Urban drift
With Covid prompting some to leave big cities, Miriam Bell finds out how it has changed the regional housing markets.
Henry and Donna Mulligan had been thinking of leaving the city for a less urban, more relaxed lifestyle for some time, but Covid pushed them into making the move.
The pandemic made them realise that work is not the most important aspect of life, and it was time to get out of the corporate world to spend more time with their young children, Henry Mulligan says.
Originally, they wanted to buy a section and build a new family home in Mangawhai, north of Auckland, but they ended up buying a house in the township that they liked.
‘‘We bought in late 2020 but rented it back to the owner for a while, and then we finally moved up from Auckland in October,’’ he says.
‘‘Both of us are able to work remotely, and there is huge demand for skilled people in our professions so that ensures we have financial security.’’
The family is happy with their decision and love their new home. Henry Mulligan says the weather is beautiful and there are lots of young families in the community. ‘‘We go to the beach every day, and the lifestyle is great.’’
And the Mulligans are not unique. They have met many other people who have moved to Mangawhai from big cities like Auckland, Wellington, and even Christchurch.
It seems many New Zealanders are rethinking where they want to live, with an urban drift of people leaving big cities to buy homes in smaller centres now firmly entrenched.
Last year, Auckland’s population fell for the first time ever, according to Stats NZ. Its latest figures show Auckland’s population was down by 0.1% in the year to June 2021.
This is considered significant as over the previous 20 years the region had average growth of 1.8% a year, above the national average of 1.4%.
While Covid’s impact on international migration is one reason for the fall, migration from Auckland to other parts of the country is another. Economist Benje Patterson says over the June 2021 year, Auckland lost a net 13,500 people to other regions. That follows net internal migration losses of 11,400 and 11,100 people in 2019 and 2020 respectively.
‘‘People are definitely leaving Auckland for smaller centres. In the Wellington region the very rapid population growth is actually on the periphery, heading into the Kāpiti Coast and Wairarapa.’’
New Zealand is not alone in seeing a trend of urban outmigration, he says. Population growth in regional Australia outstripped that in cities, such as Sydney and Melbourne, for the first time in more than 40 years last year.
In the United States, experts say the numbers relocating from large cities, such as New York and Los Angeles, is at a level unseen in decades.
Stephan Whitaker, from the
Federal Reserve Bank of Cleveland, estimates it was more than double pre-pandemic figures in the second quarter of last year.
Patterson, who relocated to Arrowtown several years ago, says Covid may have accelerated the trend here, but the urban drift was happening before the pandemic.
Rising house prices in the cities have been a big ‘‘push’’ factor since about 2013.
‘‘Once people realised it was a viable option, they started to look further afield to areas that offer a better lifestyle. This became a significant ‘pull’ factor, and Covid has added to that as people reassess what they want,’’ says Patterson.
Employers’ increased acceptance of remote working further enables the trend, he says. ‘‘But it is not the reason for it, it is a tool that makes it possible for people to have the lifestyle they want.’’
Where are those leaving the big cities, buying properties? Patterson’s research shows Aucklanders are heading to Northland, Waikato, and the Bay of Plenty.
Queenstown-Lakes is also popular and there is an emerging trend into Hawke’s Bay and Nelson-Tasman.
And CoreLogic analysis of buyer classification figures in three popular destinations – Nelson, Napier and Whangārei – suggests the number of ‘‘movers’’ from Auckland and Wellington is on the rise.
CoreLogic chief data scientist Kelvin Davidson says in Napier, Auckland movers increased their market share of purchases from 2% in 2020 to 3.4% last year, and Wellington movers’ share increased from 2% to 3.1%.
In Nelson, the big shift came from Wellington movers whose share went from 0.9% to 2.9%, and inWhangārei, Auckland movers went from 5.4% of all market activity in 2020 to 8.1% last year.
Davidson says Aucklanders and Wellingtonians have always been a subset of these markets, but the proportion of activity they account for has increased.
‘‘These figures don’t include first-home buyers, who may also be relocating to these areas because of more affordable prices. This means it is hard to quantify how the uptick may be impacting on these markets.’’
Real estate agents in these regions say the trend is a positive one. Property Brokers Napier area manager Grant Bailey says Hawke’s Bay has great weather, great beaches and great wine, so it has long had a lifestyle pull.
Over the pandemic period there have been a lot of Aucklanders active in the market, he says. ‘‘We’ve seen many sales to Aucklanders. But it is a steady flow rather than a massive influx.
‘‘The ongoing interest is good, and it means Aucklanders who can capitalise on the increases in value in their properties can spread the love in our market.’’
Richard Lyon, from Eves Real Estate Whangārei, says the urban drift is very real, and that of his recent sales half were to Aucklanders. There was a phase when it was people buying investment properties, but that has changed and the people buying are moving to Whangārei, he says.
‘‘More affordable prices, lifestyle and the ongoing extension of the motorway north from Auckland, which improves travel times, are attracting buyers.’’
But the demand supports the Whangārei market, and the new arrivals benefit the community, he adds.
Henry and Donna Mulligan moved from Auckland to Mangawhai last year.