Interest in the small New Zealand town of Kaitangata suddenly increased dramatically in June 2016.
People were suddenly more interested in Kaitangata than places like Queenstown, Sydney and Auckland. From Wikipedia:
Infact at one point Kaitangata was getting more page views on Wikipedia than New Zealand normally gets. So it's likely that interest in Kaitangata was pushing up interest in New Zealand as a whole.
Here is a picture of a typical Kaitangata scene:
So why all the interest?
There was a press release from Kaitangata Promotions on 20th May, 2016:
Then media coverage started on with a story in the Otago Daily Times on Fri, 10th Jun 2016
And then it spread to other New Zealand media.
A New Zealand based writer for the Guardian wrote a story on it:
And then it went crazy
Various media outlets in the US started reporting that the town was actually paying people $160,000 USD to move there. THIS IS FALSE. People interested in the scheme are not given a house but just have the opportunity to purchase a new house for around half the New Zealand median house price.
A report in The Inquisitr took it to an extreme as it featured a picture of Milford Sound and assurances that although it seemed incredible, the council really was giving away large sums of money to live there.
Clutha District Council denial
Wikipedia Page view stats for Kaitangita were now beating London and New York
On 3rd July New Zealand time, media started correcting the false US media reports of cash or land giveaway
Although false reports continued:
On 4th of July interest in Kaitangata remained strong
There were more people looking for jobs in Kaitangata than in Auckland or Sydney.
Infact at one point there was more people looking for jobs in Kaitangata than in London! This is a shame because although there are millions of people who work in Sydney or in London there are probably only a few dozen people who actually work in Kaitangata itself. Most of those would be at Kai point coal.
Regionally, most interest in Kaitangata jobs seems to be coming from Zimbabwe and in Kaitangata as a whole; Iceland:
And yes Kai has become a media darling
5th July update: Kaitangata's section sales on hold
Yes, 'Kaitangata promotions is calling for a total and complete shutdown of section sales in Kaitangata until our district's representatives can figure out what the hell is going on.' - To paraphase a certain US politician.
It should be pointed out that these are the sections that are part of the scheme, not general sections for sale in the town.
It should also be pointed out that the $230,000 package includes a house and land, but doesn't include a home ready to move into.
The main component of saving in the package is the cheap price of land, as it is a transportable house which can be moved onto site.
6th July update: Interviewing the potential new migrants
Along with the 'usual' list of foreign and domestic media commenting on the original deal, Radio New Zealand took it upon itself to interview a few of the overseas people wanting to come to Kaitangata.
Radio interview: An insight into why foreigners are interested in Kaitangata
There have been quite a few interviews about Kaitangata on Radio New Zealand.
7th of July update
Today is the first day in about a week that there has not been a whole lot of media interest in Kaitangata. Only one lazy article on stuff.co.nz about how much people have been searching for Kaitangata on trademe. (tell me something I don't know!) Technically that article was posted last night, so if it continues like this we could have the first Kai-free news day of the month.
Will there be any other twist and turns to this story?
9th of July update
After a break of one day there are new media articles about Kaitangata including a new TVNZ interview.
No international media though!
10th of July update
No media, but I did notice that 'The Kaitangata effect' has caused the biggest spike in Google searches for "Move to New Zealand" since at least 2004 and beating Australia for the first time ever during that period.
It is clear from the related searches that Kaitangata is responsible for this:
12th of July update
The meaning of 'Kai Madness'
So why has this all happened and what does it mean? There are multiple threads of circumstance and meaning that have converged to create the Kaitangata media phenomenon.
Historically Kaitangata was primarily a coal mining town surrounded by farms.
When Britan joined the common market it sent the New Zealand economy into crisis. The reaction to this was to cut subsidies to farmers so that people in rural areas of New Zealand became poorer.
Automation and changing patterns of energy use reduced the need for there to be so many workers in coal mining in New Zealand. Many coal mines also closed.
Due to this there alot of people moved out and there were empty house lot sections in Kaitangata. The population shrank from about 1200 in the 1950s to around 750 today.
Most of the services in the town like post office and shops closed, not just because of the low population but because it could be served easily from nearby Balclutha.
Property prices collapsed because of the population decline and never rose even when the economy improved in the 2000s. This was for two reasons:
1) Kaitangata had come to be seen as the epitome of a declining rural town due to it's connection to the coal mining industry and then there was a high incidence of Arson in the town. The town was connected in many people's mind with rural crime. Making it seem to be an undesireable place to live.
2) There are high council rates (tax) on vacant properties in Clutha, meaning that since values never rose people had no incentive hold on to the land and no one else had any incentive to buy it.
Property prices in New Zealand as a whole
New Zealand is currently one of the most unaffordable places to buy property in the world. The reasons for this are:
1) The Resource Management act and the building act make it expensive to build property. New Zealand is an Earthquake prone country and new builds need to be of a high standard.
2) There is a relatively high birth rate (among western nations) and high rate of immigration currently, meaning there is alot of demand for properties.
3) There is a massive tax incentive to owning property in New Zealand, as there is no stamp duty or capital gain tax (unless you are a property trader). This means that there is massive tax free income for those who sell property in New Zealand after it has increased in price.
4) Houses are hand built in New Zealand by New Zealanders. Almost every other depreciating asset is made in China - cars for instance. So houses keep on costing more and more to build as the price of skilled labour goes up and they require as much labour as they ever did to build. There has been little impact of automation in house building.
5) The relatively small and uncompetitive market for building materials with high transport costs means that it costs more to build than in Australia.
During the 2000s a number of primary processing plants in the Clutha District expanded - Particularly Finegand meat processing plant near Balclutha
$6 million Finegand upgrade as firm looks at expansion Fri, 5 Sep 2008
In fact you could say that the demand for extra workers in Clutha district is entirely down to Finegand.
Expansion a boost to employment prospects 31/10/2013
The Kaitangata media phenomenon
The house and land scheme was not the Clutha district's first attempt at getting more people to go there. Previously there had been a job fair:
More jobs than seekers at Dunedin Clutha jobs fair, 9:59 pm on 4 November 2015
But "Lack of accommodation continued to be a problem in the area."
Still after job-seekers Fri, 22 Jan 2016
Once the housing issue and the job issue were joined it suddenly created the catalyst for the massive interest.
The reason being that people no longer had a ready made answer for why people shouldn't go there.
There are lots of rural places in the world dying for lack of population - Rural Japan for instance.
And there are lots of places with plenty of jobs but it's too expensive to live there - Queenstown for instance.
The near abandoned sections in Kaitangata with ready made infrastructure provided the perfect place to put houses if they could be put on affordably. Building them onsite in Balclutha and transporting them to Kaitangata allowed them to do that.
Casting a systemic problem as a personal problem
The final thing to say about the story going viral is that in certain right leaning NZ media it allowed them to cast a systemic problem as a personal problem - that being that there are lots of people in Auckland and other places in New Zealand that are having an issue with housing affordability and job security. The Kaitangata offer allowed those people to be told - 'just move to Kaitangata'. Of course Kaitangata has nothing to do with anything so far as the Auckland housing crisis is concerned. If even a few hundred people moved to Kaitangata the offer would no longer be possible. It's only ever been possible because hardly anyone ever wanted to move to Kaitangata and so land prices were so low. If people did want to move there the prices wouldn't be low anymore!
In terms of the first part of the global spread Kaitangata (usually called "the tiny town" in overseas media) was a blank slate which any romantic notion could be projected upon as a refuge to escape uncertainty in the world.
Want to read something else on this site? Try: Wellington New Zealand is warmer than Canberra Australia