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This city in New Zealand is paying people to move out

This city in New Zealand is paying people to move out

Auckland is cutting cheques of up to $5,000 New Zealand dollars, or about CA$4,557, for residents who are willing uproot and move elsewhere as a means to stem overcrowding in the city.

The relocation grants were made available Monday, for people who live in social housing, are on its register or are eligible.

In a statement on government’s website, New Zealand’s Social Housing Minister Paula Bennett said more than 130 people had already expressed interest in the grant. 

For those people who may want to move to cheaper regions, where they may have family and other support networks, this grant will remove the cost barrier that may be preventing them from making the move,” she said in a press release.

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Auckland has become one of the most expensive cities in the world to buy a home, with property prices rising 77.5 per cent over the last five years. The average home in New Zealand’s largest city, which is home to nearly 1.5 million people, fetches on average NZ$940,000 or CA$856,891, according to CoreLogic.

Property values in Auckland have increased 15.4 per cent since last year and 3.3 per cent over the past three months, according to Quotable Value, a state-owned market-valuation service.

“Throughout May, we have seen a continuation of the buoyant market conditions experienced during April, and values are rising rapidly across the city again,” James Wilson, a registered valuer for Quotable Value, said in a release on the website earlier this month.

“Agents are reporting a shortage of listings, with well-presented good quality stock moving increasingly quickly, in some cases offers are made and accepted without the property reaching the wider market.”

The relocation grants, which are earmarked for costs related to moving, bonds and other expenses, can be used to move into social housing or a private rental.

The sum available is dependent on a variety of factors, such as distance moved, household size and the amount of the recipient’s belongings.

“This is voluntary and may not be for everyone, but it just one of the many initiatives in place or being rolled out to help people in a very tight housing market,” said Bennett.

Low interest rates, rising migration, overcrowding Auckland public housing and wage stagnation has caused many of the city’s residents to feel the pinch.

A homeless man keeps warm in the doorway of a central city shop in Auckland. (Getty Images)
A homeless man keeps warm in the doorway of a central city shop in Auckland. (Getty Images)

The initiative, which was announced in January, was originally designed to help people on the country’s social housing register but has been expanded to include the homeless as the number of people living in cars, tents and garages came to light.

Last month, a Salvation Army spokesman said the garages on some streets in South Auckland are filled with people who have been unable to find housing.

In April, the governor the Newland’s Reserve Bank, Graeme Wheeler, also expressed his concern about the housing market in Auckland.

There are some indications that house price inflation in Auckland may be picking up. House prices remain at very high levels and additional housing supply is needed," he said in a statement.