Auckland home buyers may be able to pick up bargain properties close to the city but these are likely to be one and two-bedroom apartments, not a three- or more-bedrooms that family buyers are looking for.
If you’re wanting a yard, or family-friendly facilities, it’s out to the suburbs you go. There are affordable suburbs in the not-too-distant reaches of Auckland, but generally housing affordability comes at a price: commute time and costs.
John Bolton, head of Squirrel Mortgages, says that commute costs are not examined by banks when assessing budgets for mortgage applications. But he always gets clients to think hard about the logistics of living further out from work for the sake of a cheaper house.
“Some clients have not had that discussion. It’s more about logistics and time,” he says. “Who’s dropping off the kids? what time do you need to leave to get to work? And the biggest challenge is that often each person [in a couple] is working in different locations, so multiply the cost of owning a car by two. It’s a huge expense.”
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Take Pukekohe. With average house price of $680,000 it’s one of Auckland’s most affordable suburbs. But it’s also a lengthy 50 kilometres from the city centre. The AA, using its average vehicle running cost of 25 cents a kilometre for fuel, tyres and repairs (but not fixed costs like rego, insurance or depreciation), calculates that would mean an average cost of $25 per day (for a two-way trip). If you’re not one of the lucky executives getting free parking at the office, add in parking at around $24 a day (early bird arrangements could be around $13 - 15). Per week, that’s adding up to $190 for one car.
Bolton’s sums on the fixed costs of car ownership add another $4000 a year, offset only slightly by the possible cheaper costs of living for groceries, tradespeople with lower overheads and so on.
And then comes the kicker - how much time the commute will take. NZTA, using GPS tracking from TomTom, reports average commute times from Pukekohe or Pokeno to CBD at nearly 80 minutes (and that’s not counting the slow trip to reach the motorway on-ramp). The Manukau to CBD leg alone is 33 minutes (at the peak 8am - 9am time slot), and local anecdotes mention commutes that start at 6am (or even 5am) and can run to two hours or more.
Taking the train eases some of the pain. At a 20 minute frequency in the mornings (you still need to make the tiresome change at Papakura to join the electric train) the journey takes just over an hour at peak times, and sets you back $15 a day (return), or $75 a week. But not many jobs, or lifestyles, allow the ease of not running errands or crossing town, so many people have no choice but to take the car.
Compare that with the with the extra mortgage to move closer to work. At 5% (the current 2 year fixed rate), an extra $100,000 costs you an extra $135 per week, or at 6% $149.
North and West maybe easier, if you live near the rail line and don’t have to run the car. With six peak time trains an hour from Ranui (average house cost just over $700,000) and Swanson (averaging $822,000), a travel time just under an hour, and daily return ticket on HOP of $9.60, the weekly commute cost of $48 is well below the added mortgage cost of another $100,000 for housing. The drive cost is almost identical, according to the AA. Closer to town, Avondale (average $833,000) is on the rail, but Te Atatu Peninsula ($951,000) means a slow drive (and, without a dedicated bus lane, equally slow buses).
In March this year NZTA clocked the peak trip at 50 minutes from Westgate, 34 minutes from Lincoln Road (up 10 minutes on 2017).
“But remember, people may be choosing further out for lifestyle reasons - being closer to beaches, more land - so decisions are not cost driven,” says Bolton.
