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Auckland - the city of 1000 mortgage payments

Everybody loves Auckland. Wherever you go in this country, people just love to talk about it. "I never get sick of hearing about Auckland," they will say, "the people there are great".

You don't even have to reveal that you're an Aucklander. You can be in a cafe in Wellington, or a pub in Timaru, or a mountain hut. Right out of the blue, they'll just start raving about Aucklanders and everything they like about them – the way they talk, the way they dress, the things they do with their money.

"I can never hear too much about their problems," they will tell you.

This is why, even though this column reaches parts of New Zealand that are not Auckland, I never hesitate to mention it. All of us in Auckland feel that way. We know the rest of the country is hanging on for the next thrilling instalment of the adventure that is Auckland: its sclerotic roads, its million-dollar brick and tile houses, its salaried drudges slogging to pay their unfeasibly huge mortgages, their sole daily joy their $5 lattes.

Who could begrudge them a consoling coffee? Who could ever be cold-hearted enough to think to mock them for it?

The obvious solution to the Auckland problem, where houses cost far too much and infrastructure runs so far behind demand, is to steer people towards the many other New Zealand towns and cities where the houses are affordable and there's a surplus of infrastructure.

But of course there needs to be jobs, and who will create them? And even if we tried, would people go there?

This is the age of the super city, towards which everyone is gravitating, the popular argument runs, and Auckland is our super city. Marvel as it surges forward, like Sydney, like London, all those super cities where the economies are pumping, and the Russian kleptocrats gather, propelling property values into the stratosphere, dragging ordinary people along for the ride.

How does that play out in a sustainable way? You'd imagine people might act rationally, but when there's money to be made, forget about it.

Working on the basis that values will keep rising, ordinary people commit themselves to ever more debt, even though their incomes don't warrant the sort of money they pay for their property, and where does that take a super city in the long run?

For now, it means people paying decades of mortgage interest to keep the banks in fat profits. In the longer run, who knows? Favelas ringing these super cities as the numbers of people too poor to afford a roof continues to rise?

Featured on Stuff last weekend were photos of filthy disgusting hovels being rented out at $250 a room per week and if that's not emblematic of an economy bent too far out of shape, I don't know what is.

My fond fantasy imagines a government that steps in – or local government, I'm not fussy – and makes housing affordable. It buys land, it spends however much it takes to build houses and apartments, and it sells or rents them on terms that make them forever affordable for ordinary people: your roof over your head, be it a house or an apartment, for a quarter of what you earn, say.

It's easily enough done, if the government is willing to stop looking for a financial return on that investment and instead settle for a social one. It's not even as though it hasn't been done before. And then maybe you try some regional development.

Conventional wisdom says that you leave it to the market, but conventional wisdom is always frightened of straying too far from the status quo.

Consider Medellin, Colombia: the world's most violent city a mere two decades ago, utterly lost to the drug cartels. Medellin is a changed city today, homicides are down 95 per cent, extreme poverty down 66 per cent and researchers call it a "pioneer of the post-Washington consensus". It wasn't market forces that made that happen.

Our status quo is: empty towns and provinces around the country, bristling with a hostility to an Auckland that is spiralling away from affordability. Our status quo is: poor prospects for our young people and $250 a week for a hovel with no toilet.

This surely cannot be the best we can do.
Real Estate Investar Editor
Real Estate Investar Editor
Real Estate Investar provides intelligent software, tools and data to help you save time and make money in the residential property investment market.

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