June 29, 2024 • 41 mins
House valuations in Wellington are going crazy at the moment. So how accurate are RV's - and are they still relevant? Property commentator Ashley Church joins the Weekend Collective to discuss.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk
sed BET. Such a good time.
Speaker 2 (00:31):
And welcome to Welcome back to the Weekend Collective. Got
a great song to get back into it. Thanks Joe.
That's my producer, Joe Coglin. This is the one riff
radio show. Funny enough, I can't listen to Queen without
remembering the fantastic evening of talkback I did filly in
for Marcus when in one of the links, we're talking
about Queen having sold their catalog for two billion dollars,
and Tony Doe said, yeah, they're more of a novelty band.
(00:52):
The best best evening of talkback ever. Actually quite a
few people agree with them. But still a great band.
But yeah, anyway, somebody who might have a hot take
on there, or they won't necessarily be seeking it. As
a guy with I mentioned that Frank Richie, my panelists before,
who was coming us down the line, on coming to
us down the line on Zoom had one of the
best backgrounds for a zoom call, And funnily enough, we
(01:14):
have the guy who has the best background for a
Zoom call. It is a magnificently stocked bookcase behind him.
He's coming to us from the East Coast and his
name is drum roll please Ashley church kid a Ashley.
Speaker 3 (01:27):
Yeah, I speaking of Hawk's Bay. I can see a
picture in your background. Is that the OLDT ANDG building
in nap Pure I can see there.
Speaker 2 (01:33):
I think it is so. Yes. For those who don't
underware of the studio, we have in the studio one, two, three, four, five,
six large widescreen TVs which go in a sort of
horseshoe shape and they have a sort of montage of
New Zealand iconic, which is because if you were to
take it literally, it would look like that building is
(01:55):
right next to the skytar which is just next door
to the Beehive, which is just next door to the
cable car and Wellington, next door to Mount Taranaki, next
door to some lighthouse I don't quite recognize, and a
clocktail on the Bay of Islands. They're all next time.
Speaker 3 (02:09):
And on the other topic, have you, amongst your many
homages to great music, have you done one on Queen.
Speaker 2 (02:17):
No, that's more Roman travers Bag, probably for in my day,
but I know I've funny thing is with Queen are
some of their anthems? I've been a big fan of Queen,
but I don't listen to them very much lately. So
I realized I'm gonna have to get into a bit
of Bohemian rhapsody of it.
Speaker 3 (02:36):
You're a where Freddy's dead?
Speaker 2 (02:37):
Yes, yes, yes, yes, I mean actually I am. My
musical tastes are kind of retro. What somebody needs to
do is they become a huge star, everyone raised about
them for ten years, and then ten years later I go, hey,
have you heard such and such? I'm late to the party.
It's just my just my vibe, you know. Anyway, good
(02:57):
to see Ashley. Hey, look, I wanted to kick off
with just a brief conversation around the because wouldn't we
give the property of the week. We will often give
an RV, but we'll also give the real estate's estimated
value for something. And there have been quite a few stories,
especially in Wellington lately, of RVs and properties that are
selling well under the RVs. In fact, I think there's
(03:19):
some quite tragic stories about what people might have been
expecting to get paid. So it's a question for you,
but I'm also going to throw it out to the listeners,
is how much do your hopes get elevated by looking
at the RV for something and going, oh goodie, this
could be in our ballpark. And do you pay attention
to the RV because Ashley, do you pay attention or
(03:40):
have you in the past with your when you're a
busy property investor. Where do the RVs sit?
Speaker 3 (03:46):
They're almost meaningless And this is one of those perennial
issues that comes up every time and one of the
major councils puts out a new series of RVs, so
important to understand what they were. There what used to
be called a GV your government valuation. They're now called RVs,
which means rating valuation, and they are conducted by councils
or by organizations on behalf of was once every three years,
(04:06):
and their sole purpose is to determine an equitable basis
upon which to set rates for the following three years,
so they don't have to be accurate. Value is to
be fair. Would probably argue that they have some degree
of accuracy. I'm pretty cimical about that. My argument is
that they're miles out and even if they were correct
on the day that they came out, they are increasingly
(04:27):
less correct as each day passes over. That three year
period of increasing incorrect. Sorry, So when you see these
headlines saying that you know, it sold twenty percent less
than RV or twenty percent over RV, it's essentially meaningless, Tom.
It doesn't mean anything, and RV has got no relation
in my view, to the market value of the property.
Speaker 2 (04:45):
So I guess the reason that we read so much
about them is because they are an easily accessible piece
of data or non data. So that's why they form
the basis of headlines totally.
Speaker 3 (04:56):
The media love them because there's something that they can
hang on to, you know, particularly when markets are hot
and you know you've had an RV of a million
dollars and a properly sales for one point four It
makes a great headline meetingless here line, but it sounds
really good. It sounds and it makes you know in
those in those hot markets, it makes it sound like
properly prices have really taken off. But they don't mean
much at all. They're really important to councils because without
(05:18):
me wouldn't be able to set rates.
Speaker 2 (05:19):
I think it might have been you once who might
have even told me off. Possibly, but because when our
RV came out or whatever, it was. I thought, oh
my goodness, my rates are going to go up because
they've really estimated my properties being worth more. So I
wrote to the councilor and haggled it down by saying, look,
we've we've gotten it. We've got an extra couple of
(05:41):
bedrooms there, but X, Y and Z, this is the
work that needs to be done on the property. And
I think it might have been you as said look
for the saving of one or two hundred bucks on
your rates, that was a dumb move.
Speaker 3 (05:54):
Well, well you probably was. And having an increase in
your rates doesn't actually mean your rates go up. I
won't bore your listeners with the reason.
Speaker 2 (06:01):
No, I meant it had gone up in relation to
other properties. I can hear it with my neighbors. Okay, yeah, okay, yes,
because that is a miss. Actually clear that up for
us at so people my rates.
Speaker 3 (06:13):
People think myv's gone up on my RV's gone up,
So my rates are going to increase. So let me say,
I don't explain this really simply, the council council have
to raise let's I mean one hundred million dollars for
argument's sake, that's million dollars let's say property values go
up on average by ten percent from one RB period
to the next. If your property has gone up by
(06:33):
ten percent, then your your rates aren't delibby any higher
than they would previously other than any increase of the
council and might have put through on their overall costs.
And perversely, if your your house has gone up by
five percent and the rest of the city's gone up
by ten percent, you would even though your house value
had increased, on that CV or that AV, you'd actually
get a relaction on rate.
Speaker 2 (06:51):
That's right, except the only the only reason people go,
how come I'm getting in and increase my rates is
because actually rates are going up all over the country.
Speaker 3 (07:00):
But yes, nothing to do with the value of the property,
is to do with council with spending more money than
they should.
Speaker 2 (07:04):
Basically, I wonder how many people actually make that mistake,
because I for a while I labored under that sort
of impression, but then realized, hang on a minute, that's ridiculous.
In fact, the thing that worked it out I worked
it up for myself only because I thought, well, hang on,
if property prices have doubled in the last few years
or whatever, well their rates haven't gone up that much.
So obviously I've got this wrong. But I can't believe
(07:25):
under that misapprehension.
Speaker 3 (07:27):
Not the way councilors don't treat rbs as a bonanza
for more money. They set their rats completely independently. The
only thing that the RV does is it determines how
much you should pay relative to your neighbor and relative
to the suburb two suburbs across.
Speaker 2 (07:40):
Yeah, actually we ken of I mean, if you're listening,
do you ever pay attention to the r V or
is it as you say, as Ashley says, it's largely irrelevant.
I think the problem is sometimes, actually is that sometimes properties,
when they sell around the RVLL you'd like to think
the RV had sometimes get it right, wouldn't you.
Speaker 3 (08:01):
Well, well, what makes it worse is because when when
an RV is done, I mean, how do does somebody
come through your home? Course they don't. So it's done
by what's called a desktop calculation, which means that somebody
is assessing it without actually looking at your property. So
so but straight away you've actually broken one of the
rules of doing a proper evaluation. So so, by dint
of that alone, they don't know if you've put a
poll on. They don't know if you've decorated your home.
(08:22):
All the other things that might have increased or decreased
its value aren't taken into account. So you know, it's
a as a rating valuation tool, it's pretty good as
a tool to determine what your property's worth. It's relatively meaningless.
Speaker 2 (08:34):
How do you Okay? Well, so if the r vs
relatively meaningless, what is what is the best sort of
starting point to working out what a property is worth?
Because I mean it's I mean, that's is that a
loaded question? I don't know what you said.
Speaker 3 (08:53):
I said, sell it if you want to know what
it's worth solid?
Speaker 2 (08:57):
Well, I mean, would to be fair?
Speaker 3 (08:59):
Is the best barometer? Sure of that? I mean, the
best thing you can do is talk to a real
estate agent and get some indication of what other similar
properties in the area might be selling for. And that's
a reasonable barometer. It's still not perfect, but it's going
to give you some guide as to what you probably
might be with.
Speaker 4 (09:15):
Ah.
Speaker 2 (09:15):
Yeah, Actually, I guess the question is which real estate
agent should you talk to? As well? Because it's just
something I always feel I need to remind myself and
other people listening. Is that if you're talking to the
agent who is selling the property, they are working for
the seller and they are going to give you the
sellers perspective on what it is worth.
Speaker 3 (09:33):
Coreck. So sorry when I said that, what.
Speaker 2 (09:35):
I mean by it's qualifying that for you know.
Speaker 3 (09:38):
Yeah, no, So when I said that, I mean if
you're interested in what your property is worth, and your
property is not on the market, any agent, because most
of them have got access to the same data. It's
the same data set, any agent will be able to
give you some idea. In fact, they'll be keen as
mustard because I think they might be listening in it.
So so you know, you can contact most firms, they'll
come and they'll give you an indication of what comparable
(10:00):
properties in the area have sold for, and then they'll
try and twist your arm to actually sell your problem.
Speaker 2 (10:05):
There you've introduced a factor into the equation there which
which undermines the reliability of that and is if they
want your listing, then there is there might be a
slight tendency on the behalf of that realist state agent
to give you an optimistic sort of presentation.
Speaker 3 (10:19):
Like absolutely so there's two types of agents. There's good
agents who will be honest with you and uten well, no,
that's true.
Speaker 2 (10:25):
Though, I just love the clarity and what you're.
Speaker 3 (10:28):
Who say, look, you know, this is what the property
is worth based on these And then you'll get another
agent who's who's desperate to get the listing, who will
tell you pretty much whatever you want to hear, and sadly,
you know, I'm in the real estate institute will tell
you that doesn't happen, but of course it does, and sadly,
and then what happens, of course, is they get the
listing and then they start emotionally and psychologically beating you
down on price over the next few weeks until they
(10:49):
get you down to the level that the property is
actually worth.
Speaker 2 (10:52):
So okay for buyers then, So obviously, if you want
to value on your house, you talk to a good
real estate agent. They give you a guide and they
probably give you some examples of sales in the area
and on which you can compare the data and see
that they're being reliable. But if you are a seller, sorry,
a buyer, god getting buyer seller. If you're a buyer,
what is the best way for you to find out
(11:14):
and of course in a really hot because you know,
we haven't had this conversation very much on the Property
show because in some of the days gone by, Ashley,
we've been having this conversation in the context of a
really hot market when you don't even have time to
work it out. You get along to the auction and
find that, well it's gone crazy. But now we are
in people have got a bit more time to try
(11:34):
and get there do their homework. So yeah, where would
you start finding out about?
Speaker 3 (11:39):
That much harder for a buyer because the parties are
all sort of conspiring against you as a buyer in
that if you talk to a real estate agent, they're
not going to change you because they're going to put
it back on you and say what do you think
it's worth? And it's harder for you to get access
to that data. So you know, at the end of
the day, you know you would be looking at what
where prices are listed in real estate ads getting an
(12:04):
indication from that. Ultimately it comes down to what you're
prepared to pay. It's interesting you make the point that
you did before because during a hot market, because when
you talk about what's a properly worth the most conservative
party in that whole equation is usually the bank, because
the bank obviously doesn't want to lend you any more
than the security value, so they're very careful to make
sure they get the correct value. But the banks during
a rising market will actually keep amending the valuation on
(12:28):
property as the market continues to rise because they recognize
it's a rising market and that security is greater. So
if they're prepared to do it, that's usually a pretty
good sign that the market's safe. In a market like
the one that we're in at the moment, you know,
generally it comes down to what's that property worth to
you and what are you prepared to pay for it
and how long you're going to hold on to it for?
Speaker 2 (12:46):
What about the role of value. As somebody is texting
me saying just talk to a value, they will tell
you I mean you pay a value for their time
of course.
Speaker 3 (12:52):
Yeah. Well, so the two things. Firstly, and I used
to run the Property Institute of New Zealand which represented
all value is so I have some interest and understanding
of this topic. So two things. Firstly, if you're getting
a evaluation done for a bank, the bank will require
you to use now something called a blind panel. And
the way that works is so in the old days,
you could go along to your friendly valuer who may
(13:13):
or may not have been inspy. You dix versions on valuers,
but you know you might have got a more favorable
one from one than another, and you can take that
along to the bank and use that as the basis
of your loan. Can't do that now. Basically what happens
is the bank will give you an option of two
or three. You won't know who they are. All you'll
know is what each one's going to charge you. So
the bank will tell you what the charge for using
that particular valuer is. You'll select one and they'll do
(13:34):
the valuation and the other. So there's no ability to
have any impact on that. It's completely blind process. And
the other aspect of that is there if you've got
two different or three different valuations done, you would probably
get two or three different values on the property because
you've got as you have with all things offensive. Yeah,
well it can be I don't know what it is now.
It used to be sort of twelve or thirteen hundred dollars.
(13:55):
It's probably a bit more than that now ouch. But
if you did that and that was for one. If
you went and got two or three done, now you
would And I'm not suggesting you should do that. The
point I'm making is it depending on who you get,
you can get a different valuation. So because some valuers
are more conservative than others.
Speaker 2 (14:12):
I guess if you are buying it to invest as
an investor, to rent it, there would at least be
the existing rent on the property possibly as to which
would help you ascertain.
Speaker 3 (14:23):
Because it's a guide, it's not as accurate. It's not
like commercial property, and in fact, even commercial property is
no longer like commercial property. There used to be a
rule of Thumber ten percent of commercial property, which basically
said that the building was worth ten times the annual income,
and that dropped us sort of four or five a
few years ago, and I think now it's I don't
think even that's particularly hard and fast. With residential there's
(14:44):
that that that's very variable. It's a guide, but at
the end of the day, most property investors, let's be honest,
a buying for the capital going over the long term.
So provided the property can pay for itself, all come
close to paying for itself, they'll live with that.
Speaker 2 (14:58):
Okay, we want to take your calls. How do you
if you are buyer. I guess, as Ashley said, you
speak to a good real estate agent as a you'll
get a good picture on it. But if you're buying,
how do you work out what a property is worth?
And of course you know what is a property worth
to you if you've looked at ten houses and you've
been like, oh, I can't find anything, and there's this
one where you think, well, I'll actually, to be honest,
(15:19):
maybe we should just pay an extra twenty grand above
our budget. Maybe then it is worth more to you.
But how do you work out what you're going to pay?
And actually the reason we've started this conversation with Ashley
Churchman guest today is based on just the story about
RVs and Wellington and apparently the Wellington RVs are ridiculous.
There's a property that's sold at tender recently for half
(15:41):
a million dollars less than the RV and the which
was two point one eight and it sold for one
point six, playing into the playing towards the argument that
Ashley not an argument. Actually, I think it's just probably
a fact. Really you can't really rely on RVs. But
how do you set the value of the property that
you are interested when you are a buyer. Give us
(16:01):
a call on that eight hundred and eighty ten eighty.
You can text on nine nine two lines are open.
Let's get cracking. Cancelay Welcome back to FREDI show, won't
(16:22):
your calls? One hundred and eighty eighty text nineteen nine two?
How do you set the value for a property when
you're a buyer? Often people look at the r V,
but apparently it's pretty irrelevant, especially you've seen that story
in Actually church is my guest by the way, Actually
you've seen that church the church gosh, sorry, you've seen
(16:43):
that article. I don't know where that came from. I
came from the Obviously you've seen the article about the
Wellington properties that are selling massively under the r VS,
which is also telling a story about it does tell
a story, really, doesn't it about Wellington's private marketers? Really
in having a case of the dlums, isn't it?
Speaker 3 (17:00):
Well? And also that RB and I don't know exactly,
I've got a property in Wellington and I think they
were set three years ago, which means that it would
have been before it would have been during twenty twenty
one which means it would have been right at the
height of the yes, so it was elevated, and of
course properly values to come back somewhat since then, so
you know, rather than an indicating some major drop, it's
(17:20):
just a reflection of the fact that those were probably
over inflated at the time.
Speaker 2 (17:24):
How much trouble as the Wellington real estate market and then,
I mean, if you've got it's interesting.
Speaker 3 (17:29):
You know, you asked me that question about two months ago,
and I was probably more negative. I've actually seen some
figures since, and I haven't got them in front of me,
but they indicate that despite all of the changes, were
the redundancies of the government's making in the public service.
In fact, the numbers are actually only slightly back on
where they were under Labor. So I think a lot
of that type pably and.
Speaker 2 (17:49):
Tied with the headlines of the number of public service
changes and reductions. Do you think it's be you think,
does it get it? I guess I've always felt that
most real estate or stories set somewhere in a narrower
band than as reported with the boom and bust that
we'd get in the.
Speaker 3 (18:06):
Media, totally, totally and in most cases and I think
Wellington's a really good example of this. I think there's
a lot of headlines, there's a lot of negativity. It'll
actually when the dust settlers will find that it's actually
not nearly as bad as we thought it was in
the market will justu on and at some point, whether
it's late this year or next year, market's going to
recover again all around the country.
Speaker 2 (18:26):
Well, that's a big question, isn't When When did you
say I'm going to hold you to this, Ashley says,
when is the market going to recover?
Speaker 3 (18:32):
When?
Speaker 2 (18:32):
When does it? Ashley?
Speaker 3 (18:33):
Sorry, give us so, let me just repeat what I've
said a couple of times. It's stopped dropping quite some
time ago. Actually, so we're in this weird sort of
period at the moment where prices are more or less
stable and flat. It will start going up again either
when there's absolute certainty that it's not that that mortgage
interest rates aren't going to increase and that really can
only come from the Reserve Bank, or more importantly, when
(18:55):
the Reserve Bank indicates it's going to start slowly dropping
that ocr that'll either be late this year, this year
or early next year. I think that's reasonable certain it's
just a question of watching those it is. Once that happens,
you'll start to what the Reserve Bank doesn't want to
do is cause a stampede. You have people suddenly going
out borrowing money again, so it has to be a little.
Speaker 2 (19:14):
Bit Well, there was something I was having a chat
with one of our corresponders from I think it was
the economists from Westpac pointing out that core inflation in
Australia and other OECD a few other OECD countries was
trending up again. It was a bit of a worrisome
trend that Australia, which does it did make me because
I'm not an economist, but it did make me think
(19:36):
that maybe Adrian always reading that news and gone told, yeah,
let's not get ahead of ourselves. But that's not great news,
is it. No?
Speaker 3 (19:43):
And it's interesting though. I've been reading some stuff over
the last couple of weeks Telly Alexander's done some really
good stuff and what he's saying at the moment is
the major sticking point is the fact that it's not
good enough just to give inflation down and the way
that we have at the moment, we have to have
some of the larger businesses in the country actually starting
to reduce what to reduce what it costs them to
(20:04):
run their busininess rather than passing that post on. So
for example, and accounts was a really good example of this.
So rather than saying, Okay, costs have gone up, we're
going to pass it on to our customers, actually starting
to live within their means. Once you do that, and
once institutionally that starts happening throughout the country, that really
starts to have an impact on flesh nationwide. And we're
kind of in that phase nap. So I think Tony
(20:26):
made a really good point at the end of his article.
He said, to the extent that this continues, it's the
fault of businesses that are refusing to do that and
who are just passing that on to their customers because
that continues to fuel inflation.
Speaker 2 (20:35):
Ah right, Okay, I've got a few texts here to
get into. One of them might require as you slightly
repeat yourself, but it's more specific in focus. Says I
bought a property in Wellington at the peak in twenty
twenty one for one point four million. It's now valued
at nine hundred thousand. It looks like I'll have to
sit on it for longer than I anticipated. When do
you think property prices will return to how they were
(20:57):
at twenty twenty one in Wellington? Or is that a fantasy?
What's not a fantasy?
Speaker 3 (21:02):
Ultimately it depends on wait and the key word is
quite right, it is. It's just time. It's a question
of time. So when it starts to raise again, I'm
going to put a cave in on this. When it
starts to rise again, I think it will start to
raise quite quickly, with the caveat being that the Reserve
Bank's not going to let that get too far out
of control because it doesn't want to see inflation take
off again. So and the reason I say it's going
(21:24):
to rise quickly is because there is a sort of
a and this is a more of a feel thing
than affect thing, but the experience. There is a sort
of an in built desire in the market at the
moment for the property market to take off again. Everybody
wants it to. They just can't.
Speaker 2 (21:38):
Everyone who wants to sell wants it to.
Speaker 3 (21:40):
Well, no, I think everybody does that because even people
that buy, they buy on the expectation that their property
values will continue to increase. People don't pay.
Speaker 2 (21:47):
Everyone who owns wants it to.
Speaker 3 (21:49):
Yes, we'll even that. That's a whole nother conversation. But
I can even argue against that. But that's another that's
a conversation for another day. So there's kind of the
psychological desire at the moment for the market to recover,
and we're all sitting there waiting. It's like we're all
waiting for this start is going to go. And when
that happens, I think you'll find there'll be an orderly
(22:09):
rush if I can put it that way, constrained by
the Reserve Bank not wanting interest rates to get to
a point where people sat down crazy again.
Speaker 2 (22:16):
Okay, just on the value of things. Continuing in that theme,
so this text says, what is the Ashley's opinion of
various websites you know where you can buy and sell property.
For instance, an example on the one roof website where
we get a one roof property of the week, there
is the one roof estimacy estimate which is mediate. Sorry
(22:36):
I was reading too many words. Once one roof estimate
with medium accuracy, it says, and then it's got its
low so low of one point six r V is
one point nine to two. The one roof estimate is
two million and the high estimate is two point three six.
What do we know about those as guidelines?
Speaker 3 (22:55):
Well, one roof one I used to write for one
roof and I don't know whether they still use the
same value, but they used to use a crowd called velocity.
Speaker 2 (23:02):
Well, okay, that's pretty good.
Speaker 3 (23:04):
Yeah, and respected, And so that's what they do. They
deal in property data, but they're all limited by the
fact that they can only make an assumption about what
might happen in particular area. So what they what they
generally do is they'll take the base data that they've
got and they'll add to it based or decrease it
based on what else is going on in the market.
So it's a it's a ballpark figure, and there's a
(23:25):
number of these. There's Velocity, there's a crowd called core Logic.
Those are the two big ones, and then there's a
few others around. Is the real estate Institute's got their
own data set. Most real estate firms have got their
own data stats that have been around for a period
of time, so they've all got their way of setting it.
But at the end of the that it's a uestimate
as to what it's going to.
Speaker 2 (23:43):
Be worth actually have We regularly have the chief economists
from Velocity come on our show, and I've actually, as
a rule of thumb, if you are as someone who's
interested in getting the market, I would have thought that
if there's data that you can pay for. I mean,
you can get plenty of data from Velocity and their
property reports if you subscribe, But if you want to
get that extra data, that would probably be a smart
first investment, wouldn't it to start getting a feed it's
(24:03):
going to.
Speaker 3 (24:03):
Be probably going to be cheaper doing it through them,
that it will be through through a valuer. Keeping in
mind that it's going to be a desktop valuation, which
means that the lolossit is not going to come through
your house. They're going to base their evaluation based on
data they've got available to them. Which comes back to
the question you asked me at the beginning, what's the
best way to get a valuation?
Speaker 2 (24:20):
I guess if I was looking at buying a house,
and let's pretend I don't own my own house yet,
if I was doing something like that, I'd look at
values in the area. I'd be thinking, Wow, okay, this
is a suburb, we can afford of these sorts of properties,
And then i'd look at what I could borrow, and
then i'd go and look at the house, and I'd
be a long way down the track to working out
whether I wanted to put a bit in or not.
Speaker 3 (24:42):
Yeah, incidentally, that's reasonable, Yeah it does. And one other
way determining what a property's worth is go along to
a few options and just watch them because really good
and freak you out. Well, don't put your hand up,
don't work.
Speaker 2 (24:59):
I was going to say something something, Oh that was
me sorry actually, because I do remember my first fora
when I didn't get into the market, was in Melbourne
and I looked at a place in a place called
middle Park, which I thought looked quite good and it
had a bit of work it needed to be done.
And I said to the real estate agent, I've been
around and looked at a few And I said to
the real estate agent, what are you what sort of
(25:20):
price estimate? And he said, and I'd been wasted time.
You know, when you'd go to an auction, we'd just
go for way more than that. And he told me
what it was. It might have been two fifty thousand
back in the day, and I said, now, come on,
I've been to plenty of auctions and it's wasting my
time and I'm not going to look at any more
of your properties if you don't tell me the truth.
Thing he gets, Okay, you're wasting your time. I said,
(25:40):
thank you, thank you. Anyway, let's take some calls one
hundred and ten eighty. How do you set the value
for a property, especially if you're a buyer and you
don't have the input from the real estate agent who's
given you his or her best guess on it. And
Ashley Church he had to take any questions you might
have about the market.
Speaker 5 (25:57):
Tony, Hello, I just don't see Christion. Sorry, Tim, I.
Speaker 2 (26:07):
Just did I have it all the time.
Speaker 5 (26:11):
That's no good, especially if somebody who's famous in you
that's such a good singer. But what I was going
to say, when I'm looking at property and I and
I sort of bought a few places many years ago,
I'm obviously different pricing structure, but I always would have
to be happy to pay a bit more if I
really like where a place is. In other words, if
(26:32):
I like the area, I think you can always pay
a little bit more. I subscribe to the old idea
of the worst house is in the best directors. A
lot of places, especially units, you can improve them, but
you can't improve where the place is. So that's always
(26:53):
been my philosophy.
Speaker 2 (26:55):
Location location argument, isn't it, Tony?
Speaker 5 (26:59):
But all it basically is yeah, And I think you
know because I've never bought a place that I didn't
like where it was, and I wasn't prepared to live
in it, even as a rental. Now I've got friends
that have bought places in the worst possible areas and
they've made extraordinary capital gains because they've got that idea
out of their head. But for me, I don't expect
(27:21):
somebody to live in a place that I would have lived.
Do you get what I'm saying?
Speaker 3 (27:25):
Yeah?
Speaker 2 (27:26):
I know that that's actually a tough one for some
investors because they want to find something they'd live in
as an investor, when somebody might actually have not the
quite the same standards. What was your approach, Ashley, Well.
Speaker 3 (27:36):
I think that the thing that Tony has latched on too,
because the location, location, location is a mantra when it
comes to property. It's not necessarily true, but the point
is it worked for Tony, and so I think what
is true is that people who invest in property and
no property well will have a criteria that they apply
and that they use when they're determining what they're going
to buy and how much they're going to pay for it.
(27:57):
But the thing I think she thought was really interesting
from Tony's early point was him talking about being prepared
to pay a bit more. Ironically, he's actually latched on
to that is the key to what causes house price inflation.
People will pay. House price inflation is caused by people
who are prepared to pay more than somebody else is
prepared to pay for it. They might actually sound really obvious,
but it's an important point. But they'll do that for
all sorts of reasons. Some people will do it because
(28:18):
they can see the potential value of it in the future.
Some will do it because they think they can make
some improvement to it to make it worth more. Some
will do it because they love the home and they're
prepared to pay more for it, even though it's not
a wise economic decision to do so. There are all
sorts of people reasons that people will pay more. But
when they pay more, that's what drives house price inflation.
And the other reason of course that people will do
it and good in their droves in twenty twenty one
(28:39):
is that they can borrow money cheaper, so they can
borrow more, so they're prepared to actually put there more
on the table because they can afford to service and
moret digital lower interest rate.
Speaker 2 (28:48):
Anything on that tiny.
Speaker 5 (28:50):
Well, I think the main thing that the purchases have
always got to remember, and a lot of the teams
to forgive the agent is working for the seller. Yeah,
trying to achieve the biggest price for the property. Now,
a lot of buyers they seem to move side of
that to a certain degree. And another way, I mean
before I bought a units and a dream like years ago,
(29:11):
I would have worked at about forty different places. And
when you see something that you know is dead right
and it's a reasonable price compared to what you've seen,
that's what you can make your decision on. You know
what I'm saying, Yeah, I do tourning.
Speaker 3 (29:24):
I differ with you in one respect though, and I
understand what you mean when you say they're working for
the seller, and in a general sense that's true because
at the end of the day, they're trying to move
on the property for their client. But one of the
things that are real estate state agent will do is
they will match up a buyer and a seller, and
so their role is to act as a kind of
account to bring some sort of reality into that equation.
So it's not quite as simple as just saying for the.
Speaker 2 (29:46):
Seller, yeah, hey, good, such thanks appreciate it. Somebody's texted me,
by the way, in that middle Park and it Ashley
just saying middle Park, Melbourne for two fifty k. Well,
now the medium price in middle Park would be about
two and a half million.
Speaker 3 (30:00):
I've had this conversation before, Tim.
Speaker 2 (30:06):
I mean I wasn't really in a position to pay
much back in the day then as a transient actor.
But yeah, I do remember that, mind you. I think
the house had a few piling issues. I probably would
have ended to spend a fortune on it, let's be honest. Anyway,
we've settled in cin Helias quite happily. A few more
texts as well, just a quick basic one on rates
from Shane. Hi, guys, can you please explain why the
(30:28):
house is included in the rates bill?
Speaker 3 (30:31):
So there's two different types of rates is land rates
land valuation sorry, and a capital valuation, So land valuation.
I don't think there's many councils left in the country
that do this. Land valuation is where the value is
based entirely on the value of the land, and there's
some reasons why council would do that. And most councils
now do a capital valuation, which is the land and
(30:52):
the dwelling and the structure, and which is obviously in
most cases will be a lot higher. There's no I mean,
there's reasons council you use one or the other ones.
I say, very few left do just land. Most of
them do capital evaluations.
Speaker 2 (31:06):
Now, all right, got lots of text with some interesting questions,
and here's one. In fact, no not, here's not one.
Because I'm going to take the break. It's twenty to four.
We'll be back with Ashley Church Property Property. Let's call
them a guru today. I think we might call them
the guru on eight hundred eighty ten eighty taking your
cause text nine two nine two back in a ticky yes,
(31:45):
welcome back. I'm sure that my producer Joseph Colgan is
playing these numbers from Queen just for the benefit of
my colleague Tony dough After our fantastic and I have
talked back about Queen anyway, This is the one Rifradia show.
My guest is Astley Church talking about property values, starting
off with look Wellington properties are a lot of them
selling well under their r vs. Seems that maybe Ashley's
hid on the XP for that that a lot of
(32:05):
those values were set in the middle of the boom
when their property prices went through the roof. But anyway,
how do you set the property value for you when
or when you're looking to buy? How do you find
out what something's really worth? Eight hundred and eighty ten
eighty or text nine two nine two. We've got a
lot of questions about some interesting angles on value Ashlely.
This one here tied and with insurance on our thoughts
(32:26):
on RV and house insurance, especially where the house may
be insured on the market value rather than replacement value.
It's okay because getting the value for your insurance is
a very important business, isn't it.
Speaker 3 (32:39):
Yeah, I would have thought the insurance company is certainly
the bigger ones would have their own source of data
for that, which is all I having said that it's
probably from the same data set so I just mentioned.
But I I would expect the insurance company to provide
that rather than the rather than the person being enshivered.
I'm just trying to think of the last time I
did it. It's been a while.
Speaker 2 (32:57):
Yeah, because they put it on you. They all put
it on you. They say, you know, it's very important.
Speaker 3 (33:02):
You know.
Speaker 2 (33:03):
There was a remember where there was the change in
the insurance company said, you really need to work out
how much it's going to cost to build that house
that you want, because what we've got as an assumption
may not cover it. It's all on you.
Speaker 3 (33:14):
Yeah, yeah, yeah, I do, I do. Yeah, No, I don't.
I don't know the answer to that question. I would
assume it would be a little bit more collaborative, but
you might be right. It might be a to get
you to.
Speaker 2 (33:26):
Look, it's insurance. Of course, it's a raught. I mean
we haven't mentioned any specific country companies, but exactly, but
I mean that does I got mine recently and it
had the estimate value to rebuild it, and that added
an automatic sort of inflationary sort of adjustment. And I
must admit I sort of thought, well, sort of getting
(33:47):
a valuer and to go, yeah, and spending a fortune
on that I sort of went fingers crossed. It doesn't
burn down, and if I'm a little bit under I'll
just be doing a lot of diy. God, that's grim,
isn't it.
Speaker 3 (33:58):
It's a little bit grum, But yeah, it works for you.
You stick with it.
Speaker 2 (34:02):
Oh, I might have to up it because we've got
such a nice bathroom. Now, I'll tell you the pleasure
of just renovating the most commonly used room in the house.
What bliss? Anyway to sort of share that with you,
if you come to Auckland, Ashley and we meet for
a coffee, I'll be like, come back and go to
the loop. I at Ashley around to come and use
(34:27):
our bathroom anyway. Okay, here's another one, and this highlights
the struggle that a lot of people have got in
the market right now. So we can have a lot
of fun with our conversations, but it's tough times for
some people. Especially in this text, High Tim. Can you
ask Ashley what he thinks the market will do this
time next year? As we have three rentals appraised and
they are now worth two thirds of their purchase purchase
(34:49):
price and the mortgage is doubled. It's sobering as we
essentially have lost a whole house.
Speaker 3 (34:55):
I hear you, I feel you. So as I said
to you last time I talked to you, Tim, we'll
be in a different position this time next year, we'll
be in a better position. Market will be the house
prices will be increasing, and mortgage interest rates will be down.
But you won't have recovered that sort of value by
this time next year. You're probably talking you know, eighteen months,
(35:16):
two years, maybe longer, depending on where you are around
the country. There will be some parts of the country
that recover those values quite quickly. And I think I've
said that before, but I wouldn't hold my breath on that.
So if you're in a position to do so, I'd
be holding onto those for a while.
Speaker 2 (35:32):
I don't think I'm stepping out of line if I
say that. If you can, if you are suffering from
these I'm not going to say catastrophic loss of value,
but you know, really worrying loss of value. If you
can hang in there, you should do undred, friend, because
when it does move, it will move quicker than any
sort of work scheme you'll come up with.
Speaker 3 (35:53):
Well, yeah, and look, let me put it in perspective.
So the rule of seven point two or the rule
of seventy two in real estate says that probably house
prices need to go up one average seven point two
percent per year year for house prices to double in value.
And house prices have double and value every decade for
the last forty years, so and we know that they
haven't gone up by that sort of value for the
(36:13):
last two or three years, which means that over the
following seven years it needs to be a bit of
catch up. So in really simple terms, I would be
expecting when house prices start going up, to be going
up by sort of you know, nine, ten, eleven, twelve
percent per relum for a period of a few years.
So you know, if you fact that, if you if
your text effect is that into their own situation and
looks at what that looks like, that'll give them some
(36:35):
idea of what's sort of recovery time they're looking at fantastic.
Speaker 2 (36:38):
Look we take a quick moment. We've got the one
roof property of the week coming up next. As I say,
if you join us and track down the property on
your on your own internet, once I mention it, it's
like taking a brief one or two minute holiday. So
just sometimes how the other half live. I w eight
one hundred eighty ten eighty. Oh, actually not I eight
hundred eighty ten eighty. We'll be back in just a
moment eleven minutes to five news Talks.
Speaker 4 (36:58):
He'd be.
Speaker 2 (37:13):
And welcome back to the One Roof radio show. I'm
Tim Beverage, my guest Ashley Church. Right now it is
seven minutes. What is it? Seven minutes two five.
Speaker 1 (37:30):
The one roof property of the week on the Weekend Collective.
Speaker 2 (37:35):
Oh, the property of the week today has Ashley Church
written all over it. I reckon Ashley. You'll have to
start googling. And since you hear it, it's nine hundred
and one Pigeon Bay Road, Banks Peninsula, christ Church. Seven bedrooms.
I can never get this one out. Eight bathrooms obviously
one free of one in their own room, plus the
guests four car garage. Last sold for one point two million,
(37:57):
now valued it two million. So it's where history. I'll
tell you that it's called Glenn Relick Homestead. History meets
refined luxury, originally designed by the esteemed architect architect Cecil
Wood in nineteen twelve. So you can tell it's an
old style house for the Hay family its providence has
steeped in early Canterbury history. It's on about four hectics
(38:20):
of four hectares of Prime Bank's Peninsula. Pasture land has
been designed for easy care, park like grounds. It's got
an all weather tennis court, brand new in ground, saltwater pool.
Just fifty minutes drive from christ Church City and twenty
minutes from akaroa easy commuting distance, yet complete privacy and
seclusion upon arrival, and judging from the photos which I'm
(38:43):
trawling through nine hundred and one Pigeon Bay Road, it
has been gorgeously renovated. Inside it is really beautifully modern.
It's got a touch of the stately to it, the
stately feel to it, and some bold colors, but not
bold in this sort of way that makes it go eh.
It's just beautifully done. And I tell you what if
(39:05):
if you're looking at living in Banks Peninsula and a
spare two or three million, because I'm not sure it's
two million is going to do it? To be honest,
we've been talking about videos. Have you even brought that
one up on your screen? Have you, Ashley?
Speaker 3 (39:14):
I have? It's very to the men are born, isn't it? Well?
It's it was it.
Speaker 2 (39:18):
I think you could say, would you would you buy
a house like that if you in Bank's Peninsula.
Speaker 3 (39:23):
I wouldn't for a couple of reasons, but I can
imagine people that would. You know, so very very.
Speaker 2 (39:28):
Nice one valuations five million to v fair, so we
might have I think it's more like the five surprised
if it goes for a bit more than that. But anyway,
by the way, what's that illustrates earlier point about volatility
and valuation? Yes? It does. Hey, by the way, this
is an easy question to wrap with. I'm sorry we
(39:50):
won't have time for any more course because I ain't
got about a minute to go.
Speaker 3 (39:54):
Uh.
Speaker 2 (39:55):
I know the answer to this question. Will some regions
rise faster than others? It seems like Christich is a
steady inclime, but Wellington's going at a snail's pace. Well
the answer, of course, of course some region will rise
faster than others. Any picks for you.
Speaker 3 (40:07):
Ashley, I mean the traditional Wellington, Central Central Otago etc. Sorry,
not Wellington, Auckland, Central Otago. You would expect to rise
faster just because they're always doing their popular destinations. But
there has been a change taking place over the last
twenty years, which is that regional destinations are becoming much
more popular, so, you know, hard to pick. The reality is,
(40:28):
though they're all going to go up. It's just a
question of how much relative to other parts of the country.
Speaker 2 (40:34):
Excellent, excellent. By the way, just quickly, how are you going?
How are you going on the East coast there? Because
war has had a bit of a caning. It's been
a tough week.
Speaker 3 (40:42):
Yeah, well so they did here too, But we seem
to have, you know, God's sort of in our pocket
here because every time there seems to be a disaster
of some sort of was Gabriel a year or so
back in now we seem to be okay.
Speaker 2 (40:53):
So yeah, yeah, good stuff and thoughts to all those
people are still struggling with the clean up and wire
as well. Hey, thanks Ashley, loveliness lovely to catch up.
We'll look forward to next time. That's actually church and
that was the one. Rue Radios go check out the
podcast where your podcast. Look for The Weekend Collective on iHeartRadio.
We'll be back next to Parents Squad, new guest, and
(41:13):
we're talking fertility. Back soon.
Speaker 1 (41:20):
For more from the Weekend Collective. Listen live to News
Talk SEDB weekends from three pm, or follow the podcast
on iHeartRadio
You're listening to the Weekend Collective podcast from News Talk
sed BET. Such a good time.
Speaker 2 (00:31):
And welcome to Welcome back to the Weekend Collective. Got
a great song to get back into it. Thanks Joe.
That's my producer, Joe Coglin. This is the one riff
radio show. Funny enough, I can't listen to Queen without
remembering the fantastic evening of talkback I did filly in
for Marcus when in one of the links, we're talking
about Queen having sold their catalog for two billion dollars,
and Tony Doe said, yeah, they're more of a novelty band.
(00:52):
The best best evening of talkback ever. Actually quite a
few people agree with them. But still a great band.
But yeah, anyway, somebody who might have a hot take
on there, or they won't necessarily be seeking it. As
a guy with I mentioned that Frank Richie, my panelists before,
who was coming us down the line, on coming to
us down the line on Zoom had one of the
best backgrounds for a zoom call, And funnily enough, we
(01:14):
have the guy who has the best background for a
Zoom call. It is a magnificently stocked bookcase behind him.
He's coming to us from the East Coast and his
name is drum roll please Ashley church kid a Ashley.
Speaker 3 (01:27):
Yeah, I speaking of Hawk's Bay. I can see a
picture in your background. Is that the OLDT ANDG building
in nap Pure I can see there.
Speaker 2 (01:33):
I think it is so. Yes. For those who don't
underware of the studio, we have in the studio one, two, three, four, five,
six large widescreen TVs which go in a sort of
horseshoe shape and they have a sort of montage of
New Zealand iconic, which is because if you were to
take it literally, it would look like that building is
(01:55):
right next to the skytar which is just next door
to the Beehive, which is just next door to the
cable car and Wellington, next door to Mount Taranaki, next
door to some lighthouse I don't quite recognize, and a
clocktail on the Bay of Islands. They're all next time.
Speaker 3 (02:09):
And on the other topic, have you, amongst your many
homages to great music, have you done one on Queen.
Speaker 2 (02:17):
No, that's more Roman travers Bag, probably for in my day,
but I know I've funny thing is with Queen are
some of their anthems? I've been a big fan of Queen,
but I don't listen to them very much lately. So
I realized I'm gonna have to get into a bit
of Bohemian rhapsody of it.
Speaker 3 (02:36):
You're a where Freddy's dead?
Speaker 2 (02:37):
Yes, yes, yes, yes, I mean actually I am. My
musical tastes are kind of retro. What somebody needs to
do is they become a huge star, everyone raised about
them for ten years, and then ten years later I go, hey,
have you heard such and such? I'm late to the party.
It's just my just my vibe, you know. Anyway, good
(02:57):
to see Ashley. Hey, look, I wanted to kick off
with just a brief conversation around the because wouldn't we
give the property of the week. We will often give
an RV, but we'll also give the real estate's estimated
value for something. And there have been quite a few stories,
especially in Wellington lately, of RVs and properties that are
selling well under the RVs. In fact, I think there's
(03:19):
some quite tragic stories about what people might have been
expecting to get paid. So it's a question for you,
but I'm also going to throw it out to the listeners,
is how much do your hopes get elevated by looking
at the RV for something and going, oh goodie, this
could be in our ballpark. And do you pay attention
to the RV because Ashley, do you pay attention or
(03:40):
have you in the past with your when you're a
busy property investor. Where do the RVs sit?
Speaker 3 (03:46):
They're almost meaningless And this is one of those perennial
issues that comes up every time and one of the
major councils puts out a new series of RVs, so
important to understand what they were. There what used to
be called a GV your government valuation. They're now called RVs,
which means rating valuation, and they are conducted by councils
or by organizations on behalf of was once every three years,
(04:06):
and their sole purpose is to determine an equitable basis
upon which to set rates for the following three years,
so they don't have to be accurate. Value is to
be fair. Would probably argue that they have some degree
of accuracy. I'm pretty cimical about that. My argument is
that they're miles out and even if they were correct
on the day that they came out, they are increasingly
(04:27):
less correct as each day passes over. That three year
period of increasing incorrect. Sorry, So when you see these
headlines saying that you know, it sold twenty percent less
than RV or twenty percent over RV, it's essentially meaningless, Tom.
It doesn't mean anything, and RV has got no relation
in my view, to the market value of the property.
Speaker 2 (04:45):
So I guess the reason that we read so much
about them is because they are an easily accessible piece
of data or non data. So that's why they form
the basis of headlines totally.
Speaker 3 (04:56):
The media love them because there's something that they can
hang on to, you know, particularly when markets are hot
and you know you've had an RV of a million
dollars and a properly sales for one point four It
makes a great headline meetingless here line, but it sounds
really good. It sounds and it makes you know in
those in those hot markets, it makes it sound like
properly prices have really taken off. But they don't mean
much at all. They're really important to councils because without
(05:18):
me wouldn't be able to set rates.
Speaker 2 (05:19):
I think it might have been you once who might
have even told me off. Possibly, but because when our
RV came out or whatever, it was. I thought, oh
my goodness, my rates are going to go up because
they've really estimated my properties being worth more. So I
wrote to the councilor and haggled it down by saying, look,
we've we've gotten it. We've got an extra couple of
(05:41):
bedrooms there, but X, Y and Z, this is the
work that needs to be done on the property. And
I think it might have been you as said look
for the saving of one or two hundred bucks on
your rates, that was a dumb move.
Speaker 3 (05:54):
Well, well you probably was. And having an increase in
your rates doesn't actually mean your rates go up. I
won't bore your listeners with the reason.
Speaker 2 (06:01):
No, I meant it had gone up in relation to
other properties. I can hear it with my neighbors. Okay, yeah, okay, yes,
because that is a miss. Actually clear that up for
us at so people my rates.
Speaker 3 (06:13):
People think myv's gone up on my RV's gone up,
So my rates are going to increase. So let me say,
I don't explain this really simply, the council council have
to raise let's I mean one hundred million dollars for
argument's sake, that's million dollars let's say property values go
up on average by ten percent from one RB period
to the next. If your property has gone up by
(06:33):
ten percent, then your your rates aren't delibby any higher
than they would previously other than any increase of the
council and might have put through on their overall costs.
And perversely, if your your house has gone up by
five percent and the rest of the city's gone up
by ten percent, you would even though your house value
had increased, on that CV or that AV, you'd actually
get a relaction on rate.
Speaker 2 (06:51):
That's right, except the only the only reason people go,
how come I'm getting in and increase my rates is
because actually rates are going up all over the country.
Speaker 3 (07:00):
But yes, nothing to do with the value of the property,
is to do with council with spending more money than
they should.
Speaker 2 (07:04):
Basically, I wonder how many people actually make that mistake,
because I for a while I labored under that sort
of impression, but then realized, hang on a minute, that's ridiculous.
In fact, the thing that worked it out I worked
it up for myself only because I thought, well, hang on,
if property prices have doubled in the last few years
or whatever, well their rates haven't gone up that much.
So obviously I've got this wrong. But I can't believe
(07:25):
under that misapprehension.
Speaker 3 (07:27):
Not the way councilors don't treat rbs as a bonanza
for more money. They set their rats completely independently. The
only thing that the RV does is it determines how
much you should pay relative to your neighbor and relative
to the suburb two suburbs across.
Speaker 2 (07:40):
Yeah, actually we ken of I mean, if you're listening,
do you ever pay attention to the r V or
is it as you say, as Ashley says, it's largely irrelevant.
I think the problem is sometimes, actually is that sometimes properties,
when they sell around the RVLL you'd like to think
the RV had sometimes get it right, wouldn't you.
Speaker 3 (08:01):
Well, well, what makes it worse is because when when
an RV is done, I mean, how do does somebody
come through your home? Course they don't. So it's done
by what's called a desktop calculation, which means that somebody
is assessing it without actually looking at your property. So
so but straight away you've actually broken one of the
rules of doing a proper evaluation. So so, by dint
of that alone, they don't know if you've put a
poll on. They don't know if you've decorated your home.
(08:22):
All the other things that might have increased or decreased
its value aren't taken into account. So you know, it's
a as a rating valuation tool, it's pretty good as
a tool to determine what your property's worth. It's relatively meaningless.
Speaker 2 (08:34):
How do you Okay? Well, so if the r vs
relatively meaningless, what is what is the best sort of
starting point to working out what a property is worth?
Because I mean it's I mean, that's is that a
loaded question? I don't know what you said.
Speaker 3 (08:53):
I said, sell it if you want to know what
it's worth solid?
Speaker 2 (08:57):
Well, I mean, would to be fair?
Speaker 3 (08:59):
Is the best barometer? Sure of that? I mean, the
best thing you can do is talk to a real
estate agent and get some indication of what other similar
properties in the area might be selling for. And that's
a reasonable barometer. It's still not perfect, but it's going
to give you some guide as to what you probably
might be with.
Speaker 4 (09:15):
Ah.
Speaker 2 (09:15):
Yeah, Actually, I guess the question is which real estate
agent should you talk to? As well? Because it's just
something I always feel I need to remind myself and
other people listening. Is that if you're talking to the
agent who is selling the property, they are working for
the seller and they are going to give you the
sellers perspective on what it is worth.
Speaker 3 (09:33):
Coreck. So sorry when I said that, what.
Speaker 2 (09:35):
I mean by it's qualifying that for you know.
Speaker 3 (09:38):
Yeah, no, So when I said that, I mean if
you're interested in what your property is worth, and your
property is not on the market, any agent, because most
of them have got access to the same data. It's
the same data set, any agent will be able to
give you some idea. In fact, they'll be keen as
mustard because I think they might be listening in it.
So so you know, you can contact most firms, they'll
come and they'll give you an indication of what comparable
(10:00):
properties in the area have sold for, and then they'll
try and twist your arm to actually sell your problem.
Speaker 2 (10:05):
There you've introduced a factor into the equation there which
which undermines the reliability of that and is if they
want your listing, then there is there might be a
slight tendency on the behalf of that realist state agent
to give you an optimistic sort of presentation.
Speaker 3 (10:19):
Like absolutely so there's two types of agents. There's good
agents who will be honest with you and uten well, no,
that's true.
Speaker 2 (10:25):
Though, I just love the clarity and what you're.
Speaker 3 (10:28):
Who say, look, you know, this is what the property
is worth based on these And then you'll get another
agent who's who's desperate to get the listing, who will
tell you pretty much whatever you want to hear, and sadly,
you know, I'm in the real estate institute will tell
you that doesn't happen, but of course it does, and sadly,
and then what happens, of course, is they get the
listing and then they start emotionally and psychologically beating you
down on price over the next few weeks until they
(10:49):
get you down to the level that the property is
actually worth.
Speaker 2 (10:52):
So okay for buyers then, So obviously, if you want
to value on your house, you talk to a good
real estate agent. They give you a guide and they
probably give you some examples of sales in the area
and on which you can compare the data and see
that they're being reliable. But if you are a seller, sorry,
a buyer, god getting buyer seller. If you're a buyer,
what is the best way for you to find out
(11:14):
and of course in a really hot because you know,
we haven't had this conversation very much on the Property
show because in some of the days gone by, Ashley,
we've been having this conversation in the context of a
really hot market when you don't even have time to
work it out. You get along to the auction and
find that, well it's gone crazy. But now we are
in people have got a bit more time to try
(11:34):
and get there do their homework. So yeah, where would
you start finding out about?
Speaker 3 (11:39):
That much harder for a buyer because the parties are
all sort of conspiring against you as a buyer in
that if you talk to a real estate agent, they're
not going to change you because they're going to put
it back on you and say what do you think
it's worth? And it's harder for you to get access
to that data. So you know, at the end of
the day, you know you would be looking at what
where prices are listed in real estate ads getting an
(12:04):
indication from that. Ultimately it comes down to what you're
prepared to pay. It's interesting you make the point that
you did before because during a hot market, because when
you talk about what's a properly worth the most conservative
party in that whole equation is usually the bank, because
the bank obviously doesn't want to lend you any more
than the security value, so they're very careful to make
sure they get the correct value. But the banks during
a rising market will actually keep amending the valuation on
(12:28):
property as the market continues to rise because they recognize
it's a rising market and that security is greater. So
if they're prepared to do it, that's usually a pretty
good sign that the market's safe. In a market like
the one that we're in at the moment, you know,
generally it comes down to what's that property worth to
you and what are you prepared to pay for it
and how long you're going to hold on to it for?
Speaker 2 (12:46):
What about the role of value. As somebody is texting
me saying just talk to a value, they will tell
you I mean you pay a value for their time
of course.
Speaker 3 (12:52):
Yeah. Well, so the two things. Firstly, and I used
to run the Property Institute of New Zealand which represented
all value is so I have some interest and understanding
of this topic. So two things. Firstly, if you're getting
a evaluation done for a bank, the bank will require
you to use now something called a blind panel. And
the way that works is so in the old days,
you could go along to your friendly valuer who may
(13:13):
or may not have been inspy. You dix versions on valuers,
but you know you might have got a more favorable
one from one than another, and you can take that
along to the bank and use that as the basis
of your loan. Can't do that now. Basically what happens
is the bank will give you an option of two
or three. You won't know who they are. All you'll
know is what each one's going to charge you. So
the bank will tell you what the charge for using
that particular valuer is. You'll select one and they'll do
(13:34):
the valuation and the other. So there's no ability to
have any impact on that. It's completely blind process. And
the other aspect of that is there if you've got
two different or three different valuations done, you would probably
get two or three different values on the property because
you've got as you have with all things offensive. Yeah,
well it can be I don't know what it is now.
It used to be sort of twelve or thirteen hundred dollars.
(13:55):
It's probably a bit more than that now ouch. But
if you did that and that was for one. If
you went and got two or three done, now you
would And I'm not suggesting you should do that. The
point I'm making is it depending on who you get,
you can get a different valuation. So because some valuers
are more conservative than others.
Speaker 2 (14:12):
I guess if you are buying it to invest as
an investor, to rent it, there would at least be
the existing rent on the property possibly as to which
would help you ascertain.
Speaker 3 (14:23):
Because it's a guide, it's not as accurate. It's not
like commercial property, and in fact, even commercial property is
no longer like commercial property. There used to be a
rule of Thumber ten percent of commercial property, which basically
said that the building was worth ten times the annual income,
and that dropped us sort of four or five a
few years ago, and I think now it's I don't
think even that's particularly hard and fast. With residential there's
(14:44):
that that that's very variable. It's a guide, but at
the end of the day, most property investors, let's be honest,
a buying for the capital going over the long term.
So provided the property can pay for itself, all come
close to paying for itself, they'll live with that.
Speaker 2 (14:58):
Okay, we want to take your calls. How do you
if you are buyer. I guess, as Ashley said, you
speak to a good real estate agent as a you'll
get a good picture on it. But if you're buying,
how do you work out what a property is worth?
And of course you know what is a property worth
to you if you've looked at ten houses and you've
been like, oh, I can't find anything, and there's this
one where you think, well, I'll actually, to be honest,
(15:19):
maybe we should just pay an extra twenty grand above
our budget. Maybe then it is worth more to you.
But how do you work out what you're going to pay?
And actually the reason we've started this conversation with Ashley
Churchman guest today is based on just the story about
RVs and Wellington and apparently the Wellington RVs are ridiculous.
There's a property that's sold at tender recently for half
(15:41):
a million dollars less than the RV and the which
was two point one eight and it sold for one
point six, playing into the playing towards the argument that
Ashley not an argument. Actually, I think it's just probably
a fact. Really you can't really rely on RVs. But
how do you set the value of the property that
you are interested when you are a buyer. Give us
(16:01):
a call on that eight hundred and eighty ten eighty.
You can text on nine nine two lines are open.
Let's get cracking. Cancelay Welcome back to FREDI show, won't
(16:22):
your calls? One hundred and eighty eighty text nineteen nine two?
How do you set the value for a property when
you're a buyer? Often people look at the r V,
but apparently it's pretty irrelevant, especially you've seen that story
in Actually church is my guest by the way, Actually
you've seen that church the church gosh, sorry, you've seen
(16:43):
that article. I don't know where that came from. I
came from the Obviously you've seen the article about the
Wellington properties that are selling massively under the r VS,
which is also telling a story about it does tell
a story, really, doesn't it about Wellington's private marketers? Really
in having a case of the dlums, isn't it?
Speaker 3 (17:00):
Well? And also that RB and I don't know exactly,
I've got a property in Wellington and I think they
were set three years ago, which means that it would
have been before it would have been during twenty twenty
one which means it would have been right at the
height of the yes, so it was elevated, and of
course properly values to come back somewhat since then, so
you know, rather than an indicating some major drop, it's
(17:20):
just a reflection of the fact that those were probably
over inflated at the time.
Speaker 2 (17:24):
How much trouble as the Wellington real estate market and then,
I mean, if you've got it's interesting.
Speaker 3 (17:29):
You know, you asked me that question about two months ago,
and I was probably more negative. I've actually seen some
figures since, and I haven't got them in front of me,
but they indicate that despite all of the changes, were
the redundancies of the government's making in the public service.
In fact, the numbers are actually only slightly back on
where they were under Labor. So I think a lot
of that type pably and.
Speaker 2 (17:49):
Tied with the headlines of the number of public service
changes and reductions. Do you think it's be you think,
does it get it? I guess I've always felt that
most real estate or stories set somewhere in a narrower
band than as reported with the boom and bust that
we'd get in the.
Speaker 3 (18:06):
Media, totally, totally and in most cases and I think
Wellington's a really good example of this. I think there's
a lot of headlines, there's a lot of negativity. It'll
actually when the dust settlers will find that it's actually
not nearly as bad as we thought it was in
the market will justu on and at some point, whether
it's late this year or next year, market's going to
recover again all around the country.
Speaker 2 (18:26):
Well, that's a big question, isn't When When did you
say I'm going to hold you to this, Ashley says,
when is the market going to recover?
Speaker 3 (18:32):
When?
Speaker 2 (18:32):
When does it? Ashley?
Speaker 3 (18:33):
Sorry, give us so, let me just repeat what I've
said a couple of times. It's stopped dropping quite some
time ago. Actually, so we're in this weird sort of
period at the moment where prices are more or less
stable and flat. It will start going up again either
when there's absolute certainty that it's not that that mortgage
interest rates aren't going to increase and that really can
only come from the Reserve Bank, or more importantly, when
(18:55):
the Reserve Bank indicates it's going to start slowly dropping
that ocr that'll either be late this year, this year
or early next year. I think that's reasonable certain it's
just a question of watching those it is. Once that happens,
you'll start to what the Reserve Bank doesn't want to
do is cause a stampede. You have people suddenly going
out borrowing money again, so it has to be a little.
Speaker 2 (19:14):
Bit Well, there was something I was having a chat
with one of our corresponders from I think it was
the economists from Westpac pointing out that core inflation in
Australia and other OECD a few other OECD countries was
trending up again. It was a bit of a worrisome
trend that Australia, which does it did make me because
I'm not an economist, but it did make me think
(19:36):
that maybe Adrian always reading that news and gone told, yeah,
let's not get ahead of ourselves. But that's not great news,
is it. No?
Speaker 3 (19:43):
And it's interesting though. I've been reading some stuff over
the last couple of weeks Telly Alexander's done some really
good stuff and what he's saying at the moment is
the major sticking point is the fact that it's not
good enough just to give inflation down and the way
that we have at the moment, we have to have
some of the larger businesses in the country actually starting
to reduce what to reduce what it costs them to
(20:04):
run their busininess rather than passing that post on. So
for example, and accounts was a really good example of this.
So rather than saying, Okay, costs have gone up, we're
going to pass it on to our customers, actually starting
to live within their means. Once you do that, and
once institutionally that starts happening throughout the country, that really
starts to have an impact on flesh nationwide. And we're
kind of in that phase nap. So I think Tony
(20:26):
made a really good point at the end of his article.
He said, to the extent that this continues, it's the
fault of businesses that are refusing to do that and
who are just passing that on to their customers because
that continues to fuel inflation.
Speaker 2 (20:35):
Ah right, Okay, I've got a few texts here to
get into. One of them might require as you slightly
repeat yourself, but it's more specific in focus. Says I
bought a property in Wellington at the peak in twenty
twenty one for one point four million. It's now valued
at nine hundred thousand. It looks like I'll have to
sit on it for longer than I anticipated. When do
you think property prices will return to how they were
(20:57):
at twenty twenty one in Wellington? Or is that a fantasy?
What's not a fantasy?
Speaker 3 (21:02):
Ultimately it depends on wait and the key word is
quite right, it is. It's just time. It's a question
of time. So when it starts to raise again, I'm
going to put a cave in on this. When it
starts to rise again, I think it will start to
raise quite quickly, with the caveat being that the Reserve
Bank's not going to let that get too far out
of control because it doesn't want to see inflation take
off again. So and the reason I say it's going
(21:24):
to rise quickly is because there is a sort of
a and this is a more of a feel thing
than affect thing, but the experience. There is a sort
of an in built desire in the market at the
moment for the property market to take off again. Everybody
wants it to. They just can't.
Speaker 2 (21:38):
Everyone who wants to sell wants it to.
Speaker 3 (21:40):
Well, no, I think everybody does that because even people
that buy, they buy on the expectation that their property
values will continue to increase. People don't pay.
Speaker 2 (21:47):
Everyone who owns wants it to.
Speaker 3 (21:49):
Yes, we'll even that. That's a whole nother conversation. But
I can even argue against that. But that's another that's
a conversation for another day. So there's kind of the
psychological desire at the moment for the market to recover,
and we're all sitting there waiting. It's like we're all
waiting for this start is going to go. And when
that happens, I think you'll find there'll be an orderly
(22:09):
rush if I can put it that way, constrained by
the Reserve Bank not wanting interest rates to get to
a point where people sat down crazy again.
Speaker 2 (22:16):
Okay, just on the value of things. Continuing in that theme,
so this text says, what is the Ashley's opinion of
various websites you know where you can buy and sell property.
For instance, an example on the one roof website where
we get a one roof property of the week, there
is the one roof estimacy estimate which is mediate. Sorry
(22:36):
I was reading too many words. Once one roof estimate
with medium accuracy, it says, and then it's got its
low so low of one point six r V is
one point nine to two. The one roof estimate is
two million and the high estimate is two point three six.
What do we know about those as guidelines?
Speaker 3 (22:55):
Well, one roof one I used to write for one
roof and I don't know whether they still use the
same value, but they used to use a crowd called velocity.
Speaker 2 (23:02):
Well, okay, that's pretty good.
Speaker 3 (23:04):
Yeah, and respected, And so that's what they do. They
deal in property data, but they're all limited by the
fact that they can only make an assumption about what
might happen in particular area. So what they what they
generally do is they'll take the base data that they've
got and they'll add to it based or decrease it
based on what else is going on in the market.
So it's a it's a ballpark figure, and there's a
(23:25):
number of these. There's Velocity, there's a crowd called core Logic.
Those are the two big ones, and then there's a
few others around. Is the real estate Institute's got their
own data set. Most real estate firms have got their
own data stats that have been around for a period
of time, so they've all got their way of setting it.
But at the end of the that it's a uestimate
as to what it's going to.
Speaker 2 (23:43):
Be worth actually have We regularly have the chief economists
from Velocity come on our show, and I've actually, as
a rule of thumb, if you are as someone who's
interested in getting the market, I would have thought that
if there's data that you can pay for. I mean,
you can get plenty of data from Velocity and their
property reports if you subscribe, But if you want to
get that extra data, that would probably be a smart
first investment, wouldn't it to start getting a feed it's
(24:03):
going to.
Speaker 3 (24:03):
Be probably going to be cheaper doing it through them,
that it will be through through a valuer. Keeping in
mind that it's going to be a desktop valuation, which
means that the lolossit is not going to come through
your house. They're going to base their evaluation based on
data they've got available to them. Which comes back to
the question you asked me at the beginning, what's the
best way to get a valuation?
Speaker 2 (24:20):
I guess if I was looking at buying a house,
and let's pretend I don't own my own house yet,
if I was doing something like that, I'd look at
values in the area. I'd be thinking, Wow, okay, this
is a suburb, we can afford of these sorts of properties,
And then i'd look at what I could borrow, and
then i'd go and look at the house, and I'd
be a long way down the track to working out
whether I wanted to put a bit in or not.
Speaker 3 (24:42):
Yeah, incidentally, that's reasonable, Yeah it does. And one other
way determining what a property's worth is go along to
a few options and just watch them because really good
and freak you out. Well, don't put your hand up,
don't work.
Speaker 2 (24:59):
I was going to say something something, Oh that was
me sorry actually, because I do remember my first fora
when I didn't get into the market, was in Melbourne
and I looked at a place in a place called
middle Park, which I thought looked quite good and it
had a bit of work it needed to be done.
And I said to the real estate agent, I've been
around and looked at a few And I said to
the real estate agent, what are you what sort of
(25:20):
price estimate? And he said, and I'd been wasted time.
You know, when you'd go to an auction, we'd just
go for way more than that. And he told me
what it was. It might have been two fifty thousand
back in the day, and I said, now, come on,
I've been to plenty of auctions and it's wasting my
time and I'm not going to look at any more
of your properties if you don't tell me the truth.
Thing he gets, Okay, you're wasting your time. I said,
(25:40):
thank you, thank you. Anyway, let's take some calls one
hundred and ten eighty. How do you set the value
for a property, especially if you're a buyer and you
don't have the input from the real estate agent who's
given you his or her best guess on it. And
Ashley Church he had to take any questions you might
have about the market.
Speaker 5 (25:57):
Tony, Hello, I just don't see Christion. Sorry, Tim, I.
Speaker 2 (26:07):
Just did I have it all the time.
Speaker 5 (26:11):
That's no good, especially if somebody who's famous in you
that's such a good singer. But what I was going
to say, when I'm looking at property and I and
I sort of bought a few places many years ago,
I'm obviously different pricing structure, but I always would have
to be happy to pay a bit more if I
really like where a place is. In other words, if
(26:32):
I like the area, I think you can always pay
a little bit more. I subscribe to the old idea
of the worst house is in the best directors. A
lot of places, especially units, you can improve them, but
you can't improve where the place is. So that's always
(26:53):
been my philosophy.
Speaker 2 (26:55):
Location location argument, isn't it, Tony?
Speaker 5 (26:59):
But all it basically is yeah, And I think you
know because I've never bought a place that I didn't
like where it was, and I wasn't prepared to live
in it, even as a rental. Now I've got friends
that have bought places in the worst possible areas and
they've made extraordinary capital gains because they've got that idea
out of their head. But for me, I don't expect
(27:21):
somebody to live in a place that I would have lived.
Do you get what I'm saying?
Speaker 3 (27:25):
Yeah?
Speaker 2 (27:26):
I know that that's actually a tough one for some
investors because they want to find something they'd live in
as an investor, when somebody might actually have not the
quite the same standards. What was your approach, Ashley, Well.
Speaker 3 (27:36):
I think that the thing that Tony has latched on too,
because the location, location, location is a mantra when it
comes to property. It's not necessarily true, but the point
is it worked for Tony, and so I think what
is true is that people who invest in property and
no property well will have a criteria that they apply
and that they use when they're determining what they're going
to buy and how much they're going to pay for it.
(27:57):
But the thing I think she thought was really interesting
from Tony's early point was him talking about being prepared
to pay a bit more. Ironically, he's actually latched on
to that is the key to what causes house price inflation.
People will pay. House price inflation is caused by people
who are prepared to pay more than somebody else is
prepared to pay for it. They might actually sound really obvious,
but it's an important point. But they'll do that for
all sorts of reasons. Some people will do it because
(28:18):
they can see the potential value of it in the future.
Some will do it because they think they can make
some improvement to it to make it worth more. Some
will do it because they love the home and they're
prepared to pay more for it, even though it's not
a wise economic decision to do so. There are all
sorts of people reasons that people will pay more. But
when they pay more, that's what drives house price inflation.
And the other reason of course that people will do
it and good in their droves in twenty twenty one
(28:39):
is that they can borrow money cheaper, so they can
borrow more, so they're prepared to actually put there more
on the table because they can afford to service and
moret digital lower interest rate.
Speaker 2 (28:48):
Anything on that tiny.
Speaker 5 (28:50):
Well, I think the main thing that the purchases have
always got to remember, and a lot of the teams
to forgive the agent is working for the seller. Yeah,
trying to achieve the biggest price for the property. Now,
a lot of buyers they seem to move side of
that to a certain degree. And another way, I mean
before I bought a units and a dream like years ago,
(29:11):
I would have worked at about forty different places. And
when you see something that you know is dead right
and it's a reasonable price compared to what you've seen,
that's what you can make your decision on. You know
what I'm saying, Yeah, I do tourning.
Speaker 3 (29:24):
I differ with you in one respect though, and I
understand what you mean when you say they're working for
the seller, and in a general sense that's true because
at the end of the day, they're trying to move
on the property for their client. But one of the
things that are real estate state agent will do is
they will match up a buyer and a seller, and
so their role is to act as a kind of
account to bring some sort of reality into that equation.
So it's not quite as simple as just saying for the.
Speaker 2 (29:46):
Seller, yeah, hey, good, such thanks appreciate it. Somebody's texted me,
by the way, in that middle Park and it Ashley
just saying middle Park, Melbourne for two fifty k. Well,
now the medium price in middle Park would be about
two and a half million.
Speaker 3 (30:00):
I've had this conversation before, Tim.
Speaker 2 (30:06):
I mean I wasn't really in a position to pay
much back in the day then as a transient actor.
But yeah, I do remember that, mind you. I think
the house had a few piling issues. I probably would
have ended to spend a fortune on it, let's be honest. Anyway,
we've settled in cin Helias quite happily. A few more
texts as well, just a quick basic one on rates
from Shane. Hi, guys, can you please explain why the
(30:28):
house is included in the rates bill?
Speaker 3 (30:31):
So there's two different types of rates is land rates
land valuation sorry, and a capital valuation, So land valuation.
I don't think there's many councils left in the country
that do this. Land valuation is where the value is
based entirely on the value of the land, and there's
some reasons why council would do that. And most councils
now do a capital valuation, which is the land and
(30:52):
the dwelling and the structure, and which is obviously in
most cases will be a lot higher. There's no I mean,
there's reasons council you use one or the other ones.
I say, very few left do just land. Most of
them do capital evaluations.
Speaker 2 (31:06):
Now, all right, got lots of text with some interesting questions,
and here's one. In fact, no not, here's not one.
Because I'm going to take the break. It's twenty to four.
We'll be back with Ashley Church Property Property. Let's call
them a guru today. I think we might call them
the guru on eight hundred eighty ten eighty taking your
cause text nine two nine two back in a ticky yes,
(31:45):
welcome back. I'm sure that my producer Joseph Colgan is
playing these numbers from Queen just for the benefit of
my colleague Tony dough After our fantastic and I have
talked back about Queen anyway, This is the one Rifradia show.
My guest is Astley Church talking about property values, starting
off with look Wellington properties are a lot of them
selling well under their r vs. Seems that maybe Ashley's
hid on the XP for that that a lot of
(32:05):
those values were set in the middle of the boom
when their property prices went through the roof. But anyway,
how do you set the property value for you when
or when you're looking to buy? How do you find
out what something's really worth? Eight hundred and eighty ten
eighty or text nine two nine two. We've got a
lot of questions about some interesting angles on value Ashlely.
This one here tied and with insurance on our thoughts
(32:26):
on RV and house insurance, especially where the house may
be insured on the market value rather than replacement value.
It's okay because getting the value for your insurance is
a very important business, isn't it.
Speaker 3 (32:39):
Yeah, I would have thought the insurance company is certainly
the bigger ones would have their own source of data
for that, which is all I having said that it's
probably from the same data set so I just mentioned.
But I I would expect the insurance company to provide
that rather than the rather than the person being enshivered.
I'm just trying to think of the last time I
did it. It's been a while.
Speaker 2 (32:57):
Yeah, because they put it on you. They all put
it on you. They say, you know, it's very important.
Speaker 3 (33:02):
You know.
Speaker 2 (33:03):
There was a remember where there was the change in
the insurance company said, you really need to work out
how much it's going to cost to build that house
that you want, because what we've got as an assumption
may not cover it. It's all on you.
Speaker 3 (33:14):
Yeah, yeah, yeah, I do, I do. Yeah, No, I don't.
I don't know the answer to that question. I would
assume it would be a little bit more collaborative, but
you might be right. It might be a to get
you to.
Speaker 2 (33:26):
Look, it's insurance. Of course, it's a raught. I mean
we haven't mentioned any specific country companies, but exactly, but
I mean that does I got mine recently and it
had the estimate value to rebuild it, and that added
an automatic sort of inflationary sort of adjustment. And I
must admit I sort of thought, well, sort of getting
(33:47):
a valuer and to go, yeah, and spending a fortune
on that I sort of went fingers crossed. It doesn't
burn down, and if I'm a little bit under I'll
just be doing a lot of diy. God, that's grim,
isn't it.
Speaker 3 (33:58):
It's a little bit grum, But yeah, it works for you.
You stick with it.
Speaker 2 (34:02):
Oh, I might have to up it because we've got
such a nice bathroom. Now, I'll tell you the pleasure
of just renovating the most commonly used room in the house.
What bliss? Anyway to sort of share that with you,
if you come to Auckland, Ashley and we meet for
a coffee, I'll be like, come back and go to
the loop. I at Ashley around to come and use
(34:27):
our bathroom anyway. Okay, here's another one, and this highlights
the struggle that a lot of people have got in
the market right now. So we can have a lot
of fun with our conversations, but it's tough times for
some people. Especially in this text, High Tim. Can you
ask Ashley what he thinks the market will do this
time next year? As we have three rentals appraised and
they are now worth two thirds of their purchase purchase
(34:49):
price and the mortgage is doubled. It's sobering as we
essentially have lost a whole house.
Speaker 3 (34:55):
I hear you, I feel you. So as I said
to you last time I talked to you, Tim, we'll
be in a different position this time next year, we'll
be in a better position. Market will be the house
prices will be increasing, and mortgage interest rates will be down.
But you won't have recovered that sort of value by
this time next year. You're probably talking you know, eighteen months,
(35:16):
two years, maybe longer, depending on where you are around
the country. There will be some parts of the country
that recover those values quite quickly. And I think I've
said that before, but I wouldn't hold my breath on that.
So if you're in a position to do so, I'd
be holding onto those for a while.
Speaker 2 (35:32):
I don't think I'm stepping out of line if I
say that. If you can, if you are suffering from
these I'm not going to say catastrophic loss of value,
but you know, really worrying loss of value. If you
can hang in there, you should do undred, friend, because
when it does move, it will move quicker than any
sort of work scheme you'll come up with.
Speaker 3 (35:53):
Well, yeah, and look, let me put it in perspective.
So the rule of seven point two or the rule
of seventy two in real estate says that probably house
prices need to go up one average seven point two
percent per year year for house prices to double in value.
And house prices have double and value every decade for
the last forty years, so and we know that they
haven't gone up by that sort of value for the
(36:13):
last two or three years, which means that over the
following seven years it needs to be a bit of
catch up. So in really simple terms, I would be
expecting when house prices start going up, to be going
up by sort of you know, nine, ten, eleven, twelve
percent per relum for a period of a few years.
So you know, if you fact that, if you if
your text effect is that into their own situation and
looks at what that looks like, that'll give them some
(36:35):
idea of what's sort of recovery time they're looking at fantastic.
Speaker 2 (36:38):
Look we take a quick moment. We've got the one
roof property of the week coming up next. As I say,
if you join us and track down the property on
your on your own internet, once I mention it, it's
like taking a brief one or two minute holiday. So
just sometimes how the other half live. I w eight
one hundred eighty ten eighty. Oh, actually not I eight
hundred eighty ten eighty. We'll be back in just a
moment eleven minutes to five news Talks.
Speaker 4 (36:58):
He'd be.
Speaker 2 (37:13):
And welcome back to the One Roof radio show. I'm
Tim Beverage, my guest Ashley Church. Right now it is
seven minutes. What is it? Seven minutes two five.
Speaker 1 (37:30):
The one roof property of the week on the Weekend Collective.
Speaker 2 (37:35):
Oh, the property of the week today has Ashley Church
written all over it. I reckon Ashley. You'll have to
start googling. And since you hear it, it's nine hundred
and one Pigeon Bay Road, Banks Peninsula, christ Church. Seven bedrooms.
I can never get this one out. Eight bathrooms obviously
one free of one in their own room, plus the
guests four car garage. Last sold for one point two million,
(37:57):
now valued it two million. So it's where history. I'll
tell you that it's called Glenn Relick Homestead. History meets
refined luxury, originally designed by the esteemed architect architect Cecil
Wood in nineteen twelve. So you can tell it's an
old style house for the Hay family its providence has
steeped in early Canterbury history. It's on about four hectics
(38:20):
of four hectares of Prime Bank's Peninsula. Pasture land has
been designed for easy care, park like grounds. It's got
an all weather tennis court, brand new in ground, saltwater pool.
Just fifty minutes drive from christ Church City and twenty
minutes from akaroa easy commuting distance, yet complete privacy and
seclusion upon arrival, and judging from the photos which I'm
(38:43):
trawling through nine hundred and one Pigeon Bay Road, it
has been gorgeously renovated. Inside it is really beautifully modern.
It's got a touch of the stately to it, the
stately feel to it, and some bold colors, but not
bold in this sort of way that makes it go eh.
It's just beautifully done. And I tell you what if
(39:05):
if you're looking at living in Banks Peninsula and a
spare two or three million, because I'm not sure it's
two million is going to do it? To be honest,
we've been talking about videos. Have you even brought that
one up on your screen? Have you, Ashley?
Speaker 3 (39:14):
I have? It's very to the men are born, isn't it? Well?
It's it was it.
Speaker 2 (39:18):
I think you could say, would you would you buy
a house like that if you in Bank's Peninsula.
Speaker 3 (39:23):
I wouldn't for a couple of reasons, but I can
imagine people that would. You know, so very very.
Speaker 2 (39:28):
Nice one valuations five million to v fair, so we
might have I think it's more like the five surprised
if it goes for a bit more than that. But anyway,
by the way, what's that illustrates earlier point about volatility
and valuation? Yes? It does. Hey, by the way, this
is an easy question to wrap with. I'm sorry we
(39:50):
won't have time for any more course because I ain't
got about a minute to go.
Speaker 3 (39:54):
Uh.
Speaker 2 (39:55):
I know the answer to this question. Will some regions
rise faster than others? It seems like Christich is a
steady inclime, but Wellington's going at a snail's pace. Well
the answer, of course, of course some region will rise
faster than others. Any picks for you.
Speaker 3 (40:07):
Ashley, I mean the traditional Wellington, Central Central Otago etc. Sorry,
not Wellington, Auckland, Central Otago. You would expect to rise
faster just because they're always doing their popular destinations. But
there has been a change taking place over the last
twenty years, which is that regional destinations are becoming much
more popular, so, you know, hard to pick. The reality is,
(40:28):
though they're all going to go up. It's just a
question of how much relative to other parts of the country.
Speaker 2 (40:34):
Excellent, excellent. By the way, just quickly, how are you going?
How are you going on the East coast there? Because
war has had a bit of a caning. It's been
a tough week.
Speaker 3 (40:42):
Yeah, well so they did here too, But we seem
to have, you know, God's sort of in our pocket
here because every time there seems to be a disaster
of some sort of was Gabriel a year or so
back in now we seem to be okay.
Speaker 2 (40:53):
So yeah, yeah, good stuff and thoughts to all those
people are still struggling with the clean up and wire
as well. Hey, thanks Ashley, loveliness lovely to catch up.
We'll look forward to next time. That's actually church and
that was the one. Rue Radios go check out the
podcast where your podcast. Look for The Weekend Collective on iHeartRadio.
We'll be back next to Parents Squad, new guest, and
(41:13):
we're talking fertility. Back soon.
Speaker 1 (41:20):
For more from the Weekend Collective. Listen live to News
Talk SEDB weekends from three pm, or follow the podcast
on iHeartRadio
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