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It pays to be a home owner in Southland
By KAREN ARNOLD - Sunday Star Times | Sunday, 07 September 2008
Southland's booming economy is paying huge dividends for homeowners in the region, who have on average $280 more each week in their back pockets than their Auckland counterparts.
With housing the most affordable in the country, typical Southland homeowners have the highest disposable income to play with each week after the mortgage has been paid - $358 compared to $78 for Aucklanders.
The August report in the Wizard home loan affordability series compares individuals in the 30 to 34-year-old age group who bought the median house price in July with a 20% deposit.
It shows that while the average Southland pay packet is up there with the rest of the country, the pressures on it are low.
And it's quite possible for a household to survive on one income. The average single take-home pay is $626 a week for that age group in Southland - that's on a par with Taranaki, Manawatu and Wanganui, Nelson and Marlborough and higher than Gisborne and Hawke's Bay - but only $268 goes on mortgage repayments for a median priced house ($172,000).
That compares with Auckland where $656 of the average $734 weekly take- home pay for that age group will be eaten up servicing the mortgage on a $421,000 median priced-house, leaving $78 of disposable income and the need for a second wage coming into the house.
According to Statistics New Zealand the average ordinary weekly wage across all Southland workers in June was $815, an increase of 6% on a year ago. Workers across the Auckland region received an average $940.
Invercargill mayor Tim Shadbolt said not only was it cheaper to live in the south, but the lifestyle and freedom of movement couldn't be underestimated. There were plenty of opportunities for skilled workers who wanted to move south and share the good times.
"The biggest barrier we've got is that [many think] life doesn't exist beyond the Bombay Hills."
He said there were very few examples of countries in the world where a third of the population lived in one city. "Within New Zealand it's created an imbalance. We're out of kilter."
Shadbolt plans to launch an assault on Auckland at the careers expo this month, saying unless Southland can attract enough skilled workers the region's economic growth will stall.
Venture Southland says there are 1700 vacancies for skilled workers in the south that need to be filled immediately.
"The labour market in Southland is currently very tight, with the lowest unemployment (1.6%) and the highest participation rate (72.8%) in the country. This means that most people who can work are working. Advertised job vacancies grew in Southland by 23.3% for the year to December 2007."
The pressure is being felt by the dairying industry with farmers struggling to attract and retain skilled and experienced workers, while the construction industry is busy building dairy sheds in rural areas and new houses in the city. A record 274 building consents for new houses were issued by the Invercargill City Council in the year ended June.
But with a workforce of 50,500 people and a rapidly ageing population, Southland will need 12,000 new workers by 2016 if it is to progress at its current economic growth rates. "If certain strategic projects go ahead, such as oil and gas exploration in the Great South Basin, further wind farms and silicon/lignite projects, the number of new workers required will be even greater."
However, like all regions, Southland is also competing with the attraction of Australia, which offers on average 25% higher wages.
INVESTORS WANTED
Northern investors will be hoping Southland gets the extra workforce it needs to fill rental housing being developed by Hamilton-based Paradise Homes in pockets of cheap, unused land round Invercargill.
In a scheme promoted by Wealth Buy Property, the houses are sold to investors who must rent them to property management firm Easystart Rental Management Ltd for 10 years.
The Wealth Buy website promotes using unused equity to buy a property then tax refunds and rent to cover the interest.
"If at all, a very small outlay may be required from you."
It says the property appreciates at 10% on average per annum.
"You access the increased capital value to buy more and more properties. At some stage in your life, sell a few properties and repay all the loans. You are left with a few freehold properties. Enjoy the passive income of rents for the rest of your life."
Wealth Buy Property promises to arrange 10-year guaranteed leases.
"There is no down time and the property is fully managed. No tenant hassles."
There are reports the houses in Invercargill have been promoted for $350,000 though the average sale price of houses in the city in July was $220,308, according to Quotable Value. And rents are the lowest in the country.
Real Estate Institute of New Zealand figures show Southland's median house price fell in July from $182,500 to $172,000 with a drop in sales from 152 in June to just 129 in July.
http://www.stuff.co.nz/4684227a11.html
By KAREN ARNOLD - Sunday Star Times | Sunday, 07 September 2008
Southland's booming economy is paying huge dividends for homeowners in the region, who have on average $280 more each week in their back pockets than their Auckland counterparts.
With housing the most affordable in the country, typical Southland homeowners have the highest disposable income to play with each week after the mortgage has been paid - $358 compared to $78 for Aucklanders.
The August report in the Wizard home loan affordability series compares individuals in the 30 to 34-year-old age group who bought the median house price in July with a 20% deposit.
It shows that while the average Southland pay packet is up there with the rest of the country, the pressures on it are low.
And it's quite possible for a household to survive on one income. The average single take-home pay is $626 a week for that age group in Southland - that's on a par with Taranaki, Manawatu and Wanganui, Nelson and Marlborough and higher than Gisborne and Hawke's Bay - but only $268 goes on mortgage repayments for a median priced house ($172,000).
That compares with Auckland where $656 of the average $734 weekly take- home pay for that age group will be eaten up servicing the mortgage on a $421,000 median priced-house, leaving $78 of disposable income and the need for a second wage coming into the house.
According to Statistics New Zealand the average ordinary weekly wage across all Southland workers in June was $815, an increase of 6% on a year ago. Workers across the Auckland region received an average $940.
Invercargill mayor Tim Shadbolt said not only was it cheaper to live in the south, but the lifestyle and freedom of movement couldn't be underestimated. There were plenty of opportunities for skilled workers who wanted to move south and share the good times.
"The biggest barrier we've got is that [many think] life doesn't exist beyond the Bombay Hills."
He said there were very few examples of countries in the world where a third of the population lived in one city. "Within New Zealand it's created an imbalance. We're out of kilter."
Shadbolt plans to launch an assault on Auckland at the careers expo this month, saying unless Southland can attract enough skilled workers the region's economic growth will stall.
Venture Southland says there are 1700 vacancies for skilled workers in the south that need to be filled immediately.
"The labour market in Southland is currently very tight, with the lowest unemployment (1.6%) and the highest participation rate (72.8%) in the country. This means that most people who can work are working. Advertised job vacancies grew in Southland by 23.3% for the year to December 2007."
The pressure is being felt by the dairying industry with farmers struggling to attract and retain skilled and experienced workers, while the construction industry is busy building dairy sheds in rural areas and new houses in the city. A record 274 building consents for new houses were issued by the Invercargill City Council in the year ended June.
But with a workforce of 50,500 people and a rapidly ageing population, Southland will need 12,000 new workers by 2016 if it is to progress at its current economic growth rates. "If certain strategic projects go ahead, such as oil and gas exploration in the Great South Basin, further wind farms and silicon/lignite projects, the number of new workers required will be even greater."
However, like all regions, Southland is also competing with the attraction of Australia, which offers on average 25% higher wages.
INVESTORS WANTED
Northern investors will be hoping Southland gets the extra workforce it needs to fill rental housing being developed by Hamilton-based Paradise Homes in pockets of cheap, unused land round Invercargill.
In a scheme promoted by Wealth Buy Property, the houses are sold to investors who must rent them to property management firm Easystart Rental Management Ltd for 10 years.
The Wealth Buy website promotes using unused equity to buy a property then tax refunds and rent to cover the interest.
"If at all, a very small outlay may be required from you."
It says the property appreciates at 10% on average per annum.
"You access the increased capital value to buy more and more properties. At some stage in your life, sell a few properties and repay all the loans. You are left with a few freehold properties. Enjoy the passive income of rents for the rest of your life."
Wealth Buy Property promises to arrange 10-year guaranteed leases.
"There is no down time and the property is fully managed. No tenant hassles."
There are reports the houses in Invercargill have been promoted for $350,000 though the average sale price of houses in the city in July was $220,308, according to Quotable Value. And rents are the lowest in the country.
Real Estate Institute of New Zealand figures show Southland's median house price fell in July from $182,500 to $172,000 with a drop in sales from 152 in June to just 129 in July.
http://www.stuff.co.nz/4684227a11.html
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