Subject: Economic Refugees from New Zealand Urban Areas thanks to distopian Smart Growth

Since the release of the 2007 3rd Edition Demographia International Housing Affordability Survey - the reporting and commentary by this countrys media has generally been of an extremely high standard. The only exception has been Peter Luke of The Press elitist perspective today. Obviously, snobbery is alive and well in Christchurch.

Simon Collins (who I dont know) of the New Zealand Heralds article below is excellent in explaining how Kiwis are being forced to flee the inflated prices of the urban areas (deliberate urban local government policy unfortunately) and forced to try and make a go of it, within areas without the same economic opportunities.

The article highlights a 2004 Lincoln University Study (one I was unaware of) which found at that time there were 140,000 "lifestyle" (more appropriately "life sentence") blocks, covering an area of 730,000 hectares (7,300 square kilometres). This Study found that a further 6,800 lifestyle blocks were being created each year, requiring about 37,600 additional hectares (37.6 square kilometres) of additional farmland each year.

Assuming that the household size is around 2.8 people per household, this would suggest that about 19,000 new people a year are moving to these lifestyle blocks.

We do know that the "annual turnover rate" of these lifestyly blocks is substantially higher than that of conventional suburban residential housing. Around - once every 3 years for the former - once every ten years for the latter. The joke is that the former live in them for a year and spend the next two years frantically selling them - as they realize the true cost, lost opportunities and inconvienience of the so called "lifestyle".

More often that not these lifestyle blocks are poorly maintained and unproductive.

Smart Growth ( or more appropropriately Dumb Density ) should therefore best be descibed as "sprawl in overdrive", as productive farm land on a massive scale is generally made unproductive by economic refugees from the artificially inflated urban markets.

What the Smart Growthers fail to realize is that urbanization is a natural process of human consolidation, that only takes up well less than 1.4% of New Zealands land area in total. To allow further "natural urbanization" (throw in the word "sustainable" for good measure) to occur around our urban fringes would require around one hundredth of one percent of our total land area per year (about 29 square kilometres annually). We could not urbanize any more half a percent of New Zealands total land area over the next fifty years if we tried !!!

Our residential property market is so grossly over inflated, that in US dollars (at current conversion rates) it is worth more than the residential real estate of Houston Texas ! Go figure that out ! The Greater Houston area has a population of around 5.2 million people - New Zealand 4.1 million - Houstons "wealth" in terms of GDP or Gross Area Product is twice New Zealands - $US220 billion verses SUS110 billion.

The Demographia Survey with a global distribution is telling the world that on average Australians need 6.6 times annual income to buy a house, New Zealanders 6.0 times, Ireland 5.7, UK 5.5.......and the US 3.7 and Canada 3.2 times annual earnings to buy a house.

Guess where people and business will be attracted to - if they want the best lifestyles and the capacity to be more competitive. The real "scarcity" today is people - whether skilled ot unskilled.

Yet we were affordable at around 3 times annual household income 10 and 20 years ago.

Kiwis and Aussies - how did we create this mess? Better still - what do we do to right this wrong?

Hugh Pavletich

Co author - Annual Demographia International Housing Affordability Survey

www.demographia.com

ENDS

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