Monday, December 29, 2014

Is Raw Milk Safe? Some Pasteurisation Facts. Why I Won't Sell Raw Milk & What To Look For In A Raw Milk Supplier

Tragically a child in Australia has died as a result of drinking contaminated raw milk. 

So the raw milk vs pasteurised milk debate begins again. The comments on this article from June this year show the diverse opinions.

I grew up drinking raw milk from the vat. We looked long and hard at selling raw milk. We looked at the issues and decided that raw milk was not for us. I'll explain why.

Is raw milk safe or not? 

The quick answer is, it can be safe, but it can turn bad very quickly.

First up, what is pasteurisation?

We boil contaminated water to kill bugs. Pasteurisation is simply heating the milk up to kill any bad bugs that may be present. 

It's not just milk that we pasteurise either, most freshly squeezed orange juice is pasteurised, just as egg products are too. We don't seem to have debates about those products.

The pasteurisation process is a combination of temperature and holding time. For example you can heat milk to 60 degrees and hold it there for 30 minutes (called batch or low temp long time) or you could heat it to 72 degrees and hold it there for 15 seconds (called high temp short time HTST).

I've chosen a batch system where we heat the milk to 65.1 degrees and hold it there for 10 minutes.

Does pasteurisation affect the milk?

Yes & no.
Pasteurisation does not change the nutritional value of the milk such as fat, protein content etc. 
But it does affect other aspects of the milk. The heat treatment process kills any "bad bugs" that are in the milk & it also kills any so called "good bugs" that are in the milk too.

To check that milk has been pasteurised. We conduct a test called the Alkaline Phosphatase test. This test is looking for the Alkaline Phosphatase enzyme. If milk is properly pasteurised, then alkaline phosphatase is inactivated. If it is detected then the milk has not been pasteurised.

This indicates that the heat treatment is affecting some aspects of the milk. 

Does it matter? 

There seems to be very little or no scientific evidence showing any benefit to drinking raw milk. But raw milk proponents will give examples of a friend or a family member who had an ailment that disappeared after swapping to raw milk. There's even books about how raw milk can cure autism. It hasn't made one bit of difference with my autistic son!

Either way both opinions will continue to exist.

I couldn't see any real evidence other than some anecdotal evidence that raw milk is better for you and that the pasteurisation process adversely affects the milk.

People are confused about what happens to milk

What I did discover in my customer & market research, was that the public don't understand what pasteurisation, homogenisation and standardisation is.

People try raw milk and they think "wow" that tastes so different to the supermarket milk. They conclude that it must be because it is raw milk. 

The fact is, you can take milk from the same batch, pasteurise half of it & conduct a taste test. The pasteurised milk will have exactly the same amount of cream on top and taste exactly the same as the raw milk. 

People can't tell the difference.

What people can tell the difference of, is if the milk has been homogenised & standardised. It's those two processes that alter the look, texture & taste of the milk.

There is a perception that you can only get full cream milk, straight from the cow, just like the old days. If it is raw milk. People think the pasteurisation process is what removes the cream or "waters it down". 

I couldn't see any rock solid reason to sell raw milk. But I could see potential risks to selling raw milk.

How to ensure raw milk is safe

The food scientists will say that you simply cannot ensure that raw milk is safe. I think thats being a bit over the top. 

After all I spent my whole childhood and teen years drinking milk from the cowshed vat. I also did a fair bit of milking and I remember accidentally dropping the teat cups into a fresh wet cow pat every once and a while and watching as the cups sucked it straight into the milk line. I survived.

Simply put, raw milk can be safe if it is produced to high standards and consumed in short order.

There are a number of people who produce and sell raw milk properly. They are registered with the ministry for primary industries and have testing regimes & procedures in place.

What makes raw milk unsafe? 

The same things that could make pasteurised milk unsafe. The obvious issues are big bad bugs like, Salmonella, E.coli, B. cereus, Listeria & Staph Aureus. Pasteurisation will kill or deplete these bugs if they are present.

If any of these organisms are found in raw or pasteurised milk, you would have to ask serious questions about the practices of the operator.

The other things to consider are Coliform levels (fecal bacteria) , Aerobic plate counts (bacteria) & somatic cell count (measure of mastitis or infection in the udder).

The people who sell raw milk properly have Coliform, APC & SCC levels well below that of the average dairy farmer. 

If raw milk is produced to high hygiene standards & has very low bacteria levels in it & it is kept at below 4 degrees C, then it will likely be safe. 

Problems arise when the temperature is elevated above 4 degrees. Bacteria reproduce when it gets warm. If a bottle is left on the bench at room temperature, the bacteria can rapidly reproduce. Its possible that a bad bug is present, but in such low levels that it is not a problem. But it could reproduce to levels that then become a problem.

This applies to pasteurised milk too, but the difference is pasteurised milk will have lower bacteria levels in it and the bad bugs are heat sensitive and will have been killed. So any bacteria that are multiplying will not be harmful. 

One of the reasons the New Zealand regulations only allow raw milk to be sold from the farm gate, is that transport from the farm and storage at a separate location, increase the risk that the milk is not kept chilled and it also extends the time in which the milk will be consumed.
Long supply chains and raw milk are not an ideal mix.

What to look for in a raw milk supplier

If you want to buy raw milk in New Zealand then there are a number of farmers doing it. You want to buy milk from someone who has impeccable hygiene in the cowshed & healthy cows.

The things to look for are:

  • First of all look for their approval certificate from MPI. If they don't have one it means their systems have not been approved by MPI. They are breaking the law. Don't buy.

  • How tidy and clean are the surroundings? Is there rubbish laying around? Is the cowshed clean, are the railings clean, has the yard been hosed clean, are the teat cups clean?

  • Ask to see the old milk filters. The milk filter catches any foreign matter. If its green, that shows that cow poos on the cows teats have mixed with the milk. In my experience most commercial dairies will have green milk filters at the end of milking.

  • Does the farmer have a large herd that supplies a milk company like Fonterra or is 100% of the milk going to be sold to the public as raw milk? This is important because if a farmer is milking 400 cows and simply diverts some of the milk to sell to the public. It is unlikely that they are following the required hygiene requirements for safe raw milk. They won't be washing & disinfecting the teats of all 400 cows.

  • Ask about their milk testing regime, what are the bacteria levels that they aim for? 

My Conclusion

People love real milk that has not been heavily processed. Milk that has been standardised & homogenised is very different from real milk.

Many people jump on the raw milk bandwagon simply because they like the taste of real milk. Most of these people will be quite happy to drink real milk that has been pasteurised.

I don't think there is any advantage in drinking raw milk over "real milk" that has only been pasteurised.

To me any advantage (if any) of raw milk is outweighed by the risks.

I'm happy for people to drink raw milk if they want to, as people should be free to do as they please. 
For this reason I support the current regulations that allow people to buy it from the farm gate. This allows people who really believe in raw milk to access it. But they have to be really keen to drive to the farm and collect it.

I'm happy for the public health system to treat you if you get sick too. After all the tax payer funds the treatment of people doing silly things on motocross bikes etc.

But I do have a problem with people feeding it to their young children. They are not able to fight off an infection as well as an adult.

Sunday, December 21, 2014

New Zealand's Food Safety Regulations Are Not Just About Food Safety, But Also International Trade & Politics

New Zealand's food safety regulations are not simply about food safety. It's also about international trade & politics.

Once I understood that, the regulations & procedures around dairy products begins to make sense to me.

I'm going to be quite charitable to the regulators in this post.

Biddys Story

Last night Seven Sharp did a follow up story on Biddy and her micro cheese making business. You can view the 7 minute video here.

Biddys story is, she milks 3 cows and makes the milk into cheese. She has won international awards etc etc. 5 years ago she was featured on Country Calendar. This alerted the authorities to her small operation and she was required to meet the dairy regulations.

Biddys story has popped up in the media on and off for the last five years. The current situation is she makes $33,000 per year from her cheese and she is required to have her risk management programme audited every year, which cost $4,500.

my last blog postI outlined the reason it costs $4,500 to get a verifier to audit her every year. Basically there are only 2 companies in New Zealand who conduct these auditing services and there is not enough auditors. So people like Biddy and my self have to pay for the airfares & rental cars to get an auditor to visit. We also have to pay them $90/hour while they are travelling & well over $130/hour while they are on site or writing their report.

So Biddys getting away quite lightly at only $4,500!

Regulations are set to protect our international trade

After hearing a story like Biddys, the general response goes something like this "This is ridiculous, a little old lady with three cows has to go through all the same paperwork and inspections that a big processor does. Why doesn't the local council food inspectors do the inspections?" 

This sounds logical, after all if you wanted to bake apple pies & sell them. You can set up in your garage and the council inspector can sign off your premises. 

But New Zealand doesn't make its money from apple pies, it makes it's money from milk.

Our overseas markets are quite happy to find a reason to stop our dairy exports. One example is Fonterra's DCD scandal. Sri Lanka were quick to blacklist Fonterra products & Chinese officials were all over MPI looking for a detailed risk assessment. 

We can find other food safety scares that have affected New Zealand dairy producers. There was Fonterra's clostridium botulinum scandal and before that they had the melamine infant formulas scandal too.  

All three of these scandals cost NZ producers greatly.

But hang on a minute, these "cock ups" were by Fonterra, New Zealands largest producer not the Biddy's of the world.

I can't actually find an example of a small scale producer causing the NZ dairy industry to suffer.

Either way, officials from the European Union, China & the US etc scrutinise our food safety systems and look for areas of weakness or potential weakness. Often its not food safety at the forefront of their mind, but rather international trade as their focus. 

It would appear that, they use our system as a type of tariff or at least a way to leverage more bargaining power.

So poor old MPI has to juggle the political & trade requirements while also trying to make the system simple for Biddy and I.

As a result, our trading partners demand a robust system with checks and balances. The problem is those checks and balances cost money.

In my last post, I proposed that we should get rid of the private verifiers and make verification the role of MPI. The problem with that scenario is MPI then set the standards, evaluates businesses risk management programmes and also conducts the auditing of those businesses.

It could be argued that this system would lack any independent checks.

Who knows what goes on in the Wellington office of MPI. We don't know what the Chinese or the europeans demand of them.

But what I do know, is that whenever I talk to anybody from Eurofins, AsureQuality or MPI the conversion very quickly turns away from the practical hygiene issues and onto the requirements of the a certain standard or regulation. 

It's these regulations that have been audited by our trading partners & found to be acceptable. 

MPI are worried that if, a small producer stuffs up & causes a food safety breach, the risk is that the standards & regulations that make up our food safety system may look to have failed. Therefore opening us up for more scrutiny from other countries who may be looking for any reason to halt our exports.

Much of the battle I am having with the Ministry for Primary Industries is not about actual food safety, but more about everybody covering their backs. 

More on that later

Monday, November 17, 2014

Is Our Food Safety System as Strong as We Think. Private Sector vs Public Sector

Is our food safety system as robust as we think it is? And are we better served by the public or private sector?

Last week I blogged about my issues getting the mobile cowshed evaluated by inspectors.

The way the food safety system works, is the government agency via The Ministry of Primary Industries (MPI) set the food standards. When a company sets up a food business, the verification services are provided by the private sector.

In New Zealand we have AsureQuality, which is a state owned enterprise, but it operates as a for profit business. There seems to be only two other providers, Eurofins & SGS in NZ who can offer dairy evaluation services.

The problem I have struck is there are not enough staff within these three businesses to evaluate and verify my business.

Lack of food safety specialists

I've spoken to quite a few people in MPI, AsureQuality & Eurofins over the last few months. They all say that the demand for their services have boomed in the last 2 years. 

The Fonterra botulism issue has absorbed a lot of manpower, but there is also a large number of new dairy businesses starting or expanding. 

There are a number of large dairy processors expanding, like Fonterra's Edendale & Darfield plants. But there is also a number of new factories (many backed by Chinese money) popping up across the country.

There is also a boom in the numbers of small producers like myself setting up.

As an aside; I found it interesting that there are only 3 people in New Zealand who can assess dairy heat treatment facilities. The same person who assesses massive milk powder plants is also the guy who assesses my 300 litre/day pasteuriser.

All these things combined have meant that the demand for their services has increased dramatically.

Why not just employ more people?

They are trying to, the problem is these roles are quite specialised, they can't just put an ad in the paper.

I've noticed almost all of the people I have dealt with, from food safety consultants, evaluators and assessors all seem to be over 50 years old. These people have been in the industry for over 30 years. Many are on the verge of retirement.

Where are the young people?

It seems they don't stick around. 

One person commented 
"we used to employ graduates, but they all seemed to leave after 1-1.5 years. The problem is it takes us 2 years to train a graduate to the point where they can operate unsupervised."
I haven't received my bill yet for my pasteuriser inspection, but I believe the hourly rate that I pay for the time the inspector is travelling is $90/hour. While they are inspecting and writing the report, the hourly rate is over $130.

Upon hearing the rates they charge, I thought there must be some serious money to be made in dairy verification.

Yes there is, but at the same time no there isn't.

It appears that for some companies, dairy verification services are just too hard to provide. I've come across at least one company that no longer does dairy evaluation because their evaluator left and its just too hard to replace them.

Private sector vs public sector

This has got me thinking, is New Zealand's food safety system best served by the private sector?

My reason for asking this is. 

A private company needs to make a profit. If a company employs a verifier and spends considerable resources training them, they want to be sure there's enough work for them so the new employee can pay for themselves. 

It appears to me that these companies take a "wait and see" approach before committing to employing more staff. This make perfect sense to any business person.

Meanwhile, the countries food businesses are being held up by a bottleneck in the form of insufficient number of inspectors & other services.

What about the public sector? 

Well, MPI is able to conduct evaluations, but
 "we don't want to be seen to be competing with the private sector". 
Before MPI will step in they need to be sure that none of the private sector providers are able to provide the services.

In my case, MPI have said they will step in & evaluate my RMP because the private sector businesses are unable to do it.

I wonder how larger export businesses are faring? I'm sure I'm not the only one battling these sorts of delays?

Efficiency vs Resilience

This has got me thinking. We always hear about companies and departments focusing on efficiency. But maybe it's in the best interests of the country to have some inefficient departments. 

The more efficient you become the less resilient you are. An efficient department is one where the minimum number of people are meeting the required standards. But as soon as something unexpected happens like botulism. You find yourself stretched and it takes time to catch up.

It appears to me that the combination of Fonterra's botulism scare and the ever increasing demands of our export partners is stretching our food safety system. I have no hard facts to prove this, but my little experience with the food safety system makes me wonder if our system is really as strong as we think it is.

Maybe its best to have MPI overstaffed a bit, with the experienced staff investing in training the next generation of food safety professionals. Even if they can't justify bringing these new staff on at the moment.

The payback may be in 10 years time.

Saturday, November 8, 2014

Mobile Milking System, Bureaucrats & Regulations

When I decided to actually build the mobile cowshed & process my own milk, I knew that the regulatory requirements would be the hardest part.

New Zealand trades on our food safety reputation. We need to protect that reputation. I'm aware that even small scale producers have the potential to put our whole reputation at risk too.

With this in mind, I delved into all the regulations that a mobile cowshed would have to meet. 

The regulations for the farm dairy side of things are in a document named NZCP1.

People wanting to process milk will also need to know all the requirements of DCP1, DCP2, DCP3 & DCP4. 

There is also the "Heat Treatment Code of Practice" & the "Operational Guideline: Dairy Heat Treatment" documents that need to be followed.

After wading through those documents, I had almost lost the will to live. But I somehow managed to get through the "Operational Guideline: Dairy HACCP plans" & "Operational Guideline: Dairy Processing Premises" as well.

An important point is, if someone wanted to use a mobile cowshed to supply a dairy company, they would only need to comply with NZCP1. 

Over the last 2 years I've tried to design a mobile system which I think will meet all these requirements. 

I met with a number of people in AsureQuality & I had an experienced food safety consultant look over my plans. This was to ensure that what I had planned to build will meet the regulations.

But you never really know how it will go until you actually try. So I just had to bite the bullet & do it.

Risk Management Programmes
Anyone wanting to milk cows need to operate under a risk management programme (RMP) that is registered with the Ministry of Primary Industries (MPI). For example, all Fonterra farmers operate under Fonterra's RMP. Fonterra outline these requirements in their suppliers handbook. 

As I am my own dairy company I need to have my own RMP for the farm dairy & an RMP for milk processing.

MPI provide template RMP's on their website. The templates are essentially a "fill in the boxes" document.

I submitted my template RMP's to the Ministry of Primary Industries and waited.

Eventually the Ministry of Primary Industries responded to my risk management programme application with the following:

"Construction of yard and races – photos show gates directly onto the paddock.  The requirement is for a concrete or similar impervious yard, and the mobile milking trailer would need to be sited on a concrete pad."
"Our opinion is that a mobile milking unit such as you propose are likely to not meet the requirements.  Some modifications to your unit may be required such as having it permanently located or alternatively re-locatable to pre-approved sites where suitable facilities such as a concrete pad,........."
 A concrete pad, kind of defeats the purpose of the mobile system.

If we take a look at the requirements of NZCP1.
NZCP1 6.1 Floors, Yard Surfaces and Races  
All the floors of a farm dairy (i.e. in the milking, milk receiving, and milk storage areas, yards and associated storerooms and offices) must be made of concrete or a similar impervious material. These floors and yards must be uniformly graded, be able to be readily cleaned after every milking, and have a fall to allow drainage to approved outlet points.
The intent of "impervious material" floors, "readily cleaned" & "have a fall to allow drainage" is to ensure that effluent and waste water is not flooding all over the place & causing a smelly health & environmental hazard.

I have designed the system to ensure that all effluent, waste water & wash water is contained within the cowshed and drained to a single point where it is spread with a sprinkler. 

But we obviously don't have a concrete holding yard, which the code requires.

Instead of a concrete holding yard I am proposing an alternative method of ensuring waiting cows do not create an environmental & health risk.

Basicly I milk a small herd of cows and we move after every milking. So the cows are not waiting in the same area day after day and making a mess. We also ensure that the cows waiting to be milked do not wait more than 30 minutes. We also ensure the cows wait on new grass, this way they graze happily while they wait.

These measures combined ensure very little effluent is produced & we will meet the intentions of the regulations.

I'm confident that the mobile system will meet the requirements, it just a matter of getting it through the official channels & that is what is taking the time.

MPI have said:
"For alternatives to be considered a RMP would need to be developed specific to the nature of operations and these must be evaluated by an MPI recognised dairy evaluator then submitted to MPI for registration"
It's important to note the difference between an evaluator, verifier & an assessor. I have already had the cowshed approved by an dairy assessor, these are the same people who conduct dairy shed inspections on dairy farms. But I need an evaluator who seems to be the next level up from an assessor.

The problem is getting a "dairy evaluator" to inspect my cowshed & RMP. There simply is not enough people to conduct the work. Everyone in this field is flat out busy. I can't even get these guys to answer emails or return phone calls.
These evaluators are the same people who inspect the major dairy companies & I suppose I'm at the bottom of the pecking order.

Anyway, I had anticipated MPI may respond with the requirement for a specific RMP.

So I had spent the previous 4 months writing a custom RMP (consisting of over 7,000 words) that would cover both the farm dairy & the milk processing operations.

I would have submitted my custom RMP immediately, but I'm waiting for an approved evaluator to inspect the system & a verifier to inspect my pasteuriser.

Meanwhile, I'm milking my cows and spending money and going broke very quickly!

I can't sell my milk until MPI approve my RMP.

I can see a scenario where I submit everything again to MPI and they take their 20 days to respond, where by they ask a few further questions and then promptly close for Christmas!

Tuesday, October 21, 2014

Testing The Mobile Cowshed

It's been a busy month testing out the mobile cowshed. I took this video about a month ago & I have only now found the time to put it up. I've been getting a few requests for a video.

It's just a quick look at how the system works. I'm still in the testing phase & we are ironing out all the little issues. 

At the moment I'm only milking 8 cows & the neighbours are taking the milk to feed to their calves.
I can't start selling our milk until I have been approved by the ministry of primary industries. That journey is turning out to be a bit of a drama, but I'll write about that another day.

The cows were still a little bit jittery when I took the video. The buggers wouldn't walk on, but they have calmed down quite a bit over the last month.

Saturday, September 13, 2014

We're Mobile Milking!

I've been milking for 3 weeks now and it's been a hectic 3 weeks. I've finally got a moment for a quick update.
I'm really happy with how the cowshed is operating. The second hand milking plant runs really well, the cows are walking on to the cowshed happily & I've learned how to manoeuvre the cowshed through gateways and up and down hills, while keeping both gateways & the cowshed in one piece.
Mobile Milking

It's funny how over the last year I have thought about how to design various parts of the cowshed & pondered every little detail. Yet it only took 10 minutes of the first milking for me realise I had made mistakes with the layout of equipment etc.

I'll be honest, the first milking did not go to plan. I have bought 7 Heifer cows. They had just calved and they have never being milked before let alone on a mobile trailer with no yards to contain them.

I wised up for the second milking & came prepared with some gates, that I set up as a makeshift yard. 

I managed to get the cows on to the platform & milk them. Although they didn't always face the right way.

Mobile Milking

The cows are now used to the cowshed and the system. Cows love routine, so I've kept everything the same. 
I turn up at 9am every morning, the cowshed is always in the next days break of grass. I run a portable electric fence around the cows to stop them tearing around the paddock. After milking they always exit the cowshed onto a new break of grass with a bin full of meal.

When I arrive the cows are usually waiting for me at the entrance of the cowshed. I've done away with the gates that I used as temporary yards now & I just use portable electric fences at the entrance.

Mobile Milking Parlour

I'm not able to sell any of milk at the moment as I haven't got my food safety paperwork sorted yet (thats a long & painful story).

I'm just putting the finishing touches on the processing room & the pasteuriser over the next week or so & hopefully we will be selling milk in the not too distant future.

Saturday, July 26, 2014

Grow Movie- A Great Documentary Which Outlines Young Urbanites Turning To Farming

I watched the Grow Movie the other night. 

It's a documentary that tells the story of how young urban people are being attracted to farming.

The movie follows a few young farmers in the US state of Georgia. We learn how they found themselves farming & why they love it.

Most of the people were highly educated with degrees in finance, engineering & soil science etc, but they have chosen the small scale rural lifestyle.

The documentary focuses on, what we in New Zealand we would call "market gardeners". 

GROW! Movie Trailer (2:09) from Anthony-Masterson on Vimeo.

Two things stood out for me:

Most of these people started with no knowledge of growing vegetables or farming. Most had no money or land. But they started working with a farmer and in some cases simply agreed to work in exchange for accommodation and knowledge. One thing led to another and they now run their own farming businesses.

I found it interesting how one person explained that he got into farming because of his ideological beliefs. He said he now had to balance his ideology with the need to run a viable business.

I found that interesting considering, there are many people in New Zealand giving farmers plenty of advice (including me). It's one thing to talk about how you should farm & another thing to actually do it and stay viable.

Saturday, July 12, 2014

Don't Laugh At Wheedle, Good On Them For Having A Crack

The demise of the trading web site Wheedle, is no real surprise. The web sites aim was to take on trade me which is the New Zealand version of ebay.

I'm certainly no business expert, but I've been thinking about it this morning as I did some housework, and there are two aspects of the businesses failure that have crossed my mind.

Firstly, lots of people are bagging Wheedle and its founder Neil Graham. Neil didn't need to start Wheedle, he founded the Mainfreight transport company which is an international success. He's worth an estimated $75 Million, so money is not a motivation. He's also no longer a young man & he has had health problems.

But he did it anyway, he used his own money and he took a risk and he gave it a crack. That deserves respect in my book.

I'm sure that the reason he is successful is because he has backed himself and taken risks in the past.

The second point, is that this is another example of a successful person trying to start a business in an area that they are not experts in. Neil's background is transport & logistics. I think a technology company is very different to a trucking company. The things that make a tech business successful are very different to what makes a trucking company successful.

Some signs of this are that Wheedle seemed to rely on traditional marketing like sponsoring the Crusaders rugby team and TV adverts. When we look at successful tech companies, they don't do traditional advertising. You don't see Twitter, Facebook, Xero or Vend advertising on TV, radio or sponsoring a sports team.

Suzanne Paul is another example of a very successful person who turned to a different area of business. She made her fortune via informercials & sales but then took her money and invested it into a tourism venture which didn't end well & she lost the lot. She is now back doing what she does best, which is informercials.

Richard Branson is a unique example of someone who has been successful in many different categories, such as music, airlines, trains and mobile services to name just a few. It would appear that he is an exception.

The third aspect I find interesting is that most people don't have a problem with the current online auction site. Wheedle were promising lower sales fees. Saving a few dollars on my trade is not enough of a motivation for me to change.
Wheedle wasn't different enough.

So I think it is great to see people backing themselves and taking risks but I think it's really important to stick to your area of expertise & if you are going to take on the big players in the market, you really need to be substantially different & offer something really unique.

Monday, July 7, 2014

You Can Afford A House in NZ, Despite What People Say!

I’ve had a few conversations with people who I’d describe as being middle class New Zealanders. They are earning around $100,000/year, yet they claim they can’t afford to buy a house.

As we talk it over further, it becomes clear that they actually can’t afford a house of the required standard in the desirable area of the major city in which they live.

It’s pretty hard to buy your first house in Queenstown, Christchurch, Auckland or Wellington, especially if you are not prepared to live in the cheaper suburbs.


It occurs to me that people have priorities in their lives and when they say “we can’t afford to buy a house”, they really mean that they are not prepared to make the sacrifices required to get into home ownership.

Some Examples

I have 3 friends who live in & around Rangiora. All of these people have average jobs, they all have young children, all of the wives have chosen not to work & instead stay at home with the children.

They all own their homes.

One friend was in the army for 6 years and left as a private, he now works in forestry driving a digger. He and his wife bought a small slightly rundown house in Rangiora, which they live in. They continued to save his average wage (by NZ standards) until he had a deposit & bought another house around the corner, which he rents. I estimate these two houses are worth $250,000.

He’s now looking for his third house.

Another friend drives a forklift has a special needs child. His wife looks after their child during the day. They bought an average house in Kaiapoi right next to the motorway. It’s a comfortable house but nothing flash.

My third friend is a builder/hammer hand, he has 3 kids which his wife home schools. They managed to buy a house in Rangiora when they were first married. They recently sold it & purchased a larger house on a lifestyle block.

All these couples bought very average properties with flaws. For instance, situated right next to a motorway or slightly rundown or had a very small section. But they did it and they have gained financially as the properties have increased in value.

I just did a property search on trademe. It showed 485 properties in Canterbury under $250,000.

I bought my first house in my early twenties.

I was working as a dairy farm worker in 2001 earning $30,000/year when I saved $5,400 and purchased a property for $54,000 in Invercargill. I rented it out and it was cash-flow positive.

In 2004 my wife and I cobbled together $10,000 & purchased a house for $100,000, which we lived in. It wasn't located in a great area & it had a shared driveway. We spent the next 2 years renovating it ourselves. We sold it five years later & more than doubled our money on that property.
Renovating the laundry

It sounds so easy just writing these examples down now. But the one thing all these people have in common is they sacrificed things in order to be able to buy their properties.

In my early twenties, my friends were buying $12,000 motorcross bikes & spending their weekends racing, others were borrowing money to buy $20,000 cars, while others were travelling the world.

I missed out on all of that. My wife and I lived a very simple lifestyle. Most weekends were spent painting or hanging gib board or simply staying at home as we had no cash.

I do regret not travelling and my wife reminds me constantly about how unacceptable it was to not have a real honeymoon & rather use the money to buy our first house. 

She’s right though; it was unacceptable to not have a honeymoon. I’ll have to make it up to her. I was so focussed on getting ahead.

Money gives you options

When you are young you have no money and I think all money does is give you options. 

When you have no money you have limited options and you have to focus your limited resources.

It’s totally possible for young families to buy a house in New Zealand. The question is are people prepared to make the sacrifices required?

When I look at the people who tell me they can’t buy a house, I notice that they all eat out at restaurants regularly, there’s lots of money being spent of manicures and salons & plenty of nights out on the town & shopping trips to Australia.

The same thing applies to farming. I saw my parents move from Zimbabwe with nothing in there 30s, working as farm workers to buying their first farm 11 years later.

My first employer started dairy farming at 17 and was sharemilking 400 cows at 28 and at 40 years of age owns a large dairy farm, among other things.

These are all examples of ordinary people with ordinary intellect just getting on with it and getting ahead.

It’s all about priorities, attitude & peoples willingness to do what is required.

I'm developing a pot belly. But its not a priority for me to get rid of it and I'm certainly not prepared to make the sacrifices required to get rid of it. So, I can't complain about not having a flat stomach, if I'm not prepared to do what is required to get flat abs.