Auckland households have $96 less spare cash a week than a decade ago

Monday, 6 May 2019

A typical Auckland household has $233 a week less spare cash than one in Wellington, and $220 less than a Christchurch, compared with a decade ago.

All three New Zealand cities are worse off than Australia's best performing cities, Perth, Brisbane and Adelaide, according to new research by consultants PWC.

The study looks at which of 11 Australasian cities makes the best case for attracting the skilled talent needed to boost their economies.

PWC weighed up the rate at which incomes had risen in each city, compared with the rising cost of living such as housing, transport and food, and tax.

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Auckland emerged the worst of the 11 when measuring the end result for a household with a median income.

The median Auckland household has $96 a week less discretionary income than a decade earlier, while its Wellington counterpart has $137 more to splash around and $124 in Christchurch.

Aucklander's have matched Sydney in the decline of discretionary income

Auckland is the only city where there is less to spend on discretionary items than 10 years earlier.

The country's biggest city fared worst in both income growth and rising costs, with incomes almost flat at 0.8 per cent higher than a decade earlier.

Overall, smaller centres Tauranga, Hamilton and Queenstown, slotted in between Auckland and the other two major centres.

Sydney and Melbourne, like Auckland, fared worse than their domestic rivals, with income growth more than offset by sharp increases in costs, especially housing.

Higher housing and mortgage costs weighed heavily on Auckland, where a new resident arriving in the city in 2018 would pay nearly twice as much for a median-price house, and be facing 15 per cent more in repayments, than they would have in 2008.

In Perth, a new arrival would be paying 40 per cent less in mortgage repayments than a decade earlier.

Since 2012, Christchurch has been the only New Zealand city measured where discretionary income has grown, while house prices have remained flat.

The trans-Tasman league champions, Perth, Brisbane and Adelaide blended flat or even falling living costs, with weak income growth.

Sydney and Melbourne, like Auckland, fared worse than their domestic rivals, with income growth more than offset by sharp increases in costs, especially housing.

PWC said the measure of costs and income, was one element in determining a city's competitiveness in trying to attract skilled talent, and that New Zealand faces strong competition from Australian rivals.

The firm's New Zealand chief economist, Geoff Cooper, said with the six surveyed cities accounting for nearly three-quarters of the country's growth, changes were needed in improving their competitiveness.

Cooper said New Zealand needed to follow Australia's example and have a Minister for Cities, to focus on the blend of key issues that make a city competitive.

'We say a minister for cities needs to take a holistic view of urbanism, take a comprehensive view of living costs,' Cooper told Stuff.

'Auckland needs an all-of-government Economic Competitiveness Agenda - this should address a variety of issues such as sustainability, infrastructure and quality of life.'

Cooper said lower living costs, lifting wage growth and overcoming labour shortages were also priorities.

'Auckland is New Zealand's most internationally competitive city, but it faces significant challenges,' said Cooper.

Auckland Council's economic development agency ATEED acknowledged the city's challenges, but said it remain a magnet for migrants and returning New Zealanders.

'They're attracted by economic opportunities combined with the vibrancy of what is now a genuine international city with a world-class waterfront, events and experiences,' said the chief executive Nick Hill.

'However, the reduction in relative disposable income is a concern' he said.

Hill said while the size of Auckland's economy was growing, the per-capita growth - productivity - remained low at 1 per cent.

'A lack of productivity has been recognised as a national issue, but is even more critical in Auckland,' said Hill.

Hill said ATEED was working with a range of partners to grow innovative and export-focussed businesses, and help attract investment and talent.

ATEED agreed with PWC that better regional and city-based data would be helpful.