

    • jezza

      Would this be for life or would the additional immigrants be free to live in Auckland once they gain citizenship? Would be reasonably draconian to restrict an NZ citizen from living in a particular part of the country.

      Also are you suggesting you are happy for immigrants to move to Hamilton, Tauranga or Christchurch and contribute to sprawl that is gobbling up very productive land around those cities?

    • Peter Nunns

      It’s easy to say that other people should bear the cost of any reduction in consumption growth. If you’re exceptionally smug, you could even call them “greedy” for wanting to raise their standard of living.

      However, talk is cheap and actions are hard. The fact is that the median NZ household (earning around $68,000, with a bit under 3 people) is well within the top 8% of the global income distribution. If we wanted to cap global consumption without being dramatically unfair to the bottom 90% of the world income distribution, it would mean dramatically *reducing* consumption for the average NZ family.

      Are you willing to endorse that? More to the point, are you willing to live it yourself?

      • Early Commuter

        What goes on outside NZ is utterly irrelevant. The role of the NZ government is to maximise the utility enjoyed by NZers. Sometimes that can mean providing overseas aid and charity (as otherwise conflict may develop that harms NZ), but worrying that poor NZers are rich by global standards is pointless.

        • Chris R

          If we don’t sort out global problems (like the planet’s inability to sustain continually increasing standards of living for everyone) on a global level, that will have a fairly drastic impact on NZ’s overall utility within the lifetimes of people alive today. If we don’t sort them out in a way that’s fair to everyone, we get conflict. The NZ government absolutely should be thinking about global problems. Whether NZ can do much to solve those problems is another question, but we should try, on utilitarian as well as moral grounds.

        • Bruce

          +1 EC. NZ doesn’t need to import problems. If the rest of the world goes to hell in a handbasket so be it. Unless there is a nuclear war or China decides to invade (actually rather than by stealth as it is with the number of Chinese now in NZ) then we will still do alright in our little corner of the planet. Many other countries don’t have that luxury.

          • bjfoe

            If we’re going to be selfish then let’s do it properly. Talent is everything in modern economies and Auckland is well positioned to attract it thanks to regular appearances on the top 10 liveables list. A side effect will be the exclusion of locals who don’t cut it – people on low incomes will be forced out, and legacy residents will gradually decline as they cash up and move, or die off. We’ll know that we’ve made it when people throw eggs at the Xero commuter bus.

            So perhaps the key thrust of the unitary plan shouldn’t be to make it more affordable for all but to ensure Auckland doesn’t become too unattractive compared to other liveable cities in terms of living costs.

            (/s in case it wasn’t obvious)

        • Peter Nunns

          Geoff was taking a global view – “humanity” not “New Zealanders”, and “the planet” not “New Zealand”. So I think my response was entirely fair.

          In any case, I’ve never really liked the idea that we are morally obliged to care about people with one passport but not people with another one. As Fugazi say, “we draw lines and stand behind them / that’s why flags are such ugly things”.

    • Thomas

      As a migrant of 10 years I can tell you this – if I couldn’t settle in Auckland I would never have migrated to New Zealand. Simple as that. I suspect a significant portion of potential migrants feel the same.

      Auckland is the only ‘true’ city in NZ. Otherwise most people would have head to the big cities of Australia.

  • Greg N

    Interesting on the comparison of natural net increase (births minus deaths) with net migration.

    We’ve always been told here on ATB and elsewhere that natural increase is the larger of the two sources of population increase in Auckland.

    Yet, this scaled graph indicates that international migration is the in fact the same, if not the larger, and it has been like for some time now – since 2001 on thatgraph.
    and by a factor in the current situation, 2 to 3 times more which is unprecented.

    Its important as to that split (and not for Xenophobic purposes) as new (and internal/domestic) migrants have a bigger requirement for additional housing stock.
    Babies tend to be born into a house that can “fit them in” and so you don’t need a new house for every new baby born.

    But you sure will need a new house for every international or domestic migrant and their family to live in.

    Now I know the next post is on international students and they do have a big impact as to where they live and study, and how long they stay – and thus their housing demand profiles.

    I think that the planners definitely appear to have been caught well short on the planning front as to the exact source of and ongoing drivers for Auckland housing demands by accepting the Stats NZ figures as the gospel on whats happening out there.

    Given we’re already well behind the 8-ball on adding sufficient houses to the housing stock each year [and have been behind for years now], and even with record building consents we’re still falling behind those modest projections.
    There is no clearing the backlog of unbuilt housing, and the tide of demand is still rising. Its no wonder the housing shortage is now so urgent.

    But I think it could have and should have been seen as to what was going on.
    And if needed, levers on the immigration system adjusted to better moderate the inflows – at least til the backlog is looking to be back under control.

    • Peter Nunns

      I took a comprehensive look at this recently. The last few years have been exceptional, but they are not representative of long-term trends: http://transportblog.co.nz/2015/11/25/why-is-auckland-growing/

      • Greg N

        Your graphs used the uncorrected numbers by the look of it?
        So if you compare your posts graph, red bars with Johns corrected net Auckland migration line, you find Johns is consistently higher.
        In fact in Johns graph there has been no year where net migration was negative for Auckland, but your graphs says there were.

        I’m not saying natural increase is not important, it is, but what it also appears is that its effect is less of a driver than had been assumed from looking at Stats uncorrected numbers “as-is”.

        Even if international migration its a tiny few percent different (higher) than the number your analysis, that surely equates to a huge [un-detected] demand factor for housing does it not?
        Especially at a time when we can’t manage to build the number required just to keep “treading water” – 13,000 measly new dwellings a year currently.
        Even adding another few thousand more (from migrants not counted as arriving in Auckland each year) to that demand side has a real impact surely?

        • John Polkinghorne

          Hi Greg, to clarify, I haven’t looked at “natural increase” in this post, so I’m not comparing them in terms of what percentage of growth is from natural increase and what is from migration. Plus, to complete that analysis you’d also need to look at Auckland’s *domestic* migration flows, which are generally negative i.e. outwards to other regions.
          Stats NZ do make “population estimates” and they show how much growth is estimated to come from natural increase vs migration, but they don’t distinguish between international and domestic migration. I’m sure they would scale those figures, though, so they should be reasonably accurate.
          Generally, as Peter says, the majority of Auckland’s population growth would be from natural increase, but migration is still quite significant, and with the current boom it’s the majority of our population growth. I don’t expect that will last forever though.

          • Greg N

            John and Peter, I understand the purposes of the two posts.
            However, your comment that natural increase is fairly predictable and understood at about 15,000 a year is about right. So you and Peter concur.

            What I’m getting at is that with the current housing “crisis” (Herald and Politicians word not mine), there seem to be a constant and consistent undertone of “having been taking by surprise” in everything they say and do about it.
            This is from the Head of the Reserve Bank on down. Everyone in Government and its ministries seems totally surprised about the ongoing immigration boom, and its effect on housing demand, they even deny in some cases that the two are linked in any way.

            So the question becomes, why has this current situation caught them so totally unaware and unprepared, what “Black Swan” events are they overlooking here.
            And is the way the raw version of the Stats NZ NZ Immigration figures for Auckland are being used (and abused) part of the problem?

            The root of the housing issue is simply too few of the right type being built, for whatever reason. But is part of that not perhaps that the demand has been consistently underestimated by all those charged with having a good grip on such numbers?

            It just seems to me that someone has been asleep at the wheel and I don’t think its yourself John, or Peter who is at fault. But you are showing up a difference in how the numbers are presented.
            And I am just wondering aloud if that isn’t showing that “the canary down the mine”, just died, so maybe we need to do something before we too are overtaken by events?

      • Peter yes true, however what extrapolation of trends is incapable of discovering is discontinuity. And given that the thing that has really changed is the sudden failure of Aucklanders and New Zealanders to leave so enthusiastically we may, just may, have a big ol’ discontinuity on our hands. And they do happen. I’m picking a secular shift in demographics in Auckland’s favour. And i reckon the reason is that AKL has suddenly and recently become significantly less shit than it was previously -> it’s simply somewhere more people want to live; by both staying and arriving.

        So much so that this pair of muppets have turned up here from the UK feeling confused, they want to be here but not if anyone else like them does: “It’s not what we wanted. We feel so entirely duped by the council.”

        “We wanted a backyard for our children to play in, and that’s now going to be towered over by an apartment building,” said Ms Macky. Of course they either are very dim or have been led up the garden path by the 2040 crooks about what is possible over their fence. Note, of course, it is driving that they hate, yet the want planning rules that make more driving everywhere certain.

        Te Kuiti looks good…?

        http://www.radionz.co.nz/news/regional/296138/owners-feel-'duped'-over-housing-plans

    • Bruce

      +1 it is out of control and Kiwis are the ones paying the price for this. The Governments responsibility is to the people of NZ…NOT to raise the living standards of others looking to move here or to provide a safe haven for their money laundering. NZ has slipped down the world corruption rankings list…. I wonder why……….

      • stu donovan

        Migrants are not the problem. The real problems is NZ’s inability to address issues with 1) low elasticity of housing supply (largely due to restrictions on density) and 2) tax structures that favour property investment.

        We have known about these issues for 5-10 years at least, yet done very little about them. The cause of these problems is not migrants, it is NZ’s inability to implement the necessary policy reforms. Labour and National Government’s are complicit in our current housing predicament.

        So focus your energy on those things – which are the underlying systematic causes of the problems we face – rather than some peripheral thing, like net migration. The latter is very difficult to control effectively, and ultimately leaves NZ much better off as a country by addressing the critical demographic imbalance that we have.

      • Peter Nunns

        Bruce, you have been warned before about implying that immigrants are corrupt or socially destructive. As Auckland is a diverse city I would expect a significant share of our readers are immigrants, and comments of this nature may drive them away. This is not in accordance with our user guidelines.

        • Scott M

          The problem with arguments put forward by Stu or Peter is the assumption that if you relaxed planning controls the supply issue would resolve itself overnight. You know as well as I do that it will take at least 10 years for housing supply to catch up.

          Further is the cost issue. New migrants put a heavy strain on infrastructure, but as far as I can see our tax system does not require them to pay for these costs? These are transferred to existing residents, which seems a case of “all cost no benefit”

          • The market responses very quickly to the right changes, as we saw in the last apartment boom, so ten years is far too long. And as for your second point; well a migrant is a resident so yes is paying tax and rates like other residents, I don’t why you think they would be exempt?

          • I still think the issue John has highlighted above is not being addressed in the comments. Clearly we are in an anomalous net migration moment, largely caused by people not leaving, the question is, is it a structural change or a ‘blip’?

          • Peter Nunns

            On the housing supply side of the equation, I’d estimate that moving from average to great planning regulations would roughly double our elasticity of supply from ~0.7-0.9 to ~1.5-2. (Based on outcomes observed in US cities.) That would mean that rising prices would tend to provoke twice as much of a supply response.

            We’d obviously also need a few more builders around to actually hammer in the nails and pour cement. If only there were some way for people with relevant skills to move here…

            On the infrastructure side of the equation: under current infrastructure funding models, this is a long-run fiscal question. If our future economic prospects are reasonable, then we should be able to borrow to fund added infrastructure today. Under that scenario, the future users of that infrastructure – including immigrants – will tend to pay back the costs over a period of time.

            And, as Stu’s observed elsewhere in the comments, having more people here earning incomes and paying taxes benefits existing residents as it makes it more likely that their pension will actually be paid.

          • Scott M

            There is no evidence that the market is providing anywhere near enough houses. A sensible approach would be to limit immigration until there is actually evidence that supply side measures are actually working.

            Until then you are just throwing more fuel on the fire.

            With respect to funding measures neither the Council or Government have shown any real drive to loan money for infrastructure, which I agree is more equitable. Funding issues is yet another example of how inept our government is.

        • Ricardo

          Peter you would be unwise to believe that particular groups of migrants from different countries do not bring their cultures and ethical practices with them. Some we welcome. Some we do not.

  • Greg N

    Thinking about the idea to restrict sales of houses to foreign nationals to new builds only as per Australia.
    Would that have worked here? I think its probably way too late in the cycle to find out.

    Because the backlog is now so acute, forcing immgrants to be able to buy only new houses in Auckland as per Australian rules would now cause little but a massive *building* backlog – which we already have.

    And they’d still rent somewhere while they built their house (or didn’t come to NZ until the house was built) so the net effect of that rule would be zero at best and possibly more negative than positive overall.

    You’d think from all those stories you read about hordes of Kiwis deserting Australia to return to NZ that they’d be a real deluge of empty [new and second hand] houses in Australia now.
    Doesn’t seem to be the case though.

    So who knows whats really going on either here in or Aus?

  • bbqroast

    We should zone to make room.

    No part of Auckland should be zoned 1 story, 2 stories at least.

    Nor single home buildings – these just force multiple families into one home. We should allow multi unit buildings across all of Auckland.

    The council should also look to expanding the high density CBD zone outside of Spaghetti junction to make room.

    Finally the overhead costs of subdivisions need to be tackled to enable smaller developments.

    • Early Commuter

      We already have plenty of space zoned for new dwellings – it’s called the regions.

      • stu donovan

        Not feasible for reasons outlined in previous posts. There’s already lots of incentives for people to move to regions: more visa points and cheaper housing costs. If people aren’t doing this now when confronted with these incentives, then it suggests these people really value living in Auckland. And that’s ok.

        If you make them go somewhere other than Auckland, then they’ll choose sydney or melbourne or brisbane. And that’s problematic because in the long run NZ needs these people. The gerontocalypse is happening and we either need to attract 1) lots of young people or 2) fundamentally change the way we finance retirement. Or perhaps a bit of both.

      • nonsense

        i would be the first to go to live in the regions. But to find a job in my field out there is just impossible. Then to find one for my fiancee is even less likely. And most of my friends are on the same situation

        • Thats the point, in a modern economy the high-paying jobs are mostly in [big] cities. And a substantial proportion of the lower paying jobs are too.

          The points system also means we import highly educated and skilled immigrants, the sort whose jobs are only in larger cities.

          • Early Commuter

            But there are millions of ways to change that. Regional investment. Tax free zones. Punitive tax regimes.

            In the old days, you didn’t build factories in border districts if you could (cos they’d get invaded). Today the enemy isn’t an army, it’s overcrowding and inequality through regional differences. So you build your industry where it fights those enemies

          • ‘factories’? How old are you? Who is building factories?

          • Guessing he grew up just west of the Urals…

  • nemisis

    If we have 38,000 immigrants to auckland plus 15,000 natural growth ,a total of 53,000 new people to house then 20,000 to 27,000 new houses are needed each year. Thats on top of the backlog of 7 years, with virtually no building going on, ie 35,000 (7x 5,000 homes per year for natural growth). So to catch up, we need right now , at least 55,000 homes and then continue to build 20,000 at least per year. Meanwhile the planners have been sitting on their hands while delivering a completely incompetent unitary plan which will fail to address the housing shortfall.

    • John Polkinghorne

      Definitely a large and growing backlog. I don’t think we can blame planners for everything though – even for the Unitary Plan, as there’s often been community resistance to upzoning. We need to take collective responsibility for that.

    • Greg N

      Babies don’t need a house the day they arrive, theire parents might trade up, to a bigger place at some time after the baby arrives, but not every new baby requires a new house.
      Although given the current backlog of housing, their parents might want to put their name down for a ballot for a section he can build on way out of town, and make a booking for the house builder to start the build 20+ years from now, when the builder has a spare “slot” in his schedule.

      But seriously, we have been underbuilding since the GFC, thats some 7 years ago now. Can’t blame all of that on the Christchurch quake rebuild or the exodus of qualified builders to become truck drivers in Aussie coal and iron ore mines.

      But it shows we do need a huge step change in the building process in this country.

      To nullify the NIMBY brigade, I think council need to work on whole street blocks need to be redeveloped as a unit, to avoid the “woe is me I have a 3 storey tower block on my boundary now” type stories.
      If you do a complete block at one time you can have control on timing, disruption, and better control of design outcomes. Council should lead the way here. And show it not only can be done right, its easier and cheaper to do so.
      While also avoiding the developers “tick box, cookie cutter” model of urban (re)development. Which we see time and again around the city which aim to “meet the rules” – no more, no less.

      • Bruce

        +1… your posts are on fire today Greg!
        I’m not quite sure how they would manage it without compulsory acquisition but this would solve a lot of issues with NIMBYs and the like.
        Where a block currently might have 12 single dwelling houses on it, it could easily be redeveloped to 36 stand alone dwellings or 72 attached 3 level townhouses. The advantages of townhouses like this is that they can all be built in one go saving considerable time in both duration of the build but in the number of council inspections and increases in builders etc productivity. This alone would shave tens of thousands off the cost of a build.

        • Greg N

          Easy to achieve, Maurice Williamson told us at a presentation on AMETI years ago – to fix this NIMBY problem, do what the French do.

          In France if they want to acquire your land for whatever public works related reasons (like a new road) they pay double the market rate for your place.
          They find fewer NIMBYs when you do that, cuts out appeals and delays, and overall it saves money in the long run.

          I bet if you went around a block of houses and said, we’ll pay you twice the CV or whatever they use for your place, you’d get few holdouts. With double the current value they could buy something way better in Tauranga or the next street/suburb over.
          Or buy back one of the new houses and bank the difference.

          As you said, take 12 houses and sections say each worth $1m each, pay them collectively $24m for the lot.
          Put 24 or so houses spread over them, and another 24 or so townhouses, do it all way cheaper because there is less delay and general mucking about. Don’t bowl every tree in the place – work around the landscape not against it.
          It makes for a finished development not a treeless sandbox. Even after the big payout, those 48 homes will return a reasonable profit to the developer.

          Rinse and repeat on the next block. After you’ve done 20 or so of those, you’ve got a intensely developed neighbourhood.

          • Angus Robertson

            Even after the big payout, those 48 homes will return a reasonable profit to the developer.

            Nope.

          • Greg N

            Show why not please.

            Reasonable is not 25%+ profit.
            More like 1215% profit, for much reduced risk.
            Something that Panuku Auckland could do.
            Land would be bought by them, developer builds, so holding cost is borne by Panuku CCO, profits are split on an agreed basis.

          • Angus Robertson

            You are quadrupling the number of houses, land price per new house = $250,000; land cost per new house = $500,000. And the borrowing cost for your build is higher than everyone else. You have to clear more than $300,000 per unit in pure profit margin to break even.

            Building isn’t that profitable.

          • Greg N

            As I said land purchase holding cost is covered by Council CCO, 500K for “buildable” land is not out of whack for Auckland developments out in the sticks.
            Remember this is already got services on it. the CCO will take care of the consenting and design rule stuff. Builder just rocks up and builds the agreed designs.

            So then why do you need $300K pure profit a dwelling if the biggest costs are managed by the council CCO? Answer you don’t.

            And if building is not very profitable as you assert its because there are too many (not just council) people clipping the tickets on the way through.
            Which proves what I’ve said all along the building system here is totally broken.

            Although most developers I see drive around do so in the latest, flashest ute, with the boat and all the toys, so where is the money for that coming from? Kickbacks from the building supply companies?

          • Angus Robertson

            So then why do you need $300K pure profit a dwelling if the biggest costs are managed by the council CCO? Answer you don’t

            you are paying $250,000 more than it is worth for the land, plus more interest = $300,000 additional costs incurred for absolutely no value gained. you have to recoup this.

          • nonsense

            and I have a real world example of that. My partner’s family comes from the south of France. Local people couldn’t buy houses anymore because of all the Parisians and Londoners buying holiday homes. So council bought land at good prices, built houses and sold at cost + small margin to local families of certain income (not rich but not poor either, there’s state houses for that). new owners couldn’t sell within 5 years. everybody happy. And they keep doing it

      • stu donovan

        They only “just comply” with the rules because the rules squeeze almost all profit out of development. Think of a developer working on margins of 10-20%. Now think of rules like minimum apartment sizes, which add 30% to cost of dwelling. And that’s only one regulation of many. I wouldn’t criticise developers for doing the bare mininmum under the rules, when the rules themselves cause prices to double and thereby compress margins.

  • Alan J

    All trains from Britomart cancelled, no estimate for return to service.

    Farcical.

  • Yep, when I saw this title, I expected to see racist nonsense, and parochial nonsense, and ideas about “shutting out problems from the rest of the world”. Kiwi isolationism is disgusting and shows no signs of going away. I don’t even bother asking what the people in this thread would think about, for example, taking refugees from the Syrian civil war.

    No white New Zealander should ever, EVER have the chutzpah to say “let’s keep immigrants out”.

      • I’m an immigrant – I’m from Wellington. While my partner is a born-and-bred JAFA, I do not see any difference between myself and my friends who came here from Tehran, Adelaide or County Donegal.

        • Bruce

          You are already here born and raised Daphne. You are “our problem/benefit” an unskilled immigrant from overseas is however not our problem until such time as we let them in then they become a burden on our whole country. Compare that to yourself, even if you were a burden for whatever reason that is our problem to deal with. We don’t need to import more problems.

          As for your earlier post about White NZers not having anything to stand on. What a load of nonsense. The immigrants that came to NZ back then were wealthier, better educated, healthier, built this country from scratch. Before them there was pretty much nothing… Just some people running around in flax skirts killing each other. Compare NZ to any of the Pacific Islands (Fiji, Samoa, Tonga, Cooks, etc) and that is what NZ would be like now… A 3rd world country with next to no infrastructure, low levels of education, poor health, dependent on foreign aid.
          I’ll leave you to your “white-guilt” if you feel the need to keep going with that. NZ is now well established and doesn’t need a massive influx of low quality immigrants.

          • Wow Bruce; you are so full of nonsense. My ancestors, for example, who were lucky enough to land on these isles, were starving and illiterate ne’er do wells from the swamps of Ireland. You are full of judgements and assumptions about others that does you no credit…. pull your head in and don’t puff your chest out so far: You’re not so grand, and those you seem to despise are not so empty of potential.

    • Personally I think that accepting refugees and immigrants will have very positive long term effects on the country. I ask you what group in New Zealand are not immigrants? There are none that I can think of, just some that arrived earlier than others.

      However, people should have the right to say what they think. If someone is anti-immigrant they should be able to express their concerns, whether well founded or not. Removing debate by stating you don’t have the right to express your opinion can have a multitude of much more negative results.

    • stu donovan

      Completely agree.

    • mfwic

      The really good thing about immigrants Daphne is very few of them vote Green!

    • Peter Nunns

      Hi Daphne

      While I agree with your sentiment that pakeha NZers who want to pull up the drawbridge are ludicrously hypocritical, I don’t think you need to be so negative about the comments!

      From a quick read, there’s a roughly even split of positive and negative views on immigration. And while there have been a few comments that have skated a bit close to user guideline violations, for the most part it is a civil discussion between people with different worldviews. I think that’s a strength of the blog and I generally appreciate serious contributions from people, even if I disagree with them.

      On a completely separate different, I quite like your music!

  • Exile

    I look forward to the next post about international students. Handling among other parts HR for a larger MNE I am faced with international migrants everyday. I would love to see this broken down into to categories namely University and college students.
    I feel that Auckland has a serious issue with colleges. Private tertiary institutes that almost sell degrees that provide young migrants with a shortcut to residency. These college degrees are sold for a low price, 10-15K and the agents gets between 40%-70% of the tuition fees.

    Think about this when we discuss international students:
    1. University students, Bachelor or higher degrees. these students have put in say 125k to study a degree in NZ. 25k tuition fees per year plus accommodation etc. They tend to be what we refer to as potentials. I like these migrants, they have studied hard, they are driven and they offer benefits to me as an employer and I believe that the majority will be an addition to Auckland and NZ.
    After you have completed a bachelor in NZ you are almost automatically granted a 1 year graduate job search visa.

    2. College students. These are students who pay 10k -15k and gain a either level 5,6 college degree or a level 7 diploma. All these degrees comes from private tertiary providers.
    With these degrees the students obtain the same visa as the ones who have studied a Bachelor degree. Thats the 1 year graduate jobsearch visa.
    The colleges are often around Queen Street in Auckland, but also Takapuna and the south has some colleges. They have fancy English names and have passrates of 100%.
    When graduates from these colleges come for interviews for jobs or internships, internships is part of their level 7 diplomas apparently, their skills, are often non existent.
    Their command of English is often very very poor. This needs to be said with a disclaimer, I generalise here, the English is generally poor among what I have met two distinct groups, the Punjabi and Gujarati Indians. Others coming with these college degrees, usually from Philippines or South America tend to speak decent enough English.

    I question this college route to Visa. First the students spend very little money in NZ and thus contribute very little to society. Second having met many of them I feel that the colleges who offer level 7 and level 8 programs (thats your bachelor and postgraduate diploma levels) allow anyone to pass as soon as they have paid the fees. the small fees. I would not hesitate to say that the colleges are a cheap way to a workvisa in NZ and has very very little to do with a tertiary qualification.

    Being privy to the enrollment-numbers at one of Aucklands universities over the last few years I can with authority say that in regards to international students its not University students who obtain workvisas that we have seen a huge increase in,

    I think what needs to be done is to role in the private colleges. They are not fit to offer the equivalent of a bachelor through a 9 month course. Its impossible that the quality of education from a college means that a 9 month course should put college graduates on a level footing with international students who have just spent three years at one of NZ universities (or for that sake 3 years at say a polytechnic such as Unitec).
    If we demand that any student who gets a graduate job search visa has spent a minimum of 2 years studying in NZ (you know like those pesky Aussies do) I believe that we would cull the international students numbers to Auckland and also that we would improve the quality of the students that seek to reside in NZ.

    • stu donovan

      You do realise that new zealand has a serious demographic problem with an ageing population? And that the prime minister and ruling party have ruled out making adjustments to our retirement policies? Such that if we do nothing then the country will enter a serious fiscal decline starting about 2020?

      In this context, letting in students to try and address the demographic imbalance is not just the right thing to do, it’s possibly the only thing that will save us from being fiscally hung drawn and quartered.

      • Exile

        I struggle to see why the answer to letting people buy a visa through a collegedegree a 15k has to do with our possible (and you describe one opinion about it, but hardly a neutral one) aging population?

        And I also see your point as a fallacy based on ideology not economical facts. You are convinced that NZ cant adapt to changing demographics. I struggle to see any historical evidence for that. We have adapted to changing demographics before and I struggle to see why we, just like several European countries whose population has been increasing in age for the last 15 years, cant adapt further. But I dont have a politically set mind that clouds my judgements.

        But for your info, I would love more migrants to NZ. Preferably the educated ones that can contribute to government coffers and provide us with more knowledge. BUT that doesn’t mean i want more college students who struggle with their language and arrive without any skills. They don’t contribute to government coffers to the contrary they become a new underclass and compete with mainly Maori and Polynesians for the lowest paid jobs in NZ. That I see no good at all in, instead I see it as detrimental to change the situation of our Maori and Polynesians that are stuck in “working poor” lives.

        If we want more uneducated migrants, we should ask our Polynesian brothers to enter, we have a responsibility for those islands. Or perhaps provide PRs to the mainly filippino farmworkers who we for some reason don’t want to offer residency too despite them contributing to the agrarian sector and wanting to stay in the provinces working in jobs where employers struggle to get reliable staff.

        Now the issue stands we have a problem when a loophole in our immigration policy has allowed small tertiary education providers, who provide an education of questionable quality, to provide 9 month courses that equal full bachelors in the eyes of NZ immigration policies. What that has to do with the aging population is beyond me.

  • mfwic

    The problem is not so much the number but the fluctuation. It is just amazing we can go from zero net to 60,000 net so quickly. I think the simple fact it can change faster than housing supply is the risk to us all. It could just as easily drop to zero just as housing supply comes on line and that would also be a huge problem. Maybe we need a longer waiting list sort of like hip operations so we could ensure 30,000 net per year and make those returning book in as well! It is a bit like inflation, the variation does more damage than the underlying level. If we knew we were getting 10% inflation every year no one would care we would just factor it in.

    • Stu Donovan

      meh. Some markets respond quicker than overs. Get over it.

      More seriously, I don’t know of any evidence to suggest the short-run issues caused by increased migration, i.e. higher house prices, outweigh the long-term benefits, e.g. a more balanced demographic profile. I’m personally extremely grateful that in just 5 years or so we’ve gone some way to reversing the brain and brawn drain that has carved out a massive chunk of NZ’s working age population over the last two to three decades. This is especially good news given the government’s intransigence/unwillingeness to address costs of NZ superannuation in other ways.

      Population growth is our only option.

      And the key thing with house prices is whether, after the initial rise, they gradually revert to be closer to their economic value? Therein lies Auckland’s problem: It’s not the increase in prices that is the problem, it’s the fact that supply never responds sufficiently strongly to bring prices back down again. And the reason supply doesn’t respond so strongly is largely to do with planning constraints and tax incentives

      • mfwic

        You still have to be impressed with how steep that graph is and how quickly it turns. We could fix it with a take a number type system.

      • Scott M

        So young NZers who cant afford a house are to console themselves with the fact some statistician will be happy with demographic charts in 20 years time? Are you serious?

        • jezza

          It’s swings and roundabouts, they may be able to afford a house now* but there may not be enough young people around to pay for their pension in the future.

          *I’m not convinced that immigration is the major driver of Auckland house prices to be honest, sure it’s a factor, but I suspect speculation and panic are playing a bigger role. The disconnect between house prices and rents on the isthmus suggests it is much more than just population demand.

  • Nick R

    How much of this is just a representation of the New Zealanders relative liquidity of living abroad and returning home?

    I mean I’m a born and raised New Zelander, but I’ve also ‘permanently migrated’ to New Zealand twice over, having moved abroad twice previously.

    Are we just seeing thousands of Aucklanders coming back home because Auckland is getting quietly awesome while Australia and London are starting to be a tough gig?

      • Ricardo

        Nope. Whole central suburbs have greatly changed their makeup as a result on unrestricted immigration. I know. I live here. The changes over the last years are stark.

          • Patrick, change can go both ways, just assuming it will be great is naive at best.

            You have read the news about New Years Eve in Cologne, right? “Change” can also mean that these things will become the norm. These are not isolated cases. More generally, in Brussels (and a lot of other large cities in Europe) change has meant that the new norm for women is now to be harassed whenever they come outside alone. A lot of immigrants grew up learning that women are not supposed to come outside alone, and if they do, they are at least supposed to be covered in a burka.

            The media do report on this sporadically, this one http://www.theguardian.com/world/2012/aug/03/belgium-film-street-harassment-sofie-peeters has video.

            And then political correctness kicks in. We are not supposed to talk about it. We are supposed none of these problems exist. Politicians avoid the issue because they are afraid to be branded a racist. And then it is not surprising that eventually a lot of voters consider almost the entire political spectrum (left, centre, moderate right) radioactive.

            Rest assured that change can be bad too.

          • Yes, of course. But in Auckland’s case, the dreary, monocultural backwater that it was, almost any change is a good thing…. But, seriously really I just wanted to point out to our quivering commenter that ‘change’ is not a synonym for bad… that’s my point, it just might be better [and it usually is, once fear is overcome].

          • Hmm you don’t exactly paint a rosy picture of Auckland in the 80’s and 90’s. Lots of the changes are very welcome.

          • The changes from that state are more relevant now, how we got there is somewhat historical, though interesting. Time persistently moves in one direction…. And I do remember those years well, and those memories inform my activism now.

        • You assume you can tell my ‘make up’, that a citizen by birth is a little englander I suppose?

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