Southland most affordable

December 4, 2008

Following the previous post on Queenstown Lakes being the most affluent district in the country, a related report  found that Southland had the most affordable property.

The most important measure of affordability is to compare house prices with income levels. . . (then)  we took our top 20 performers and scored them against the primary measure of house price v. income levels.  But then we also looked at each place and awarded further points based upon how well they ranked against:

   *  Rent / income levels

   *  % of people living in crowded dwellings

*  Unemployment rates

   *  % of people living in owned homes

* % of people living in high deprivation deciles

And the top 20 most affordable places in New Zealand were:

 

1

Southland District

2

Selwyn

3

Timaru

4

Waitaki

5

Ashburton

6

Waimakiriri

7

Manawatu

8

Invercargill

9

South Taranaki

10

Waikato

11

Masterton

12

Horowhenua

13

Waipa

14

Wanganui

15

Gisborne

16

Franklin

17=

Upper Hutt

17=

Rotorua

19

Palmerston North

20

Dunedin

 

Snapshots:

 House price / income ratio

Best

Southland District

3.6 times income

Worst

Tauranga

8.1 times income

Rent payments / income ratio

Best

Southland District

12% of income

Worst

Dunedin

28% of income

% of people in crowded dwellings

Best

Southland District

3%

 

Selwyn

3%

Worst

Manukau

25%

% of people in the 3 highest deprivation deciles

Best

Selwyn

1%

Worst

Far North

63%

% of people unemployed

Best

Southland District

2%

 

Queenstown

2%

Worst

Whakatane

8%

 

Far North

8%

% of dwellings owned

Best

Waimakiriri

71%

Worst

Auckland

42%

 

Dunedin’s poor showing in the income to rent ratio is easily explained by the high proportion of out-of-town students who live there in rented flats.

And Selwyn which was the second most affordable district was also the 6th most affluent which is a happy combination.


Queenstown Lakes most affluent

December 4, 2008

 

If affluence counts then Queenstown Lakes is the jewel in New Zealand’s crown.

This was the finding of Stephen Hart in a study commissioned by the ASB.

We looked at the average sale prices of residential homes in over 70 territorial authorities from all over New Zealand.  We then took the top 20 highest priced places and dug beneath the surface to see how they stacked up in the affluence stakes.

We didn’t just consider house prices; we also examined:

* Households earning more than $100,000 a year.

* Homes least likely to be in deprived areas.

* Percentage of residents who have a degree.

* Lowest unemployment rates.

* Residents who are Chief Executives, General Managers or Legislators.

Points were awarded based on performance across each of these criteria, then added up to create a league table of New Zealand’s Most Affluent Places.

And the winner was Queenstown Lakes. 

That’s not just the town of Queenstown, it’s the whole district which includes Arrowtown, Wanaka and Hawea and all the land in between including farms, ski fields and wineries.

Queenstown Lakes scored well against all of the set criteria, especially in terms of jobs; its unemployment rate of 1.7% was lower than any of the other contenders.

All places have some degree of socioeconomic deprivation, it’s measured in deciles with 1 being the least deprived and 10 being the most deprived.  On average 30% of New Zealanders live in deciles 1 to 3.  Not so in Queenstown where more than two-thirds of residents live in the top three deciles.

Back on the jobs front; Queenstowners are a well qualified bunch with 19% possessing a Bachelor’s degree or higher, the fourth highest in the country.  Queenstown also came fourth in terms of its percentage of population who are in the top occupation category of Chief Executive, General Managers and Legislators, only surpassed by Rodney District, Auckland and North Shore Cities.

It’s hard to know which is the cause and which is the effect but higher property prices can only be afforded by people on higher incomes and people on higher incomes can afford higher prices.

The top 20 most affluent places were: 

1

Queenstown Lakes District

2

North Shore City

3=

Wellington City

3=

Auckland City

5

Rodney District

6

Selwyn District

7

Franklin District

8

Porirua District

9

Manuaku District

10

Tauranga District

11

Tasman District

12

Central Otago District

13

Waitakere City

14

Kapiti Coast District

15

Thames Coromandel District

16

South Wairarapa District

17

Lower Hutt City

18

Taupo City

19

Christchurch City

20

Nelson City


Negotiating from position of strength

December 4, 2008

Reserve Bank governor Alan Bollard is urging trading banks to pass on reduced interest rates to customers.

That could require negotiations with bank managers and it’s important to do that from a position of strength:

jock

(The cartoon is from Jock’s Country Life by David Henshaw, published by Allen Calendars 2007.)


Playing cowgirl at Dome Hills

December 4, 2008

We were among the people invited to listen to then Otago (now Waitaki) MP Jacqui Dean declare the lodge at Dome Hills  open on a perfect autumn day.

Since then visitors from thoughout New Zealand and overseas have enjoyed a taste of life on the high country station in the hills between North and Central Otago.

Among them was NZ Herald writer Joanna Hunkin who wrote about her experience playing cow girl  on the winter muster.


Treasury BIM links economy to quality of life

December 4, 2008

A question from the floor at a public meeting in Wanaka three years ago asked then National Party leader Don Brash why he always talked about money and the economy rather than things that mattered like health and education.

He responded that a growing economy was the means to provide better social services.

This is echoed in Treasury’s Briefing to the Incoming Minister of Finance  :

Future gains to economic growth will need to be driven by increases in productivity growth. Improving productivity will have benefits for individuals, businesses and for society as a whole. A more productive New Zealand will offer our people opportunities to earn world-class incomes without having to go overseas to achieve this. It will allow New Zealand businesses to provide sophisticated products to the world without having to relocate their head offices. Higher incomes will underpin a public sector that can provide high-quality services, which will lead to improved social outcomes in crucial areas such as health and education.

Higher productivity will make New Zealand a more attractive place to live, work and do business with and from.

That reminds me of this quote from Margaret Thatcher:

No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.

This is a simple concept but achieving the economic growth we need to provide the standard of living and social services we want is more complicated and we can’t leave it all to government.

They can implement policies which enable and encourage improved productivity but they can’t create wealth, thats up to people and businesses.


Ag commodities down but will lead 2009 rebound

December 4, 2008

The ANZ Commodities Price Index fell 7.2% in November, contributing to a 21% fall in four months.

Prices for dairy products fell 12% and have almost halved from their record levels a year ago. Prices for pelts tumbled 41%, the biggest decline among products tracked in the index. Beef, wool, lumber and aluminium all fell more than 10%. Seafood prices dropped for the first time in 18 months, sliding 0.6%. Lamb rose 4.3% and kiwifruit gained 0.3%.

Producers were cushioned from the slide in commodity prices by the weakening New Zealand dollar and the ANZ New Zealand Dollar Commodity Price Index was down only 1.8% in the latest month.

“Although the currency softened further in the month, it failed to match the drop in value of the commodities that we monitor,” ANZ economist Steve Edwards said in a statement. “It is clear that a weaker currency is acting as a buffer to falling commodity prices.”

Prices in yesterday’s on-line auction by Fonterra continued to slide with an average price of $4203.50 ($US2223) a tonne, 14% lower than last month’s auction and a fall of 49% since July.

Fonterra commercial director of GlobalTrade Guy Roper said the economic crisis had resulted in a significant drop in the demand for dairy commodities and a continued decline in prices had been expected.

“There will continue to be downward pressure on prices, until either the supply of product declines, or buyers have confidence that the global economic situation will improve,” Roper said.

Fonterra has been criticised for its auction which some feel is leading the market down. The Bull Pen disucsses that here.

However, the news isn’t all bad. Stock & Land  expects agricultural commodities to rebound next year.

After the dust settles from the sell off across commodities triggered by the global financial crisis, agricultural commodities will benefit from a secure demand outlook and tight supplies to outperform metals and oil in 2009.
Regardless of the gloomy macroeconomic outlook people still need to eat; therefore agricultural commodities will be more resilient during the economic downturn.

“Demand for agricultural commodities tends to be less elastic, less responsive to economic factors, more responsive to population,” said Lawrence Eagles, a commodities analyst at J.P. Morgan.

 

That’s encouraging because the MAF Briefing to Incoming Ministers warns the outlook is uncertain:

 

Over the next 20 years, New Zealand’s food and fibre producing capability will become increasingly important. Globally, rising population and economic growth is expected to increase demand for agricultural and forestry products. At the same time land and resources, such as freshwater, available for food and fibre production worldwide is likely to decline.

Despite this favourable long-term outlook for New Zealand’s primary production sectors, our industries, environment and broader society face a complex set of challenges to reap future opportunities. These challenges are exacerbated by the current global financial crisis that continues to unfold with uncertain impacts and duration.

Added to that is the growing threat of drought.

The contrast between irrigated and dryland in North Otago increases by the day, showing how badly we need rain and most of the east coast of both islands is similarly desperate for rain.

 


Slogan not logo the problem

December 4, 2008

My email to the Electoral Commission asking why Rodney Hide’s jacket with an Act logo breached the Electoral Finance Act when Metiria Turei’s bathing suit with a Green Party logo didn’t (three posts back) got the following response:

The decision related to the election slogan on the jacket – not the logo.

I emailed back asking if a decision had been made on logos, I’ll let you know when I get an answer.

UPDATE: Just got an email saying:

There has not been a published decision on logos

 I replied asking if that meant there had been an unpublished decision and if so when it would be published.

Sigh.


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