Auckland – the land of opportunities….or is it? What’s the real cost of living in Auckland when compared to a province like Marlborough? While statistics have some limitations, let’s use them to have a look at three key considerations for those looking for somewhere to settle.
I can earn more in Auckland right?
Statistics NZ estimate the weekly median (half earn more, half earn less) annual income in Marlborough is $28,820 compared to $38,010 in Auckland, equating to $9,190 pa. or around $176 / week before tax. So on the income front, Auckland wins and it would be fair to say with a larger population base there will be more employment opportunities. Some living expenses may be cheaper in a larger centre but expect a lot more to be spent on petrol for the car.
Great, but I need to buy a house - how much will that cost?
But does that little bit of extra income in Auckland cover the increased housing costs? According to Real Estate Institute of NZ figures for May 2015, the Auckland region median house price is a whopping $749,000 compared to $289,500 for Marlborough / Kaikoura region.
For an Auckland home buyer with a 20% minimum house deposit, this equates to a loan of $599,200 (assuming of course you can raise the deposit of $149,800 needed in the first place with further Auckland loan restrictions flagged by the Reserve Bank). The median Marlborough property purchaser will need a considerably smaller deposit of $57,900 and end up with a loan of $231,600 at 80% borrowing. The Auckland homeowner will be making minimum loan repayments of $739 / week at 5% pa. interest over a 30 year loan term compared to just $286 / week in Marlborough. Sure there may be better opportunities for capital growth in Auckland property but you have to live somewhere and still have to make the loan repayments in the meantime! Oh and by the way, the total interest cost over the entire loan term assuming a stable interest rate? $555,059 in Auckland vs $214,536 in Marlborough.
Ok, so how long will it take to get from my average new house to work?
The NZ Household Travel survey shows the average Auckland commute time (those travelling into the CBD) at 24.7 minutes, although we have all heard horror stories of many hours spent crawling along in peak hour traffic. It will come as no surprise that commute time figures are not available for Marlborough due to……well the lack of traffic really! Marlborough residents have time for an extra sleep in before work, do a day’s work and be home to get the dinner started before Aucklanders have left the motorway. Did we mention the parking cost in Auckland, assuming you can find one? Plenty of parking here in Marlborough!
So, Skytower vs Clocktower - who wins?
We realise that life is more complicated than this but it makes you think doesn’t it! If you want more potential to earn a higher income, save a much bigger house deposit, borrow a significantly larger amount of money and spend more time sitting in the car on the way to and from work then live in Auckland. If however, you are a smart person who understands money isn’t everything, appreciates a relaxed lifestyle, who would like to buy your own home but a huge mortgage scares you and you want the ability to walk or bike to work…welcome to Marlborough!
Ps. Did we mention the Marlborough Sounds, wineries, breweries, cafes, Omaka Aviation Museum, the climate, hunting, fishing………….
Sources:
REINZ Regional Commentary May 2015
Statistics NZ: Median Annual Earnings
Statistics NZ: NZ Household Travel Survey
Statistics NZ: NZ Income Survey June 2014 quarter