Going, going, gone: The great Wellington exodus begins
Saturday, 31 August 2024
An out of work contractor, an open home, the finance minister flashing the cash.
The stuff of nightmares, according to 48-year-old Pete, the aforementioned unemployed contractor, who earlier this week spent eight hours on the Northern Explorer from Hamilton to Wellington staring out of a window as he pondered his – and his family’s –future.
A day or so before he had dreamt he and his wife had to sell their house. “We were doing an open home, and Nicola Willis blew through the place and says, ‘I'll have this. It'll make a great rental’.
“That was actually a nightmare I had.”
Pete, who asked that we not use his real name, is not alone in his unease. His anxiety may have manifested in a dream world, but in the real world the stress of living in an increasingly unaffordable city – particularly if you’re one of the 6000-plus public servants without work – is evident in the exodus out of it.
Te Hinemoa Hiroki-Tuiono and partner Aaron Moss are heading to Asia next week.
When the coalition government’s redundancy axe swung through the pair, both 26, opted to take voluntary redundancy and are now taking flight in the hope that somewhere out there is a better and more affordable lifestyle.
Childless and without the anchor of an unaffordable mortgage on an equity-losing home the decision, although nerve-racking, made financial sense.
Moss had been employed as an adviser with the Ministry for the Environment’s sustainability and climate risk team. Hiroki-Tuiono was and advisor at the same agency.
“We did the math and confoundingly, it's cheaper to travel abroad than to stay in Wellington. After just six weeks, the cost of airfares is amortised by the lower cost of living. Confronted with that, it just doesn't make sense to keep paying half our income to a different landlord every year,” Moss said.
Other factors that prompted the pair to up sticks, aside from the high cost of living, included job instability and a lack of job opportunities.
Like many others the pair rejoiced in in the compactness of Wellington, living between the hills and the sea, but the small city vibe also had its downsides and those, they argue, had intensified over the last year.
Said Hiroki-Tuiono: “It is utterly bleak. The cuts to the public sector aren't just constrained to the Government ‒ it's affecting the private sector as well. Small businesses in the Wellington CBD seem to be taking quite a big hit from this and there are hiring restrictions in the larger organisations too.
“Making the decision to leave was really difficult. I have met some amazing people in the public sector who work insanely hard. It has been awful to see their work degraded.”
Christchurch, says Andrea Skews. “Christchurch, Christchurch, Christchurch.” The Wellington real estate agent is straight into the reasons her clients are fleeing the capital.
“Houses are a lot cheaper in Christchurch. A lot.”
Trade Me’s most recent Property Price Index data backs that up, showing the average asking price in Wellington City in July was hovering around the $865,000 mark, while Christchurch’s was $678,100.
First-home buyers Rebecca Stewart and Josh Fuller recently went unconditional on a property in Mairehau, Christchurch, paying $640,000 for a three-bedroom home with a 15% deposit.
Skews says apartment listings in Wellington are through the roof as laid off public servants offload their city sanctums.
The same goes for houses. Whether they will sell is another story, but Skews reckons even the prospect of selling at a loss is not enough to spook some owners into staying.
“There’s people that need to sell – it might be that interest rates are too high for them –and they realise they’d be better off selling here and buying something cheaper down in Christchurch.”
Some are looking to rent out their properties until prices improve, though that could be a double-edged sword with a flood of rentals hitting the market – Wellington had a 55% rise in new listings in July, with 324 on the market, up from 182 in July last year.
“And prices aren’t going to flip overnight, so you’re talking years before they start to move again.”
Ironically, as the shift south continues apartment rental prices in the garden city are on the rise with Trade Me’s latest Rental Price Index showing an 8.3% increase over the last month. Wellington meanwhile saw a 2.9% decrease for town houses, although all weekly rents here remain an average $650, compared with $580 in Christchurch.
Pete, whose last six-month contract with a government agency ended in June, recognises the boom and bust nature of self-employment, yet he is seriously considering upping sticks and moving to the Gold Coast, taking his wife and two kids, a teen and a toddler, with him.
It would mean selling their house, or renting it out, but, like Moss and Hiroki-Tuiono, the family sees no reason to stay in Wellington.
“It’s grim, really grim. I’ve been visiting friends who live elsewhere and I don’t think they really understand how dire it is in Wellington at the moment. It seems far more acute than at any other points in Wellington's recent history.”
Unemployment figures bear that out. The annual average unemployment rate in Wellington City was 4.2% in the year to June 2024, up from 3.2% in the previous 12 months, and almost at Covid levels.
And compared with last year, job listings for roles in government and council have plummeted, down 43.7% year on year, according to Trade Me. Conversely the number of job applications for government and council positions in Wellington surged by 119.2% year on year.
Ben Pearson is director and general manager at Beyond Recruitment. He has a foot in both camps of the go-stay conundrum, with the public sector retrenchment and sluggish economy impacting both his work and home life.
The cumulative effect of higher interest rates and uncertainty about the future has forced businesses to be much more cautious about hiring, Pearson says.
“We operate out of Auckland and Christchurch as well, and those areas are definitely affected by economic conditions,” Pearson says. “But it’s probably not quite as grim as in Wellington.
“There’s definitely work that needs to be done, and we need to find people to do it, but there’s a general hesitancy to push the button which is understandable.”
With job advertisement numbers a key measure of the health of the labour market, Wellington’s 39% year-on-year drop to July indicates just how poorly the Capital is doing.
On the other hand the number of people applying for what few vacancies there are has soared, up almost 50% on the previous year, heightened, according to Pearson, by increasing numbers of overseas candidates.
“Like any person who works in Wellington, you can see that there’s a flow on effect to all types of supporting businesses, whether it’s a café or a retail store. And as a recruitment agency it’s definitely impacted our primary work. It’s been a fairly challenging time for the whole city.”
Challenging personally too. Pearson’s daughter Lily moved to Sydney in March.
“People who are in the earliest stages of their career are using the opportunity to go travelling overseas. We all know somebody who’s moved to Australia for work. So that’s definitely a thing.”
Then there were the regions, which, while not awash with opportunities were proving of interest to later-career types, many of whom were former public servants opting to change both their job and their lifestyle.
“They’re generally more flexible about taking on a role that might be the lesser than what they did previously, but they get the lifestyle uplift.”
Pearson’s 24-year-old daughter Lily is also in recruitment. Her move across the ditch was similarly about lifestyle change, although there was also the added incentive of better pay and considerably better career opportunities.
“Having spent five years living in Wellington, I found it was really starting to lack vibrancy and there just isn’t much going on for people in their 20s. Sydney is a very lively city … with much more to do.”
She is earning considerably more in a less demanding role than at home and has found that while rents are high they are more than offset by cheaper groceries.
“The situation in Wellington is pretty miserable. It re-enforced my decision to move to Australia and I am happy that I did.
“I have had a few friends who are still in Wellington say they are having thoughts about making the move too. I’m definitely not thinking about coming home any time soon.“
Unfortunately she’s not the only one. A mum, whose son and several friends have recently made London home, reports they all feel very negatively about New Zealand at the moment. “They’re depressed about all the regressive things that are happening and are very disinclined to come back home. And that’s despite the crappy job market and difficulties with flats over there.”
Still, there is perhaps some light at the end of the tunnel. Ben Pearson expects that come March 2025 we should see a return to a more stable employment market, albeit not at previous levels.
Wellington events specialist Sarah Meikle also remains upbeat.
“All cities going through cycles and it’s definitely challenging in Wellington right now. But, we have been here before. What Wellington needs is a strong vision for where it wants to be in five years, 10 years, 30 years and for us all to get behind it.
“Yes it is tough out there right now and everyone has a role to play to help Wellington through. Wellington has a fantastic restaurant, hospitality and retail sector, so get out and support them so that they are part of the future of our fantastic city.”
By the numbers
The disappearing jobs: Proposed and confirmed disestablished roles combined has surpassed 6000.
Waving goodbye: Infometrics data shows that across all age groups, the June 2024 year saw a net loss of 55,300 New Zealand citizens (Nelson city’s 2023 population was 55,600). For every migrant arrival, three headed overseas. Over half of those headed to Australia.
On the hunt: Jobseeker Support recipient numbers continue to rise at a concerning rate in Wellington City, up 13% over the year to June 2024. Wellington’s unemployment rate also continues to climb, up to 4.2% over the year to June 2024, matching the national unemployment rate.
Property price drop: The average asking price in July fell by 4.4 per cent to $864,100, the lowest since January 2021.
Property listings rise: Wellington saw listing numbers jump in July, up 47%. In comparison followed by Auckland had a lift of 34 per cent.
Young and hungry: Nationwide employment rates for 25 to 34-year olds are down by about a percent. The number triples in Wellington to 3.3%.
Sources: Infometrics and Trade Me