Sooner or later, most Auckland first home buyers ask themselves if all the misery is really worth it. Paul Davies tells The Spinoff the answer, in the end, was no. And then he got a call from Melbourne...
Let's cut to the chase. We all know it's a beautiful country, but the flip side of New Zealand's prettiness is its isolation. And that's why, back before this tale really begins, my partner and I packed up and headed to the UK.
We had a blast, but didn't blow the budget. In fact, I took the gamble of freelancing and it paid dividends. Despite travelling throughout Europe, I was able to return with considerably more than the paltry sum I left with.
We were excited to return home to Auckland. Excited because our new savings would help us buy a house and settle down. Such hope, such optimism. Bless.
The return home
When we arrived back in our big little city in late 2013, it felt different. There were a few new shops and a motorway extension but what I really noticed were the people.
There was a glint in the eye and a strut in the step. A new car here, an overseas holiday there - and plenty of talk about real estate. "Let's get an investment property in Henderson!" one friend exclaimed. "Nah, Te Atatu Peninsula - let's get in there," his mate suggested. "Tat Pen has gone bro - Hendo will get the gains."
I was confused. These guys had only recently bought their first home and now they wanted to invest? I thought that was for the boomers. People were acting like they'd just won lotto. Turns out they thought they had.
They'd seen the CVs on their houses reach double-digit yearly increases. This was the motivator. They wanted to "get in" on the next boom suburb, to cash in a tax-free profit, before that suburb was "gone". It was "money for jam," as one guy put it.
Feeling the FOMO, I started looking at houses. Not as an investment, but as a home - a first step on that giant ladder. I'd been nomadic for a while and I yearned for a shed and vege patch. To lean over the fence to yarn with the neighbour; to feel like part of a community.
Mostly though, I just wanted to be free from Auckland's dodgy landlords.
The renter's game
Of course they're not all like that, but with such weak tenancy laws and strong demand for housing, human nature makes some take advantage of the power imbalance. Then there are ones who are just plain crazy. Our landlord in Ponsonby was in that category.
After we asked for some much needed repairs to the flat, he accused us of mistreating his property. Not long after that, he emptied our rubbish bin in the backyard. He took photos as "proof" we were bad tenants. Unfortunately for him, my flatmate was home - she watched in terrified awe as he spread our household waste over the lawn.
Then there's the current National Party minister who was a former landlord. He kicked us out when we told him that the shower was leaking into the room below. His quick eviction, apparently due to a family member moving in (heard that one before), meant that we had to move out on Christmas Eve. It was a different take on the spirit of Christmas, but a memorable gift nonetheless.
Renting, not to put too fine a point on it, sucked. The prospect of having our own place and living free from slumlords was overwhelming. I could almost taste it - FREEDOM. Once I'd found work again in Auckland I strutted off to the bank to collect my mortgage approval for my quarter acre paradise. There was a house party going on and it was time to make my entrance. Better late than never.
Unfortunately the pleasant chap at the bank had other ideas. "You recently returned to New Zealand and you're a freelancer; come back in a year." Wait, what? WHY... That's not fair! I'd seen the ads - I wanted the soft, warm, lens-flared dream they're selling. I wanted the house, the car and the big screen TV.
The timing irked. We'd recently been through tough times with illnesses in the family - buying a house was a way to regain some control in life, to not be at the whim of more bad news and life's obligations. No such luck. Instead it became another obstacle.
To rub salt into the wound it then felt like it was all I'd hear about. I struggled to go to a barbecue or dinner where the conversation didn't gravitate towards houses. People in cafes and bars would boast about their rentals in the regions or how good it was to have Housing NZ tenants (because the government always paid the rent).
Twenty-five year olds were buying investment properties with the help of their parents and some young Aucklanders were straight up being bought a place by mum and dad. One of them even whinged about it to me. It was surreal. I would've happily taken a gifted deposit on a house and signed the contract in my own blood if I had to. Property was the only game in town and I had to play.
Instead, I was a disgruntled spectator. I sat and watched as house prices increased (on average) by about 100 grand that year. I went through the motions - denial, anger, bargaining, depression, ridiculously high intakes of burgers and beer.
Gradually, I accepted my fate and learned to appreciate my rented, windowless room with gib walls on Upper Queen Street. It was an incredible warehouse apartment, but typically cold and noisy. Living in the city at least taught me to be grateful - better living inside four walls than outside on the streets with the growing number of homeless. Then there's the families living in garages, sheds and cars. It blew my mind.
The same property boom that so many were gloating about was the same one that had skyrocketed housing costs and pushed many families into sub-standard accommodation. Cause and effect. The benefit of a few was punishing so many. A country once touted for its opportunity had become one of opportunism.
My room on Upper Queen didn't last long. Perhaps inevitably, after just over a year, I was told to leave. Deciding to move in with my partner, who'd been living with family, I soon learned just how lucky I was.
Queues of 30 people waiting to view rentals in Avondale revealed how desperate people were in the city of sales (mainly by auction). We joined the hordes and sauntered through like extras from The Walking Dead. Feeling desperate, we threw in an application. To our surprise it was offered to us.
I asked the agent why we were chosen and immediately had my faith in humanity destroyed, "You both have jobs and you don't have kids. The landlord doesn't want kids - they draw on the walls." Stupid, meddling kids. Upsetting the revered landlord's precious investment? How dare they!?
Young families who couldn't buy a house even struggled to get a rental. I felt bad. There were families hoping to make this place their home and we threw our name in the hat just because we didn't want to miss out. We turned it down. Hopefully a family got it, but the All Whites would have a better chance of winning the next world cup.
Upon realising our new powers of tenant desirability, we found a place within our budget in the area we wanted to live. The lights were hanging out of the sockets, the toilet bowl was cracked and the blinds were broken, but not bad for Auckland right? Standards are different for second class citiz- ah, I mean renters. And despite the leaking roof in our bedroom and $350-400 a month winter power bills, our split villa had French doors and a big sunny deck so we were happy.
Happy, because we were lucky. Lucky to have jobs, no kids and be considered desirable tenants. As far as Auckland's elongated class structure went, we were somewhere in the middle and we had a good standard of living.
I was thankful that we had a place to live in such a broken city and I was also thankful that we didn't have a young family that we'd have to pack up and move on at a landlord's whim.
Due to the leak which the landlord wouldn't fix, mould would grow in our bedroom. I cleaned it regularly and kept the room warm, but the thought of raising a child in that environment wasn't a good one. My mind would wander to the kids living in garages and cars, not far from where we lived. It would keep me awake at night. Life in modern New Zealand.
A tempting offer
Then, some months later, I received a message from a friend working in Australia. It spoke of a better life, wealth and opportunity - sort of like a fairytale. I ignored it at first, thinking of how entrenched our lives were on the Auckland isthmus, but a second message made it seem less like a fairytale and more like a reality show. One in which I was the star.
I called the guy about the thing. He was flattering. I was smitten (in a work kind of way). The conversations turned into contracts and before I knew it I was locked in. My partner too; she had family in Melbourne and we both had friends there.
Since we were tenants, the move was relatively simple. The landlord was putting the rent up so it felt like a minor victory to give our notice. Of course they tried to hold us accountable for damage that was done before we moved in, but if living in Auckland has taught me anything, it is to document EVERYTHING. Paul 1 - dodgy landlord 0.
By the end of summer we were on our way. Just over two years after arriving home to settle down, we were leaving again. And before patriotic Auckland homeowners can mutter, 'good riddance' into their Nescafe pod flat whites from their indoor-outdoor flow, this is an issue that affects even multiple property owners.
Recent studies have shown that Auckland's housing crisis is affecting the ability of employers to attract and retain talented employees. While I realise my own talents are limited to being able to deliver an acceptable leg spinner with a tennis ball and having a good whinge, there are large skill shortages in Auckland.
Last year a survey of 25 Auckland based businesses revealed that the majority of managers had serious concerns about the impact Auckland's high cost of living is having on attracting and retaining staff. Apparently it also affects staff performance.
The survey found that the growing proportion of renters needed to continually move, decreasing their productivity. Sickness was also increasing due to people not being able to move out of sub-standard housing. Another report earlier this year found that one third of the small and medium sized firms surveyed believed the housing market is sending current and prospective employees out of Auckland.
A better alternative
And while the Auckland housing inferno burns eternally, in comparison houses in Melbourne are reasonably priced. Perhaps the scale puts it out of kilter - like comparing Armageddon with a natural disaster - but in relation to average incomes, buying a house in Melbourne actually feels possible.
While Auckland's house price to income ratio is now above 10, Melbourne's is 8.6. It's still a tough task, but if you're prepared to live further out, housing is affordable. Hoppers Crossing, 23km west of the CBD has a median house price of $455,000. In comparison, Manurewa, 26km southeast of Auckland's CBD, has a median house price of $623,500.
If you want a new build, house and land packages in Werribee, 30km west of the Melbourne CBD, are less than $400,000. You'll even get a nice bonus too - this year the state government doubled the first home owner grant for those buying new builds in Victoria.
If you're prepared to go a bit further, Melton, about 35km from Melbourne's CBD, has a median house price of $318,000. That's a few kilometres further than Papakura is from Auckland's CBD, but the difference is that Melbourne has a world class public transport system. You can catch the train from Melton to the city in 39 minutes.
A few decent policies
Housing is as much a talking point in Melbourne as Auckland, but perhaps not quite such an obsession. The same problems surrounding inflated prices, foreign ownership and the struggle of first home buyers are flogged by the media, but the big difference is the government response. Victoria has enacted policies that do much more than the repetitive lip service paid to aspiring homeowners in New Zealand. Earlier this year, the Victorian government released land and rezoned 100,000 lots to help with the burgeoning population growth.
And while they're increasing supply, they're also not afraid to deal with Aotearoa's elephant in the overpriced room - demand. Unlike New Zealand, foreigners cannot simply jump off a plane and buy an existing house. Foreign buyers in Australia need investment approval to purchase residential real estate and are directed towards purchasing new builds. It stops foreign purchasers from outbidding residents on existing houses and funnels investment to increase new housing stock.
They're also dealing with the increasing number of ghost houses - places bought, kept empty and sat on for capital gain. While the vacancy rate of 4.8% in Melbourne isn't as loco as Auckland's 6.6%, the state government is addressing it with a 1% tax levied on vacant property. This encourages owners to get those homes rented or on the market.
They're simple policies, that, if adopted in New Zealand, would help level the playing field on the demand side, while contributing to the investment of new stock and helping to free up the supply side.
One of the biggest advantages of property flippers and speculators in New Zealand is the absence of stamp duty. Stamp duty is a common property tax used throughout the world which charges property buyers a tax at the time of purchase. The Victorian government will make $6 billion in the next financial year from stamp duty - much of which will be directed back into the Victorian economy to help build new suburbs and improve public transport through infrastructure investment.
A new move to exempt first home buyers from stamp duty while scrapping concessions for investors is further strengthening the hand of those looking to buy their first home. Some argue that removing stamp duty for first home buyers will increase overall prices, but this shows that stamp duty is widely considered to moderate house price growth.
Foreign purchasers must also now pay an additional duty (FPAD) on top of stamp duty in Victoria. These added costs help temper the market while topping up government coffers. They're more examples of policies that would help first home buyers and infrastructure development in New Zealand.
Although Melbourne has an abundance of land, it's a desirable international city with an average annual income above $75,000 - the idea of it being cheaper than its little Pacific cousin is baffling. People from everywhere want to buy a piece of the world's most liveable city, but regulation and taxation are used to protect local residents.
Once you understand Victoria's system and how effective efforts are in helping first home buyers, it makes you wonder what on earth is going on back over the Tazzy. Either the National government is more interested in looking after speculators and investors or they are simply mad lazy. Perhaps both?
As for us, we've settled into our new lives and we pay less to rent a two bedroom terraced house in Brunswick with a courtyard, gas heater and solid brick walls than we did the leaky two bedroom split villa in Morningside.
Bills are much cheaper, public transport is incredible, bike lanes are everywhere and life in this great city is about as exciting as it gets. While living a vibrant lifestyle we've also managed to save and we've just been given pre-approval to buy our first home.
I do miss Auckland (especially my Auckland: family and friends) but unfortunately in this new age of profit over people, home is no longer where the heart is - it's simply where you can afford it.