Here's a question for Auckland's property owners. Be honest.
If you could take out a mortgage fixed for 12 years at 4.01 per cent to invest in an asset that will last decades and have a guaranteed customer base of over 1.5 million, would you? Would you take on that debt if the interest cost was less than 15 per cent of your income?
The answer for Auckland property owners is clear in the recent mortgage and house sales figures.
Sales in Auckland rose to a 12-year high in July and more than 40 per cent of the buyers were rental property investors or owner-occupiers buying houses with mortgages fixed for one or two years at 4.7 per cent.
Understandably, those home-buying investors were betting demand would be so strong in a market already short of 30,000 houses they would be able to rent out these properties and do well.
They were betting on the long-term future of Auckland and comfortable borrowing at 4.7 per cent. They were happy to do it despite rent barely covering the interest costs, or with interest costs around 40-50 per cent of net pay for owner-occupiers.
They were buying assets they could see and touch in a high-growth market they understood and were confident in. Auckland's houses are worth more than $450 billion and are being paid for with well over $120b of mortgages, suggesting a gearing ratio of around 26 per cent.
Aucklanders seem relatively relaxed about that level of debt gearing and serviceability for their own homes.
So why are they so nervous about their council's gearing ratio of 17 per cent, particularly when population growth is expected to be explosive over the next two decades and the council can borrow at 4percent or lower?
Why are they concerned about the infrastructure that debt would pay for when they see it through grid-locked windscreens every day?
Auckland Council and some councillors regularly argue Auckland has maxed out on its debt and cannot afford more. That would be so if the borrowing was for salaries and bin collection, but no one is saying that.
Ratings agency Standard and Poor's has given Auckland Council an AA credit rating and the council successfully borrowed $250m from "Mum and Dad" investors in March at an interest rate of 4.01 per cent.
The irony is that councillors opposing more debt are no doubt from the same communities and circles with more than $140b in term deposits to lend to councils.
Auckland urgently needs investment in its roads, rail networks, buses, water systems and other infrastructure to cope with an extra million people over the next 50 years or so. They will be ratepayers and the growth of Auckland's economy will support that debt.
The two-faced approach on the personal debts of ratepayers and the public debts of their councils in a city growing as fast as Auckland is odd.
Ask yourself: would you borrow at 4 per cent to invest in multi-generational assets with guaranteed customers in a fast-growing economy? Of course you would.