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Thread: Was the move worth it?

  1. #1
    Join Date
    Feb 2013
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    Default Was the move worth it?

    Hi forumites

    I have been reading this forum for a number of years, going back to 2006 and well I'm finally going to be in a position to submit my EOI in 2014. I have been to NZ every year for the last 7 years so it's not like I don't know the country either so this isn't a blind move but visiting isn't the equivalent of living and working and this is where I'm having concerns.

    First off, my biggest concern is money or more aptly put, what is going to happen to my career. I work in IT and I'm currently a development manager for a very large insurance company in Philadelphia. My annual salary is >$120k with a 36% bonus and 32 PTO days per year. Prior to this role I was an aVP for Barclays so I'm marching right up through the middle management chain. In fact, in my 19 year career I've never worked for a company that wasn't Fortune 200 or higher. My concern is that will I be able to sustain my career and what I've grown accustomed to salary-wise? I look at the salary calculators and while it would appear the opportunities are there, are they really? Also, because of my career experience, it would appear that I maybe limited to only Auckland and while that is fine, I would really like to move to Tauranga as that is favorite place in NZ.

    Second is home prices and how do these lower salaries pay for massively overpriced homes? How does a country with an average salary of $60,000 sustain a housing market where the average price is $400,000? I wouldn't be able to afford a $400,000 home here in Philly on my current salary. Are mortgages done differently, ie is interest balanced over the course of the loan and not front-loaded like here in the US which allows for faster principal payoff which means homeowners are able to effectively flip houses faster? That's the only thing I can think of.

    I love visiting NZ, it's the best two weeks of my year every year and I think I would love to call this beautiful island home. But the work-life balance is big for me and while the life balance part is definitely greater in NZ than where I currently live, the work part is just as important because if you can't afford your hobbies or passions, then what is the point? Or in my case, if I am constantly saving to go and visit my parents and siblings in the US once or twice a year, why bother?

    I have read Expat Exposed and I really think that site is filled with a bunch of whiners and tossers but some sob-stories do have merit. I also read the Leaving NZ thread here and some of the most active forumites 5 years ago are going home with some not kind words to say about NZ. I also read the news about the massive brain-drain from NZ to Australia. I will say that I don't know the type of immigrant from NZ to OZ though... are these educated workers or are these the poor-folk to begin with and are moving to OZ for the perception of greater opportunity for either work or welfare? I've seen the trailer-parks in Australia that are filled with expat Kiwis that are living off of welfare or just lower paying labor jobs with nicer weather. I would think that the brain-drain would foster opportunities for highly-skilled, highly-trained professional like myself but I don't know.

    I would really like feedback on my concerns as making the move will pretty much financially drain me as I would be making the move with an all-in mentality. I will be visiting again in March or April of 2014 with the idea that I will be posting my CV on all the employment sites and then pounding the pavement so to speak once I get there. I have a NZ number through Vonage which I'm hoping will help. If there are any forumites that can help with work, please message me privately and I will send you my LinkedIn profile. I really want to make the move but I also have my concerns and I'm hoping to lay these concerns to bed but I'm hoping to get real feedback and not what people would like to read.

  2. #2
    Join Date
    Apr 2009
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    Sandwich Islands
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    746

    Default

    I can't speak for the IT field, but the general rule is don't move to New Zealand to advance your career or make money. I suspect you would be better off on both if you stayed home and continued to vacation here. I would approach a move here as a vacation that you get paid for--a chance to work a little less, and to go to the beach at the end of the day.

    Your 32 days PTO (paid time off for everyone else): Does that include sick time? Public holidays? I went from 28 in the US, to 20 here, but the 28 included sick time (I went to work with swine flu once)! There are also something like 11 public holidays, which tends to be a bit better than the US. You could probably negotiate your leave up a little, but it's not something I would count on if you don't even have a job offer.

    There is no magic formula that makes houses more affordable. The amortization rate is typically spread over 30 years, but the interest rates are not fixed. You can get a "fixed" rate, but even that is only fixed for 6 months to 7 years (usually the longer the term the more you are paying for it). Most people have mortgages that adjust every month and throw as much extra money at it as they can so that the pain will go away a little sooner. How do people afford $400k homes on so little money? They have down payments from their old homes and/or they spend less than you do on other things. Bring some money with you!

    Your hobbies and passions will be cheaper. I used to teach sailing at a University so I could afford to do it myself. Here (although boats are more expensive), the storage (and yacht club membership) is almost an after thought. I don't golf, but that looks similar based on what friends say.

    Re visiting the US twice a year: Are you coming alone? Our return trips are more like once every two years, and I end up doing some work in the US just to pay for them. Flying to/from the US is almost always more expensive than flying from/to...it makes no sense, but that's how it is. At least the kiwibuck is high right now, so if you are depending on NZ for all your income going to the US won't be quite as bad.

    So is it worth it? Not if you're talking financially. Does everything else make up for it? It's a yes for me...but a lot of that has to do with how little money I make now. I used to work so much overtime in the US just because, well, 10 hours of time and a half was a fortune. I wouldn't bother any more, even if it was offered to me. I work 40 hours a week, and I really don't think about it outside of those hours. I've been to three small winery events this month (wine tasting, music, food). I used to live in Napa Valley, and that sort of thing would have been impossible. (Not to say wine is cheap here, but picnics are allowed and admission is usually free.)

  3. #3
    Join Date
    May 2012
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    NZ (Auckland; via Canada)
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    With few exceptions (geoscientists?) moving to NZ from a country like the US means accepting that the job market is smaller--narrower, more precisely. But there are good roles with reasonable compensation to be found, particularly in Auckland. I'm an academic and putting aside the exchange rate (we spend and earn in NZ$) my salary is 20% higher than it was in Canada. My husband is in finance and as a contractor is earning a bit more than he did in Sydney or Vancouver. Given the median salary for Auckland is around $30k/year we're doing very well. That's how we'll be paying our (soon to be) $400k+ mortgage for our new home. In terms of annual leave I get less (I had 6 weeks) he gets more (he had 3 weeks) with both of us getting 5 weeks--though almost a week of that 5 are "mandatory" leave days around Xmas and Easter.

    Work life balance here is almost perfect. I have found most people industrious and focused until quitting time, when all our smart phones are turned off. Most people make an effort to get away from their desks for a few minutes a few times each day--much more than I saw in Canada, Australia or the US. But a very good work ethic.

  4. #4
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    Feb 2010
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    IND-AUS-NZ-AUS
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    My 2 cents, You would probably need a salary of NZD 200k+ to have the same life style that you have in US. If you do manage to find a suitable and sustainable job in NZ with above mentioned salary then you would be comfortable with the move financially.
    Otherwise I agree with 72andsunny's comments.

  5. #5
    Join Date
    Jan 2013
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    Vermont, USA --> Wellington
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    Quote Originally Posted by DMS View Post
    Hi forumites

    Second is home prices and how do these lower salaries pay for massively overpriced homes? How does a country with an average salary of $60,000 sustain a housing market where the average price is $400,000? I wouldn't be able to afford a $400,000 home here in Philly on my current salary. Are mortgages done differently, ie is interest balanced over the course of the loan and not front-loaded like here in the US which allows for faster principal payoff which means homeowners are able to effectively flip houses faster? That's the only thing I can think of.

    ^^^ Yes! I'm so glad someone finally raised this point. It's a huge dissonance for me. It would make sense to me if home ownership were on the fringes in NZ, but the truth is, so many people own property down here. Every other person you talk to owns a bach somewhere, or has a house that they rent out. What's stranger is that mortgages are much harder to get here. Anything less than an 20% deposit won't even get you a conversation with a bank. I'm always bewildered by how all of my single co-workers are buying $250-$300k homes making ~$70k a year, and somehow bringing a $60k cash deposit to the table, all while paying more for pretty much everything day-to-day.

    IMO, there's a massive bubble in housing prices all over NZ. Houses sell really fast -- so fast that the listings rarely even give a price. They just collect bids. The Auckland market is in a category of its own. You can't get anything decent for under $1M. It's crazy.


    The other great point you raise is about visiting back home. That's the one thing I really wish I had thought through more before coming here. It's true that most people will benefit from much more annual leave here than in the US, but a trip back home will cost you three weeks of holiday to make it worth while, and if you go in the NZ winter, you're not going to benefit from any public holidays. If you go in the summer, you'll get all the xmas holidays, but pay heaps more for airfare. We're planning a three-week trip back to the US in August. That, plus the holiday time from the Xmas shutdown period will use all of my holiday time. We'll still have a lot of long weekends, but it sure doesn't leave a lot of time for seeing NZ, which is why we came here in the first place.

    That said, we do love it here. Don't come here to advance your career or make money. Come here for the lifestyle and the natural beauty. That's the handsome salary the NZ never fails to pay you.

  6. #6
    Join Date
    Aug 2009
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    Scotland to Wellington
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    About the people with baches, I have found that many of these are owned jointly by several members of the same family, or have been in the family for years.

    Going on holiday outside NZ can be incredibly expensive and it is definitely something to bear in mind, especially of course to Europe and with a family.
    Last edited by girlwithanewf; 2nd January 2014 at 10:39 AM.

  7. #7
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    Oct 2013
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    NZ is about the only developed country without a capital gains tax which is a major reason why housing prices have sky-rocketed. As long as one doesn't trade in houses frequently (where it is considered income), investors can buy and then sell property and pay no tax. Some wealthy overseas investors own dozens of houses and buildings. No overseas investor tax or disincentives exist (as we had in my home state), and few legal barriers exist for overseas investors. Most people I know who can afford more than one house feel that investing in property is safer than the share market and other investment opportunities due to the collapse of the markets in the late 80's (the worst in the developed world) and finance company collapses in the last 10 years. In addition the NZ dollar has been absurdly overvalued in the last 5 years - at over $.80 USD, which makes property seem much more expensive for those from the USA. The dollar has averaged at about $.66 USD since we arrived in 1995, which is about on par with real purchase parity...what things cost, and with real GDP of NZ vs. the USA. So at $.66 a 500k house in Auckland ($330 USD) is more on par with a house in a similar sized healthy USA city in a good neighbourhood.
    Last edited by JBrit; 2nd January 2014 at 12:52 PM.

  8. #8
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    Oct 2013
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    New Zealand
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    As far as "career", it seems to take years (if ever) to be accepted as a Kiwi, in which case one is always a foreigner taking away local jobs. In the arts, which represents local culture, it can be catastrophic. Being so small and isolated only ups this ante. It still is a wonderful place with many advantages.

  9. #9
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    Jun 2008
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    UK to USA to Waikato, NZ
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    We moved from the US and my husband and I were on a really good combined salary of over $US 200K pa. We are now on a combined of about $NZ 186K pa which is extremely unusual for here. We did not bring much over with us(as lost lot of money in US housing crash) and have bought a house here 1 yr ago, now selling it as we have raised the 20% deposit for some land and building a newer house.

    My husband's experience has been that he had to take a step back career wise but 2 1/2 years later is climbing back up the ladder.

    We do not have new cars like we did in the US, and we have a much smaller house. We also budget a lot more.

    However we did not move here for materialistic reasons. We moved for a better work/life balance, the amazing scenery, friendly people, better schooling and a better environment for our kids.

    We have no regrets.

  10. #10
    Join Date
    Aug 2013
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    US
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    108

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    Quote Originally Posted by DMS View Post
    Second is home prices and how do these lower salaries pay for massively overpriced homes? How does a country with an average salary of $60,000 sustain a housing market where the average price is $400,000? I wouldn't be able to afford a $400,000 home here in Philly on my current salary. Are mortgages done differently, ie is interest balanced over the course of the loan and not front-loaded like here in the US which allows for faster principal payoff which means homeowners are able to effectively flip houses faster? That's the only thing I can think of.
    I believe some mortgages are calculated/paid on a week by week basis. Thus, compared to the US, which is generally paid monthly, you'll save quite a bit on interest.
    I'm no expert in this area, however.

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