Hi Guys
Some interesting points about Auckland from Tony Alexander's latest newslettter.
Regards
Some interesting points about Auckland from Tony Alexander's latest newslettter.
For your guide the sorts of things which people are likely to think about in terms of generating potential
Auckland underperformance include the following.
1. The past two censuses have shown a net outflow of older people from the Auckland region. With baby
boomers retiring in droves over the next few years it is likely we will see even more people retiring out
of Auckland to the likes of the Bay of Plenty, Hawke's Bay, Nelson, Canterbury and so on.
2. Over the past three decades Auckland's economy has received a boost compared with the rest of the
country as young people will have left smaller centres to go to Auckland in order to maximise their
employment chances. These days with ongoing structural tightness in the New Zealand labour market
the need to do that is minimal. Increasing numbers of young people are likely to stay out of Auckland in
order to get cheaper housing, better commuting experiences, equally good if not better cafe
experiences, and so on with little diminution of incomes or career prospects.
3. Maybe for somebody from the back blocks Auckland looks big. But by world standards it's a tiny city
and we are finding increased frequency of the comment that if one wants to go to a big city one will
move to one that has a far better infrastructure than Auckland. And with the well-known international
mobility of New Zealanders perhaps this explains the relatively sharp increase in the number of Kiwis
going to Australia in the past year.
4. Telecommuting is often talked about but over time this is likely to lead to a greater number of people
choosing to live and work in the regions. In fact one should expect that once our country’s broadband
infrastructure is greatly improved (surely!) telecommuting could take off with increasing numbers of
people choosing to live in less stressful regions rather than transport-challenged Auckland. Note though
that the opposite effect may occur with people finding they only need to commute to an Auckland inner
city office once or twice a week if they can work from home 60% of the time.
5. Around 50% of immigrants tend to go to Auckland. With migration numbers easing off Auckland will
notice the change more than other parts of the country.
6. The boom in international demand for resources including food has led to sharp increases in the prices
of some food items and will likely produce increased prices for others such as beef and sheepmeat
further down the line. This clearly directly benefits the incomes of farmers who tend not to be living in
Auckland. In addition the capital expenditure by businesses to take advantage of improved returns on
agricultural products will also tend to be focused on farms and processing facilities located not in the
cities. The frontier as it were in New Zealand is in the regions - not the cities.
7. The high cost of living in Auckland means availability of quality staff in a tight labour market could lead
to a reduction of service standards across many industries which will encourage residents to think
about life outside the city.
Auckland underperformance include the following.
1. The past two censuses have shown a net outflow of older people from the Auckland region. With baby
boomers retiring in droves over the next few years it is likely we will see even more people retiring out
of Auckland to the likes of the Bay of Plenty, Hawke's Bay, Nelson, Canterbury and so on.
2. Over the past three decades Auckland's economy has received a boost compared with the rest of the
country as young people will have left smaller centres to go to Auckland in order to maximise their
employment chances. These days with ongoing structural tightness in the New Zealand labour market
the need to do that is minimal. Increasing numbers of young people are likely to stay out of Auckland in
order to get cheaper housing, better commuting experiences, equally good if not better cafe
experiences, and so on with little diminution of incomes or career prospects.
3. Maybe for somebody from the back blocks Auckland looks big. But by world standards it's a tiny city
and we are finding increased frequency of the comment that if one wants to go to a big city one will
move to one that has a far better infrastructure than Auckland. And with the well-known international
mobility of New Zealanders perhaps this explains the relatively sharp increase in the number of Kiwis
going to Australia in the past year.
4. Telecommuting is often talked about but over time this is likely to lead to a greater number of people
choosing to live and work in the regions. In fact one should expect that once our country’s broadband
infrastructure is greatly improved (surely!) telecommuting could take off with increasing numbers of
people choosing to live in less stressful regions rather than transport-challenged Auckland. Note though
that the opposite effect may occur with people finding they only need to commute to an Auckland inner
city office once or twice a week if they can work from home 60% of the time.
5. Around 50% of immigrants tend to go to Auckland. With migration numbers easing off Auckland will
notice the change more than other parts of the country.
6. The boom in international demand for resources including food has led to sharp increases in the prices
of some food items and will likely produce increased prices for others such as beef and sheepmeat
further down the line. This clearly directly benefits the incomes of farmers who tend not to be living in
Auckland. In addition the capital expenditure by businesses to take advantage of improved returns on
agricultural products will also tend to be focused on farms and processing facilities located not in the
cities. The frontier as it were in New Zealand is in the regions - not the cities.
7. The high cost of living in Auckland means availability of quality staff in a tight labour market could lead
to a reduction of service standards across many industries which will encourage residents to think
about life outside the city.
Regards
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