Why would I want to leave New Zealand?
Yes and No. In this post I'll explain why.
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| Mt Ruapehu and Tama lakes |
Perception of New Zealand
Anecdotally, from the outside looking in, New Zealand is well known for:
- Friendly and welcoming people, known for being down-to-earth and approachable,
- A laid back lifestyle with a healthy work life balance,
- Stunning natural beauty, from Lakes, mountains and glaciers, to Forests, volcanos and white sandy beaches,
- Clean and green with a pristine environment and commitments to sustainability,
- Safe and peaceful, ranked as one of the safest countries in the world.
- High cost of living,
- Limited Job markets,
- Geographical Isolation,
- Cultural tensions,
- An increasing political divide.
If you haven't read about why we are moving to Japan, have a read here, as it's the other side of the coin of this post.
Previously I had written about our reasons for planning to move to Japan and the changes in lifestyle that come with it, particularly from a financial and quality of life aspect.
And as a slight warning, this post will be a little bit negative, as it's about the reasons for leaving rather than reasons to not leave. New Zealand has a lot going for it, and many live here happily.
New Zealand has a rather good reputation as a beautiful and safe country, far away from the world's troubles and that is largely correct. Like most places though, things always appear far rosier when looking from the outside rather than within. I'll elaborate further later, but first a bit about how I ended up here in the first place.
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| New Chums Beach, one of the best in NZ, with access only possible at low tide |
How I came to live in NZ
My Grandfather was born in Dunedin after his family emigrated from the UK back in the 1800s, and as such, my Dad had a New Zealand passport, and it had been a lifelong dream of his to visit New Zealand and the place of his Fathers Birth. Like most life-long dreams, life gets in the way and it wasn't until 2003 that we travelled to NZ for a family holiday, spending a month in a large campervan touring the country and seeing everything there was to see, and it was a fantastic experience.
Shortly after arriving home, my Dad asked me what I thought of living in NZ, and my response was simply 'seems like a nice place to retire'. I was still in high school at that point, and interestingly looking back, those was truth in those words, though I would now correct it to 'seems like a nice place to retire if you are incredibly wealthy'
Fast forward a few years and I had started a promising career in the UK in Quality management. One day I was on the phone to Dad, discussing work (our roles/industries had some parallels) and he had just come back from another NZ trip. I asked him 'so when are you thinking of moving to NZ', and he replied that he planned to move next year, and invited me to come with. I'm not one to usually make whimsical life-changing decisions, but that's precisely what I did. At 18 years old I knew I had my whole life ahead of me and appreciate that having the safety net of my parents involved made it a relatively safe decision. We had moved around the UK almost my entire childhood following my Dad's work, so moving again wasn't such a big deal. Plus the UK at that point was already showing signs of problems to come, and the decision to leave was vindicated just a month prior to leaving when I could not get home from work as the trains had been cancelled due to the London bombings, which were a bit too close for comfort from where I lived and the train lines I used.
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| For all of its flaws, Auckland is a beautiful city |
In August 2005 we landed in NZ for good. To cut a long story short: My parents had already arranged to buy a franchise motel in Rotorua and it was going to be the family business. 6 months in, and building had not yet begun so the search resumed for a suitable business to purchase, eventually buying a boat dealership in Auckland and so we moved once again. I always felt I would end up in Auckland anyway. The pace of life everywhere else felt awfully slow with Auckland the clear exception. After a few years working in the boat dealership, I went out and resumed my career in QA, with great success in that area over the next 15 years.
During that period of my life in NZ, the 2010s, it felt like the land of milk and honey. Anything was possible if you worked hard and everything was just nice. Life was good. I'm well aware that there was possibly some naivety there, Afterall, how many 20-somethings have their eyes fully open to everything that's going on outside of their own lives?
Housing is the problem
This is where I get onto the crux of the matter why we are leaving NZ.
Just about all western countries over the last decade have suffered very similar declines or are on the cusp of decline. You could call it greed or refer to it as late-stage capitalism, or simply blame the boomers. I can't explain it properly but it's the situation where the ladder has been pulled up, and gets pulled up higher every year. Covid then pulled the ladder up even higher. At the top end, Just look how much the wealth of the worlds big rich listers has increased in that time. Then there is the narrative around the Boomers hoarding their wealth and simply telling younger generations to work harder or pull themselves up by their boot straps.
The dream of working hard and forging a successful career in New Zealand, being able to buy a nice family home and even a small holiday home near the beach are dead for most millennials and younger. That wasn't the case for Gen X and the Boomers.
In NZ, the root cause of all this is Property.
There is no inheritance tax. No capital gains tax. All other investments are taxed. At the same time we have massive a infrastructure deficit for the growing population, which arguably could be tied directly to so much capital being tied up in property, and no tax take from all the profits from property sales. In short, not good for an economy.
For someone in NZ looking to invest, property is a no brainer. Housing is seen as the safest and fastest growing investment in New Zealand. Now, aside from hindering productivity and economic growth because all of that invested capital is completely unproductive, this has made property a commodity rather than peoples homes. Boomer's in particular enjoyed the biggest gains, the houses they bought years ago for peanuts have now multiplied in value many times over, and with values continuing to rise in the last decade, they used their new found equity and bought more houses to then rent out, primarily not for the rental income, but to sell them later for capital gains and fund their retirements. As a result, prices were driven higher and there is less housing stock for first home buyers, forcing many into a lifetime of renting.
Some people reading this probably think that sounds great, money to be made. But no, it's at the expense of literally everyone else. The housing stock was massively depleted due to houses either being left vacant (why bother with the hassle of pesky tenants if you can just sell the house in a few years for profit) or with the surge in Airbnb, with short term rentals not just being a NZ issue but a global one. All the new 'affordable' houses being built in Auckland are narrow and small townhouses, crammed together in large numbers with no gardens. If you want a family home with space for the kids to play, you need to pay moonbeams, and even then its likely to be old and cold.
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| My first home, it's now double what I sold it for . It's since been demolished and will be replaced with multiple small townhouses. |
My experiences with Property
At the tender age of 24, I purchased my first home. An average house on a good-sized section in a decent Auckland suburb for $410,000. This was already during a period where increasing house prices were a daily headline in the news, and that price seemed extortionate even then, let alone for a young person on a low salary, it was brutal. I had missed out on a number of properties as they were being bought by cash buyers or even sight unseen with unconditional offers, and with prices seemingly increasing every time you blink, I ended up buying that place after viewing it in the dark. In those days you had to be fast and get your offers in quickly otherwise it would be gone by the weekend...
To give perspective on how fast prices accelerated over the last 15 years, I sold that house 3 years later for $655,000, and now 10 years later its worth close to double that at $1,200,000. Insanity!
Nowadays me and my family live in a small, modernish townhouse in a gated community that's nice and low maintenance. It cost the same as that first house despite being smaller with less privacy and no gardens, still more than double it cost the previous owners though. We just wanted somewhere to live that's ours, if we make money when we sell that's a bonus, but that's a moot point when having to buy in the same market anyway. We could afford a larger and nicer house, but we would be mortgaged to the hilt with any hint of instability in employment being disastrous, and that's stressful hanging over your head. The small house with a small mortgage was planned around having that safety yet of being able to afford it if one of us loses our job, or such as now when we are down to a single income with Tomomi on maternity leave. I just can't grasp how people risk buying a house at 10x their household income personally, it's a recipe for disaster, and financially irresponsible for both borrower and lender. They have little choice however, it's that or rent for eternity, and paying rent on a pension just isn't possible.
The point I'm trying to make here, is that despite making good decisions at a young age, working hard and building a career, the ladder will always be out of reach for us now in terms of progress. Even though between myself and Tomomi we earn considerably more than the majority of the older generations, we are pretty much fixed in our lane. The same applies to people in other lanes of life too, with considerably more difficulty if they are not fortunate enough to own a home. The only way out of ones respective lane is to either get extremely lucky and find a windfall of cash from left field or to take on a massive risk starting some kind of business with the slim chance that it is successful beyond expectations (with all the stress that comes from starting and growing a business). Meanwhile the older generations are enjoying their holiday homes and looking forward for when they retire and sell off all their other houses at over inflated prices (tax free), to then hand down that wealth to their children (tax free) and further widening the wealth gap. Young people entering the workforce now simply have no chance, and how is it going to be for our daughter in 20 years time?
What about living outside of the cities?
In most European countries, the UK included, there are large enough towns outside of the major cities where one can live and find work, with good transport links into nearby cities for commuting too. Not so much in New Zealand. You could find a cheaper house well outside the few decent sizes cities, but it will be a dilapidated draughty and mouldy box that will still be overpriced, then you wont be able to get a job in the local area to pay for it. It used to be better, you could buy a cheap house and find a low paying job and still be OK, except the boomers decided to buy and build holiday homes in all of the nice spots, because they don't have to worry about actually working there.
Mass immigration hasn't helped. Yes, I myself am an immigrant so I see the irony. When I moved to Auckland 20 years ago, the population was below 1 million. It is now 1.5 million and it's noticeable everywhere. It certainly didn't always used to feel crowded, but it certainly does now, and that includes all the nice places within an hour outside of the city that I used to enjoy visiting. As such I don't enjoy getting out so much. So between a rock and a hard place, either live in a rural house that can barely be described as one but have no income, or live in a crowded city with a comfortable and modest life, but with no prospect of improving upon that even with another 30 years of working and with grim prospects for our Daughter. What's the point? I get that there are many doing it tough and it's about survival, and we are incredibly fortunate to be where we are now, but it's not a crime to want more from life.
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| Karekare beach, there are some stunning spots like this within reach of Auckland |
Closing thoughts
I think I've ranted enough, there's more I can list, such as our increasing political divide, inflation etc.. but I hope you get the picture as to why we would want to leave to New Zealand for a better life for our Family. It's all about realising what you want out of life, and although some are content with just carrying on exactly as they are, I want progress. Not in wealth as most do, but more living and less stressing, it's just not possible here.
The trajectory that western countries is on is surely not sustainable and I fear things are going to get harder still for most. Property prices in NZ will be kept propped up as they have been by successive governments, as Boomers vote, and they aren't going to vote for someone who is going to take their wealth away. At the same time I'm wondering where all the money is going to come from to pay the boomers for their overinflated properties when the 'great big sell off' starts happening as they look to cash in on their wealth on paper
All we want is to live somewhere nice and modestly comfortable without the stresses of chasing careers and high paying jobs. It's not a lot to ask for really.
To read about how we plan to do just that financially, check out this post here
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