January 17, 2025 • 41 mins
ASB has cut its 18 month fixed term loan rate to 5.39% following cuts by Westpac and BNZ.
All three of the banks' six-month rates are now at 5.99% as they fight to be the bank of choice for mortgages.
This comes alongside rumours of a foreign buyer ban reversal - with experts saying it could work, but rules need to be more flexible.
LISTEN ABOVE
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks EDB.
Speaker 2 (00:12):
Sound a scratch up ticket by two twelve PA tagging
gas weird still time, let's see us wrong?
Speaker 3 (00:22):
News Talk zed B. You're with the Weekend Collective Jason
Walls in for Tim Beveridge, who's away this week, and
we've got the one roof radio show, The Rundown with
Ed McKnight, resident economists at ope's partners.
Speaker 1 (00:36):
Ed.
Speaker 2 (00:36):
How are you doing, Jackson? I'm so excited to be
talking to you today.
Speaker 3 (00:39):
Yeah, I'm excited to be talking to you about some property,
some housing. How good?
Speaker 4 (00:43):
Yeah.
Speaker 3 (00:43):
I want to start with this because a ASB has
cut its eighteen month fixed term loan rate to five
point thirty nine, following cuts by Westpac and by B
and Z. Now all three of these banks six months
rates are now at five point nine to nine percent
as they fight to be the bank of choice for mortgages.
And this comes alongside rumors apparently of a foreign Buyers
(01:04):
band reversal, with experts saying it could work, but the
rules would need to be a little bit more flexible.
So we got we're going to be taking your calls
this afternoon. So oh, eight hundred and ten eighty. If
you got a question for Ed, probably a question for
Ed rather than me, because he's the expert. I'm just
the guy that I'm just the loud mouth with the questions.
But before we get some calls from listen, I'm curious,
from your perspective, what's the reason behind these cuts that
(01:27):
we're seeing in bank interest rates.
Speaker 2 (01:29):
Well, it's quite funny because I was over in Europe
in the holidays, and midway through I thought, do you
know what, I'm going to log on and see what's
happening with the interest rates, And one thing I was
very surprised about is that the wholesale interest rates, So
just think of this as what it costs the bank
to borrow money and then lend it to people like
you and me. That went down by about zero point
(01:50):
two five percent over the break, and I was like, oh,
that's very interesting. So it's not surprising that we then
see ASB making a small cunt, you know, zero point
two percent off their one year rate. Now, I think
ASP have been pretty clever move so early in the
year because they are the first bank to make any
meaningful cut. In twenty twenty five, Westpac did get just
(02:14):
ahead of them the day before on the seventeenth, they
cut their six month rate, as you'd said, but HAYSB
went a little bit further, cutting their one year rate
and their eighteen month as well. So now ASB are
the kind of leaders in the market as far as
I'm concerned, at five point three nine percent for the
eighteen month rate, five point five nine for that one
year rate as well.
Speaker 3 (02:34):
Interesting that you were talking about the Europeans and so
this is this cut more based on what's happening overseas
rather than in the New Zealand market because the Reserve
Bank haven't moved that yet their interest rates that obviosly
our call is on February nineteenth, So is this is
this more based on what's happening overseas rather than in
the New Zealand market.
Speaker 2 (02:51):
I think it's mainly what's happening with what it costs
the banks to borrow money and lend it out. Now
that that's related to a whole heap of things. One
of the main things that is impacted by that is
what people think the Reserve Bank is going to do,
and what you often see is that banks will anticipate
and the markets will anticipate what is the Reserve Bank
going to do, and then they move beforehand. Now, one
(03:14):
interesting thing is the Reserve Bank Governor Adrian or when
he last made his press conference cutting the ocr by
half a percent, he said, you know what I think
we're going to do next time. I think we'll probably
do another half a percent. So there's probably some anticipation
of that going on. I expect that many of the
other banks will probably follow asb's lead in terms of
(03:35):
trimming some of their rates early in January. The one
thing that I just really cautioned borrowers out there is
I don't think we're going to see a repeat of
what we saw in twenty twenty four happening this year.
Speaker 3 (03:49):
In terms of rate cut after rate cut after ratecut.
Speaker 2 (03:51):
There were huge, huge discounts happening or drops happening in
interest rates last year, and I think people have forgotten that.
At the start of twenty twenty four, asb's one year
interest rate was seven point four percent. Okay, fine, it
was seven point three nine percent, but basically seven point
four percent, And what we saw throughout the last twelve
(04:12):
months is a drop of I think it was about
one point eight percent. We've basically gone from seven point
four down to five point six ish. Now we're not
going to see another one point eight percent cut again
in twenty twenty five.
Speaker 3 (04:26):
Are you talking about mortgage rates or from the OCR
where we're not going to see another one point five
basis points cuts from one point five percent cut from
the Reserve Bank or are you talking mortgage I'm talking
mortgage registrates in that case. Now, if we're talking really
about the OCR, we're sitting at four point two five percent,
the kind of terminal rate of how low are we
going to go? Most banks are saying somewhere between three
(04:48):
percent and two point seven five percent.
Speaker 2 (04:51):
So again, what have we seen? We've seen. We peaked
the OCR at five point five percent. We've chopped off
that matte bloody math has not gone too well. We've
dropped off one point two five percent. Are we going
to see that again? We probably will see another one
point two five percent off the OCR very slowly. Won't
(05:11):
all happen in twenty twenty five? In my view, I
think we'll probably see the last few cuts happening into
twenty twenty six. But in terms of the mortgage interest rates,
which is what we will care about when we're when
we're fixing our loans, and I know that. I think
you said you'd recently, over the last couple of years
picked up a loan, so we won't dig into that.
I don't think we're going to see another one point
eight percent cut off that one year rate which most
(05:32):
of us fix in. For my pick is we're going
to end.
Speaker 3 (05:36):
Low fives low fives, because I did see an article
in the Herald that said mortgage holders are bracing for
a rate in the fours. You just don't think we're
going to get there.
Speaker 2 (05:45):
You might get to high fours. I mean, you'll never
say never, but we're not going back to four percent.
From my view, I don't think we're going to see
another four percent for many, many, many years.
Speaker 4 (05:55):
Yeah.
Speaker 3 (05:55):
Do you know what I was thinking the other day
at is how in America you can lock in your
interest rate for thirty years. And imagine if you bought
in the days when interest rates were zero point twenty
five or something like that, you'd be you'd be making
money handle a fist.
Speaker 2 (06:09):
Essentially, you'd be really happy. Or even there are people
who fixed for five years at two point nine nine percent,
and those people who were smart enough to do that.
And let me be clear, I wasn't one of those people. No,
because back at that time, the talk out of most
economists was that interest rates through interest rates were going
(06:29):
to be low for a very very long time, and
that two point nine nine percent, well, in the context
of what economists thought at the time, Wow, maybe it
wasn't that great. Now, there were some people who were
much smarter than me, like Tony Alexander, another economists who
was telling everybody to fax at two point nine nine
for those five years, and.
Speaker 3 (06:47):
He was right, Yeah, geez, two point nine nine I
met six point nine nine. At the moment, we're coming
up for renewal soon. And the thing is we are
February fourteenth. The Reserve Bank's decision is on the nineteenth.
So can I ask you just from my own perspective here,
can I float for just a week and then the
next week when I get an indication about what the
(07:09):
Reserve Bank's doing, then I can start up making some decisions.
Is that a good perspective? Is that something smart to do?
Speaker 2 (07:14):
Yeah, that's something that quite a few borrowers decide to do. Now,
there is a little caution about this The good thing
about your situation is you've only got a very short
period of time between when your mortgage interstraight comes off
and when the Reserve Bank makes their decision. So if
I was a mortgage advisor, which I'm not, a legitimate
piece of advice to somebody in that situation might be yeah,
(07:36):
float for a week, and a number of our clients
and Open's partners do that. Now, I've seen other people
borrowers who are saying, well, you know it's early January,
the next ocer cat's coming in mid maybe I'll float
for six weeks or so. To that, I'd be like, well,
six weeks on floating is actually a very very long time, yeah,
(07:56):
because you're paying over an extra percent per year more
just to be on floating. And so that's sometimes where
the numbers may not make sense. The other thing in
that situation, some borrowers can get quite disappointed when the
OCR makes a cut, but the banks don't drop or
don't pass on that full OCR cut. So there might
(08:17):
be a half a percent cut in the OCR, and
you might get point two percent off the one year rate,
something along those lines, And some borrowers might say, hey, well,
I've just been paying quite a lot of money on floating.
Maybe that didn't quite make as much sense as they thought.
What's really important to recognize is we are past the
point where a half a percent cut in the OCR
(08:37):
gets passed on to a half a percent cut in
a mortgage interest rate. Again, if I take you back
to early to mid twenty twenty four, Adrian or just
had to make a sounding like he was maybe going
to cut the rate, and you would see the wholesale
markets really drop quite quickly, and I'd say, great, we're
going to have lower interest rates. We're going to see
a lower OCR. Let's pass that on or bet on
(09:00):
it right now. And so you would see the banks
cutting their rates even though the OCR wasn't even moving.
Now we're past that point of anticipation and you see
a half a percent cut in the OCR, and you
might see a point two percent cut off your mortgage
interest rates. So people just need to bear in mind
or temper their expectations about how far are we going
(09:22):
to see those interest rates continue to fall?
Speaker 3 (09:23):
And when it comes to those OCR cuts and these
OCR statements, I mean, it's not even about the cut
these days, it's about what happens next. Where the indication
is where things are going. So if you look, if
you put your Economs hat on, it's been on this
whole time, by the way, but to keep it on
while I ask you, what do you think his forward
looking projections are going to be if he's been hinting
at these fifty basis points cuts. At one point, there's
(09:45):
even some questions about us seventy five basis point cuts.
What happens next in Adrianaor's mind when he's looking out
into twenty twenty five after this February nineteenth.
Speaker 2 (09:55):
That's a good question. So if I imagine we're Adrian
Aura's right now, I believe he's got a holiday home
somewhere in the Lower North Island, probably not the santin news.
Speaker 3 (10:03):
Talk or AE you're listening, Oh, eight hundred eighty ten eighty,
we'd love to have you on the show.
Speaker 2 (10:08):
That's nothing bad about news talks, he'db it's more like
he's probably not listening to me. But if as Adrian
all right now, or Karen Silka, the Deputy Reserve Bank
Governor or assistant can't remember, they should be pretty comfortable
at the moment because they're going to be looking at
how is the economy evolving? And I think it is
probably evolving along their expectations. They are seeing some negative
(10:32):
things happening at the moment. Unemployment has increased to four
point eight percent, it is expected to continue to increase.
And what they need to be comfortable about comfortable about
is that inflation is coming down. So what do they
want to see. They want to see businesses not raising
their prices. They want to see businesses saying, hey, we're
(10:52):
struggling for a lack of customers. At the moment, we've
got a bit of what we call us economists called
productive of capacity, i e. We've got enough staff and
we've got enough stuff that we could make more goods
or we could provide more services if we needed to.
And so we're not going to increase our prices. And
so even though there is some negative things happening in
the economy at the moment, I would say that's probably
(11:15):
what the Reserve Bank is looking for, because they want
to make sure that businesses don't think that times are
so good that they're going to keep increasing their prices.
Because what does the Reserve Bank want to do. We've
got inflation within that target band of one to three percent.
Think it was two point two percent last time. Next
time the data gets released, they're going to be wanting
to make sure that it is still anchored at that
(11:36):
two percent.
Speaker 3 (11:37):
Now, walk me through why infletion comes back to mortgage rates.
Speaker 2 (11:41):
Well, inflation is the main thing that the Reserve Bank
is targeting, right, because inflation is good for nobody. We
call it. Us economists called it a thief in your
back pocket because if you've got one hundred dollars in
your bank account, well, in a year's time, that one
hundred dollars isn't going to buy the same amount of
stuff that it can. Today, we always think about a
(12:02):
packet of lollies like a two dollar mixed. Well, blind
me back back in my day, when I was kicking
my day, the two dollar mixture was only a dollar,
and well, back I always think of it as volume
as well. Back in the early nineties, two dollar banks yr. Gosh,
that'll get you a whole heap of stuff. Now I haven't,
I must, I haven't been to a dairy recently in
order to two dollar mixt year. But I bet you
(12:24):
you don't get as many logs for your money's in
there it's a rip off that and so what the
Reserve Bank whats to make sure is that we've got
low and stable inflation between one to three percent, targeting
that two percent. Now, what can the Reserve Bank do
to stop inflation going up? They can hike up interstrates
because when interest rates are high, that does two things.
(12:44):
It stops us borrowing to spend, which means people spend less.
And then on top of that, it also encourages people
to save because you get a better return on your money.
And so the way that interest rates are linked is
that that is the Reserve Bank's main tool to stop inflation.
Speaker 3 (12:59):
Interesting, and you did mention employment there as well. They
don't actually technically have to worry about that anymore because
the government kibosh that mat Yeah.
Speaker 2 (13:05):
So that was part of the d date they were
targeting maximum sustainable employment. And I guess what the government
was trying to do with that change is they didn't
want the Reserve Bank to have two competing mandates. Now,
I must have been at that specific time there wasn't
really that much of a trade off between those two mandates.
(13:28):
But I think it's probably a good thing that we've
just got the Reserve Bank sole focus on. It's one
thing inflation, because inflation is nobody's friend.
Speaker 3 (13:35):
Yeah, and it's back down within that within that that
band as well. And we've got inflation numbers out leader
this week.
Speaker 4 (13:43):
Is it.
Speaker 3 (13:45):
That's news? I think it is that. That's from our newsroom,
So we will keep we will keep you across that
when it comes interested in is now the time to
sell or buy it? It really does come back to
this when we're talking about property. Is now the time
to sell? Is now the time to buy? Or should
we just be waiting to see what the market looks like.
Speaker 2 (14:02):
It's quite funny because at the end of of twenty
twenty four I wrote two articles for one ROOF. I
wrote the seven reasons why I thought it was the
right time to buy my first house, not my first
property that I am because I've been investing in property
for a while, but the first house that I would
ever live in. And I wrote the seven reasons why
now was the time to buy? And then the following
week I wrote the six reasons why it was not
(14:24):
the right time to buy a house. And depending on
what you think, you will either agree with one or
not the other.
Speaker 3 (14:30):
Right seven and one was sex, so there's a clear winner.
Speaker 2 (14:33):
Well, in the end, I decided to buy a house,
and I'll tell you the reason why, specifically as an
owner occupier, is that I could see interest rates coming
down and we've seen quite large drops. That does two
things to me. That tells me a it's more affordable
to buy a house than it was a year ago
in terms of being able to afford the mortgage. The
second thing that also means is I believe that we
(14:53):
probably will see some house price growth in twenty twenty five,
and so perhaps it will be slightly cheaper to be
able to buy the house today compared to or back
in December, compared to what it would be in six
months time. I mean there are some other changes as well.
Speaker 3 (15:06):
Yeah, I'll tell you what we bought in twenty twenty one,
and we bought off the plans and so it's a
beautiful wee apartment. It's tiny, it's less than the size
of this room. Doesn't help the listeners at home. It's
about forty eight square meters.
Speaker 2 (15:18):
We love it.
Speaker 3 (15:18):
It's beautiful. But since then prices have gone down quite significantly,
and so we're sitting in a perspective where you know,
we could be the first people in New Zealand's history
to lose money on property, and it does get It
kind of gets you. So what would be your advice
to somebody like myself and my wife. We've got an
eight year mortgage, so we're trying to pay it off
as quickly as possible, but we're really worried about the
(15:39):
fact that it's just way worth, way less than.
Speaker 2 (15:42):
When we bought it. Yeah, your mortgage is quite quite
short at eight years. Was there a specific reason behind that.
Speaker 3 (15:48):
We looked at how much we'd be paying back in
interest and it just scared the Jesus out of us,
and we thought that we just you know, it's the
weekly payments aren't crippling. It's about eleven hundred dollars a week,
so and it's quite a small place. We had a
pretty sizable deposit because we saved up for a long time.
Speaker 2 (16:05):
And it's an investment property. Now you still go to
where we live there. Oh cool. Now, a couple of
things that I'm picking up there. The first thing that
I'd say is you wouldn't be the first person to
lose money and real estate in New Zealand. We've always
got to remember that it is not always a you
can never lose money and money and property. You absolutely can.
Most people do tend to make money over time, though,
(16:27):
and the reason they make money is that they hold on.
And so the first and uncomfortable and maybe quite obvious
thing that I'd like to point out is you need
to hold on as the main thing. And in fact,
cool Logic do some really good analysis where they group
people into two buckets. First, we've got the bucket of
(16:48):
people who made money sold their property and made money
through the property's value going up, so they sold more
for than they bought it. And then they've got this
other bucket of people who were the opposite. They sold
their property and they sold it for a price less
than they bought it for. Now, the major difference between
these two groups is simply how long those people held
on for. So the group of people who made money
(17:10):
in property, they on average hold their properties for somewhere
between nine to ten years. The people who have lost
money in property routinely hold their properties for somewhere between
one to three years. And so it is this time
heals all wounds mentality. Now, the uncomfortable and sad thing
in this story is that you did buy at the
(17:31):
top of the market, but you can't help that, no idea,
you didn't know. You love your apartment, you've got a
lowish mortgage, you're not struggling with cash flow. Obviously, one
option if you were finding those repayments to be quite tough.
One option you would have, because I can tell from
looking at you pretty young, it was potentially extend that
mortgage term out because you voluntarily said, hey, we're going
(17:54):
to do this in eight years, and you know that
can be a good thing to pay it off really
quickly if you've got the means to so. One option
that you might have if you did find yourself struggling
as interest rates have gone up from when you purchased,
it would just be to extend that out if you
needed to. But the main thing is going to be
hold on, And that is the thing that I'm saying
to a lot of investors at the moment. If you
(18:14):
bought at the top of the market and you've lost
a couple of hundred K because the properties have gone down,
there's only really one thing you can do, which is
to keep holding because if you sell now you kind
of book that loss. You know you have what we
in the investment circles called crystallized that loss because it's
now real, Whereas if you hold on over the next
ten years of that property doubles in value, you'll probably
(18:35):
make some money.
Speaker 3 (18:35):
Ah okay, I'll tell the wife when I get home.
She's not going to like the fact that I called
her the wife on the radio. Twenty five past four.
Will be back with Graham after this News Talks dB
Newstalks dB. It's the Weekend Collective with Jason Walls in
for Tim Beverage. Text says I have friends who have
investment properties and with the recent huge red raises to
insurance and rates and drops in rents, they can't even
(18:58):
break even looking at selling regards.
Speaker 2 (19:01):
Wayne.
Speaker 3 (19:01):
Thank you very much for that, Wayne, and keep those
texts coming in. Oh, eight hundred eighty ten eighty is
our number. If you've got some questions for Ed's and
we've got Graham on the line. Graham, how are you.
Speaker 4 (19:14):
Yes?
Speaker 1 (19:14):
Know? So?
Speaker 4 (19:15):
I just I just I just tuned in and I
don't even know the general's name.
Speaker 3 (19:19):
You're talking to Ed mcnat he's the resident economist at
Opez Partners, Rightbez, Sorry.
Speaker 4 (19:26):
I own I own a small commercial property in Wellington.
All right, now, the gentleman concerned says I should hold
my prices. I can't hold my prices because I've got
an idiot council who keeps putting the rates up. When
they're going up seven they put them up seventeen percent.
This year, they're going to put them up against a
(19:46):
fifty percent. And the Gentleman's right, we've got to stop.
But how do you stop the lakes of the council
from putting their prices up? So I put my price.
Speaker 3 (19:55):
It's a good question to ads. So what do we
do here? Does he just have to does Graham have
to just eat the increased costs in terms of the
rates increase or does he just say no, we've got
a but the prices up like everybody else mate, No,
not at all.
Speaker 2 (20:07):
Sorry, Graham, you might have just let me just clarify
what I did say when we was talking to my
friend Jason before, and he was saying with it that
his property has gone down in value. I was saying,
holding on is probably going to be one of the
better ways to make sure he doesn't lose money rather
than selling it a loss. Now, in terms of your
situation where you're having to put up your commercial rent.
(20:29):
I wasn't suggesting that you should just hold your rent
and don't be a greedy landlord or something along those lines.
In fact, if your commercial property's rent is below the
market value, then increasing it, I'd actually be totally for that, because,
as you've identified, some of your costs have gone up.
One thing that I'd just say, though, in terms of
whether you're a commercial property landlord or a residential property landlord,
(20:53):
is tenants don't really care what our costs are. That's
not really something they concern themselves with. What they are
concerned about is, well, what is the market rent. So,
for example, let's say that my costs as a residential
landlord go up by ten percent, Well, if the market
rent hasn't gone up by ten percent, I can't just
say to my tenant, well, bugger it, I'm putting up
(21:14):
by rent by ten percent, because that wouldn't fly. So
it's all about what's happening with the market rent as
opposed to what's happening with our costs. And your situation
is the property, the commercial property a little bit under
rented at the moment.
Speaker 4 (21:28):
Do you think I'm pretty hard to get tips, pretty
hard to get, pretty hard to get tenants. You know, yeah,
they will come back, but at this point in time,
and they want to quibble over over the rents. And
the problem is if you if you hold your rent
(21:50):
and you're losing money, you might as will not be
in business. Yeah.
Speaker 2 (21:54):
The difficulty there as well, and obviously you'd well know this, Graham,
if you've been a commercial landlord for a while as well,
is we've basically got to make a choice. Do we
want to meet the market, and sometimes that can mean
losing a little bit a bit of money, or do
we want to wait and try and get something a
bit better now. Obviously, if we wait and we have
no income coming in for a for a little while,
we're still paying all of those other costs. So we're
(22:16):
just going to make that choice. Do you think you'll
you'll kind of lower the rent and meet the market,
or do you think you hold out for somebody paying
a bit more.
Speaker 4 (22:24):
Well, I'm right in the middle of it now, but
it's it's it's pretty hard to sort of not put
it up. You know, I'm looking at sort of five
percents and maybe ten percents at the most, but it's
pretty hard and then you get then you get to
come back from the other way. We can't aboard it,
(22:45):
you know. So I'm between it. I'm between a rock
and a hard place whether to to hang on to
the tenant letting go? You know I do. I lose
money and suck it up. But I can only suck
it up for so long until the council start and.
Speaker 3 (23:04):
There'll be quite a few other people in your situation.
Grams or hold on and let us know how it goes. Oh,
eight hundred eighty ten eighty. If you have another question
for AD, we have a tax that's come through AD. Hello, there,
do you think insurance risks?
Speaker 2 (23:17):
Ie?
Speaker 3 (23:17):
Your house might be close to the border of a
flood zone and so insurance costs me skyrocket? Do you
think that the owner should sell?
Speaker 4 (23:25):
Now?
Speaker 2 (23:26):
Oh, that's a really interesting one. The main thing I'd
say about insurance is it's not just about whether you
are in a flood area or not. It also depends
on how your house is built. Let me give you
a really good example. So a lot of newer properties
today are built above the ground. In fact, if you
look at a lot of terrace housing, you'll often see
(23:46):
that those properties you've got to walk up a couple
of steps to get into them, because they might be
half a meter or a meter off the ground. The
whole reason they've been built that way is to mitigate
that flood risk. So if you've got a new RB property,
not necessarily a new build, but something built a bit
more recently, often that will have less flood risk than
a property that was built perhaps in the fifties and
(24:08):
is quite close to the ground. What we're seeing with
insurance companies now, and I will come back to answer
the question, but what we are seeing with insurance companies
is they are taking an address based approach, so they
have people walking down the streets and identifying, well, what
is the risk of individual properties. Whereas in the past
they might do it at a street level or a
suburb level, and you'd say, okay, what is the risk
(24:31):
of this suburb and then you would average out in
a way. The insurance premiums Now, it's now based on
what is the risk of your specific house, and if
your house is more likely to claim, then you were
going to pay a high premium. So coming back to
that question, it really comes back to what is the
risk of your individual house? If it is a new
(24:53):
er house, I'd say, well, maybe you're not so worried
about that because the property has been built off the ground.
If there is a flood, you've got a much smaller
chance of your house being affected. Because of that, you've
got a much smaller chance or you're less likely to claim,
and because of that, you're going to save on your premiums.
Compare that to if your house is built quite low
to the ground. Well, I'd say, okay, maybe it's a
(25:14):
bit more risky. I would just caution against over worrying
in the situation. If we think about how much your
insurance premiums going up, it might be something like another
twenty percent over the next year or the next couple
of years. We've seen insurance premiums go up quite a
lot over the last little bit. It's just whether that's
going to it's about how much is that going to
(25:34):
impact your personal cash flow. I would just remind people
as well that when you sell your house, you really
are taking a hit in terms of paying all of
those sale costs. I always ballpark at at about five
percent of whatever you sell your house for, because you've
got to pay your real estate agent, You've got to
pay your marketing, You've got to pay for taking the
nice photos that are going to go on one.
Speaker 3 (25:53):
Raging house as well.
Speaker 2 (25:55):
Yeah, there are so many costs and your lawyers, so
many costs associated with selling your house. Now, if your
house is worth five hundred thousand dollars and it's going
to cost you twenty five thousand dollars to to seal
your house, maybe you go, oh, that's actually quite a
lot of money compared to the extra eight hundred dollars
or five hundred dollars a year that I'm going to
pay on my insurance. So we've just got to put
everything into context.
Speaker 3 (26:16):
How long of insurance Compani's been doing this, had this
change between this broad stroke by the suburb or by
the street approach to risk rather than the individual house,
and how long has it been in when did it change?
Speaker 2 (26:29):
It's happening really recently, So I would say over the
last year. Over the last couple of years, we've been
knowing that it's coming. Over the last year we have
really seen it.
Speaker 1 (26:38):
Now.
Speaker 2 (26:39):
The other big change that we're seeing is most insurance companies,
or more insurance companies I should say, moving to what's
called a some insured approach. So rather than saying, okay,
we'll ensure your house for its replacement value, you now
choose what the value is and you say, cool, I'm
going to insure my house for one point two million
dollars or one million dollars or half a million or
(27:00):
whatever it happens to be, rather than just the replacement value.
So these two changes coming in, that does change things up.
Speaker 3 (27:06):
Yeah, curious. I hadn't heard of that before, and I
kind of just assumed that it was the sort of
the bulk approach to insurance. But it's good that they're
doing this because it is a reflection on the fact
that there is a lot more new builds happening in
various different parts of the country as well. And it
would be quite unfair, wouldn't it if you would you
had a house that you know would fare quite well
(27:26):
against the floods in somewhere that has been hit high before,
because you're disincentivez people by building houses in that area.
Speaker 2 (27:33):
And it also is a bit of a flag to buyers. Yeah,
so if you are going to go buy an older
house and we find that or you find that while
those insurance premiums are quite high, maybe that says something
about the risk of the area. It's really interesting the
diversity in terms of what people pay for insurance around
the country. I was really surprised when I moved to
(27:53):
Auckland how low my insurance was compared to some of
the properties that I own down in christ Church, where
my insurance is a bit higher. And in fact, you
well know because you live in Wellington, the insurance premiums
for some Wellington properties are exceptionally high. I actually saw
one investor who was paying around ten thousand dollars a
year for their insurance. It was very, very high. That
(28:13):
was through their body corporate because it was a very
risky building. So some people have will pay quite a
reasonable premium for their house insurance. Some people are paying
a lot of money.
Speaker 3 (28:24):
Yeah, we'll be back after this. We're going to talk
about foreign buyers, bans, News Talk z B the Weekend
Collective with Jason Walls.
Speaker 4 (28:31):
N You can see.
Speaker 3 (28:42):
News Talk zed by or with The Weekend Collective with
Jason Walls filling in for Tim Beverage this week here
with Ed mcnight's Economists Extraordinaire talking property, talking everything to
do with the market, mortgage rates, and we're going to
talk now about the foreign buyers ban. Now we know
that that is still in place. It was in play
before the election. The Nats wanted to bring to reverse
(29:04):
the feign buyers ban so they can tax the heck
out of a bunch of the wealthy foreigners coming into
New Zealand. It was a two million dollar cap I
think it was. You had to build, you had to
buy a house for at least two million dollars if
you wanted to get a buy the foreign buyers ban.
But Winston old Winston Raymond Peters wanted nothing of the sort.
He kaiboshed that one, and so the Nats had to
(29:27):
find their tax cuts revenues somewhere else, which they did
because we all got a tax cut ed. I did
see an article that was quite interesting. It said that
there are some rumors about this foreign buyers ban being reversed.
What have you seen this? Have you heard any rumors?
You have your ear to the ground.
Speaker 2 (29:44):
I personally haven't heard any Rumors's as just said, when
you see an article online that says, oh, rumors are swirling,
and you're like, I wonder who's coming up with these rumors.
But the ones that I have read is that the
foreign buyer ban may be relaxed for any properties that
are worth five million dollars plus rather than the two
million dollars that was proposed at the election. So I
wanted to dive into the the numbers and say, okay,
(30:06):
I wonder how many properties in New Zealand actually sell
for five milli or more, because those must be some really,
really nice properties.
Speaker 4 (30:14):
Now.
Speaker 2 (30:14):
The interesting thing when I first ran these numbers, when
the discussion was about a two million dollar cap, something
like three percent of properties in New Zealand sell for
two million dollars or more. In Auckland properties are more expensive,
so it's something like eight percent. So I re ran
my numbers today and only a minute percentage of properties
(30:36):
actually do sell for five milli or more. I mean,
throughout twenty twenty four, for the numbers that I have,
it was less than point one of a percent. It
was zero point zero eight percent. We're talking about very
small numbers, are under two hundred in total. If we're
thinking about the Auckland region, we've got those more expensive
house prices, it's half a percent. And only down in
(30:59):
Queenstown where house prices are really expensive. Do you get
any significant numbers. It was about two percent last year.
And then as I was driving here to talk to
you today, Jason, I was thinking, okay, let's say that
Nikola Willis and Christopher Luxen say yeah, we're going to
relax the foreign buyer ban five million dollars plus. I
was kind of thinking, well, I wonder what the reason
why is, Because they were suggesting they were going to
(31:22):
raise something along the lines of seven hundred and forty
million dollars through this proposal. And then you say, okay,
there's quite a decent amount of money for properties worth
two million dollars or more. Well, if you then say, well, no, no, no,
it's only for five million dollar properties. Plus, you cut
out about ninety percent of the properties that would be taxed,
and so then you say, well, maybe it's closer to
(31:44):
seventy four million dollars worth of revenue, and you say, okay,
maybe that's not worth it. Now, let's be clear that
won't be the exact number. Because even though ninety we
might cut out ninety percent of the properties that would
have been taxed under the proposal that National took to
the election, These properties that would be taxed under the
five million dollar cap, though they will be much higher value.
So you might not cut out all of that or
(32:07):
a massive percentage of that text, but it'd be pretty
large in my view.
Speaker 3 (32:10):
Yeah, you just look at it. You said, seventy four
million dollars. I mean, they're or thereabouts. It's pocket change
for a government. That's just not enough money for them
to actually I mean it's seventy four million for you
and I or everybody listening. Seventy four million dollars is
clearly a life changing amount of money, but when you're
dealing with the amount of money that the government is,
seventy four million dollars is not enough to move any
dials in a degree that makes any sort of difference
(32:32):
at all.
Speaker 2 (32:33):
And then I was thinking, as well, well, if Nicola
Willis does that, then brings in you know, let's sounds
one hundred and fifty million or even two hundred million dollars.
I was just thinking, is that enough to make up
for the political capital you've got to spend in order
to be able to do that? Now, maybe New Zealanders
don't care if properties that are worth five million dollars
(32:53):
or more get sold to foreign buyers, given that most
of us aren't buying those properties anyway. In fact, ninety
nine point nine percent of us are not buying those
properties at will give at least than point one of
a percent of properties in New zeal And self for
that five million dollars.
Speaker 3 (33:09):
Yeah, and I'll tell you what, seventy four million dollars
is just simply not enough money to get on the
bad side of Winston Peters. He came and he kiboshed
this idea from the NATS. I mean, I remember thinking
at the time when I was reporting on it seems
like a fair idea. You know, we need to change
the way that we look about foreign buyers because if
somebody is coming into New Zealand and they're a wealthy
(33:29):
high net worth individual, they're looking for wealthy high networth
individual houses. So we're taking away not just the house,
but the person's job. Winston saw all of these arguments
and decided, Nope, it's not going to have it. It's
not my political stripes. And so seventy four million dollars
is not enough money to go cap in hand to
Winston and say can we please change this? And I'll
(33:50):
tell you why. Nicola Willis, when she was at the
Half year Economic and Fiscal update before December, was asked
this very question and she gave me a very very
interesting answer. She said, we asked, you know, you're looking
for revenue. You've said that time and time again. You're
looking for revenue. The economy is not as good as
it was. You're missing a bunch of tax revenue. What
(34:10):
new taxes are you thinking of? And I think it
was I think unprompted or somebody asked her about their
foreign buyers bam, and she said, well, you know, we
are in a coalition agreement, a coalition where that has
been agreed, but you know there's new coalition agreements, there's
new terms and governments. It might be something we can
look at down the road. So she's clearly got it
in the back of her mind. Still, it's clearly something
(34:31):
that it's in the NAT's wheelhouse. They just need to
win Winston over.
Speaker 2 (34:34):
The other thing that I would anticipate that Nicola Willis
would look at is well, is the fifteen percent tanks
that we proposed at the election still appropriate? So I
was also thinking as I was driving here, because that's
where most of us.
Speaker 3 (34:48):
Sounds a productive drive, you had, well, that's what we
all do.
Speaker 2 (34:51):
Right, that's how thinking time in the car unless you've
got the kids in the back seat, you drop. I
was thinking, well, how could she get Winston over the line? Well,
maybe it's not a fifteen percent tax on the purchase price.
Maybe it's a twenty five percent or a twenty percent tank.
Maybe that's scratchet it way up. Maybe that's the other
lever that she can pull to bring in more tax
revenue so that we get that number up a bit.
(35:12):
And again it's probably going to be more than seventy
four million dollars just because those properties that do sell
are at a very very high amount. But you know,
it kind of gives you the scale of it.
Speaker 4 (35:23):
Yeah.
Speaker 3 (35:23):
Interesting. I mean you would have to think from a rich,
wealthy individual that's coming into New Zealand. How and I
always get the terminology wrong here. You're an economist, how
elastic or inelastic is that in terms of attacks on
a house? If it goes from fifteen to twenty would
that be enough to prevent you from coming in?
Speaker 4 (35:41):
Yeah?
Speaker 2 (35:41):
So what you're really asking is are people going to
pay it if you increase it from fifteen to twenty
five percent? Well, one thing that's really interesting is how
expensive other houses are. So often we talk in New
Zealand that our houses are expensive and they are relative
to our incomes. But if we look at some really
rich overseas countries, their houses are really expensive. So it's
(36:02):
quite interesting. I was over in Switzerland over the hool
of that. I was really lucky to go over there.
And of course whenever I go overseas or to another
town that's not Auckland, I do want most of us
to I look at the houses for sale in the
real estate and the real estate company's windows, and it
is amazing, like eyeboggling, how expensive houses are in places
(36:24):
like Switzerland and and parts of Germany, and even in
parts of China. You know, properties in Shanghai or Soul
in Korea, they can be incredibly expensive. So somebody could
sell an apartment and Soul come over here and with
the exchange rate and still buy a really, really nice house.
Because our properties to us are expensive, to some foreign
(36:46):
buyers from some countries, they can look relatively affordable.
Speaker 3 (36:49):
Yeah, interesting stuff and will be back after this news
talk ZBI the.
Speaker 1 (36:55):
One roofed Property of the Week on the weekend.
Speaker 3 (36:58):
Collective Ladies and Gentlemen start your end. No, don't start
your engines. The property of the week this week is
down in Warnaca, forty Riversley Road. Now, this is a
beautiful five bedroom, three bathroom, two car garage.
Speaker 4 (37:16):
It was.
Speaker 3 (37:16):
It's the house itself three hundred and fifty five square meters,
the land is one thousand, four hundred and nineteen square meters.
It goes to auction on the February the twentieth estimated
just a cool two point ninety three million, the low
two point four nine, the high three point three seven,
with an RV of two point two six. I can
(37:38):
see myself living in this place. It's got this beautiful pool.
The sunset views are amazing. That's got this giant, giant
kitchen island.
Speaker 2 (37:47):
What do you think The amazing thing about Warnica is
it's not necessarily about the house. That's not why you
move there. You move there because when you look at it,
the hills and the mountains and they're absolutely golden. That's
the sort of place you want to be. The really
interesting thing about this house, and I'd suggest people go
have a look at this song one roof forty Riversley Road.
We said it was is a really good place for
(38:09):
people who want to go as a holiday home. And
I'll tell you the reason why. If you look at
the floor plan, what you want if you're going to
buy an expensive holiday home is you want enough space
for all of your friends to come. And what you
often see in architectural houses like this is you'll have
one large master bedroom which is exactly what you've got.
(38:30):
It's got a huge on suite, and then what you
often see is there will be a number of other
bedrooms that are all exactly the same, all identical. And
that's really good because then if you have a couple
of friends over who are all couples to stay, if
you've got three million dollars to spend on ours, then
they don't get jealous of each other. It's all the same,
so it's really good. And you actually see that with
(38:51):
this house. You have another bedroom that's got an on suite,
and you've got three bedrooms that are all identical, so
really really good rooms for kids and also for guests.
So if you do happen to have a cool three
million dollars, this is probably quite good shopping, I would
have thought. With amazing views of those mountains and and
just the best place to have guests over for those holidays,
(39:11):
which I'm sure we're all thinking about now that we're
just coming back to work.
Speaker 3 (39:15):
I'll tell you what. It's also got a dedicated kids
media room, which sounds incredible.
Speaker 2 (39:19):
Well, of course, one of the main things you want
to do when you go away on holidays. No, we
don't want any of that family time, Chuck, the kids
all go off into the media where you're Sally and
Tim go into the kids media room. We're off having
our rose wine out on the deck as adult time.
So check it out. That's forty riversly road on one roof.
Speaker 3 (39:39):
Yeah, I mean probably you could do some great barbecuing
out there. In the break you were telling me about
your charcoal barbecue. Do you think you can get some
good charcoal barbecuing done out there?
Speaker 4 (39:47):
Oh?
Speaker 2 (39:47):
Well, that's the amazing thing. When you buy a house,
you've really got to look at the channels. Because what
I was able to school when I just bought my
house was this. I think it's probably worth about two
or three grand, this massive charcoal barbecue, which I'm pretty
sure the previous owners just couldn't be bothered moving. So
we got that. So I was very happy so after this,
I'm going to go and I've bought my charcoal. I'm
gonna go fire that up for the first time. Because
(40:08):
young guys in their thirties, my understanding is you make
one of three things your personality's way.
Speaker 3 (40:14):
Where you're going to say, barbecuing, golf or running.
Speaker 2 (40:19):
That's pretty close. Yeah, exercise and meat or alcohol is
one of the other ones, and golf. So maybe I'll
see if we can make meat part of my personality
and my soluberity.
Speaker 3 (40:28):
I mean, it sounds like you've got some pretty good
things on the menu.
Speaker 1 (40:30):
Ed.
Speaker 3 (40:31):
Thank you so much for joining us. It's been a
fantastic hour. We got the Parenting Hour coming up. Next,
the Parenting Squad will return to News Talk z B.
It's just about five o'clock.
Speaker 1 (41:01):
For more from the weekend collective, listen live to News
Talk zed B we Care from three pm, or follow
the podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks EDB.
Speaker 2 (00:12):
Sound a scratch up ticket by two twelve PA tagging
gas weird still time, let's see us wrong?
Speaker 3 (00:22):
News Talk zed B. You're with the Weekend Collective Jason
Walls in for Tim Beveridge, who's away this week, and
we've got the one roof radio show, The Rundown with
Ed McKnight, resident economists at ope's partners.
Speaker 1 (00:36):
Ed.
Speaker 2 (00:36):
How are you doing, Jackson? I'm so excited to be
talking to you today.
Speaker 3 (00:39):
Yeah, I'm excited to be talking to you about some property,
some housing. How good?
Speaker 4 (00:43):
Yeah.
Speaker 3 (00:43):
I want to start with this because a ASB has
cut its eighteen month fixed term loan rate to five
point thirty nine, following cuts by Westpac and by B
and Z. Now all three of these banks six months
rates are now at five point nine to nine percent
as they fight to be the bank of choice for mortgages.
And this comes alongside rumors apparently of a foreign Buyers
(01:04):
band reversal, with experts saying it could work, but the
rules would need to be a little bit more flexible.
So we got we're going to be taking your calls
this afternoon. So oh, eight hundred and ten eighty. If
you got a question for Ed, probably a question for
Ed rather than me, because he's the expert. I'm just
the guy that I'm just the loud mouth with the questions.
But before we get some calls from listen, I'm curious,
from your perspective, what's the reason behind these cuts that
(01:27):
we're seeing in bank interest rates.
Speaker 2 (01:29):
Well, it's quite funny because I was over in Europe
in the holidays, and midway through I thought, do you
know what, I'm going to log on and see what's
happening with the interest rates, And one thing I was
very surprised about is that the wholesale interest rates, So
just think of this as what it costs the bank
to borrow money and then lend it to people like
you and me. That went down by about zero point
(01:50):
two five percent over the break, and I was like, oh,
that's very interesting. So it's not surprising that we then
see ASB making a small cunt, you know, zero point
two percent off their one year rate. Now, I think
ASP have been pretty clever move so early in the
year because they are the first bank to make any
meaningful cut. In twenty twenty five, Westpac did get just
(02:14):
ahead of them the day before on the seventeenth, they
cut their six month rate, as you'd said, but HAYSB
went a little bit further, cutting their one year rate
and their eighteen month as well. So now ASB are
the kind of leaders in the market as far as
I'm concerned, at five point three nine percent for the
eighteen month rate, five point five nine for that one
year rate as well.
Speaker 3 (02:34):
Interesting that you were talking about the Europeans and so
this is this cut more based on what's happening overseas
rather than in the New Zealand market because the Reserve
Bank haven't moved that yet their interest rates that obviosly
our call is on February nineteenth, So is this is
this more based on what's happening overseas rather than in
the New Zealand market.
Speaker 2 (02:51):
I think it's mainly what's happening with what it costs
the banks to borrow money and lend it out. Now
that that's related to a whole heap of things. One
of the main things that is impacted by that is
what people think the Reserve Bank is going to do,
and what you often see is that banks will anticipate
and the markets will anticipate what is the Reserve Bank
going to do, and then they move beforehand. Now, one
(03:14):
interesting thing is the Reserve Bank Governor Adrian or when
he last made his press conference cutting the ocr by
half a percent, he said, you know what I think
we're going to do next time. I think we'll probably
do another half a percent. So there's probably some anticipation
of that going on. I expect that many of the
other banks will probably follow asb's lead in terms of
(03:35):
trimming some of their rates early in January. The one
thing that I just really cautioned borrowers out there is
I don't think we're going to see a repeat of
what we saw in twenty twenty four happening this year.
Speaker 3 (03:49):
In terms of rate cut after rate cut after ratecut.
Speaker 2 (03:51):
There were huge, huge discounts happening or drops happening in
interest rates last year, and I think people have forgotten that.
At the start of twenty twenty four, asb's one year
interest rate was seven point four percent. Okay, fine, it
was seven point three nine percent, but basically seven point
four percent, And what we saw throughout the last twelve
(04:12):
months is a drop of I think it was about
one point eight percent. We've basically gone from seven point
four down to five point six ish. Now we're not
going to see another one point eight percent cut again
in twenty twenty five.
Speaker 3 (04:26):
Are you talking about mortgage rates or from the OCR
where we're not going to see another one point five
basis points cuts from one point five percent cut from
the Reserve Bank or are you talking mortgage I'm talking
mortgage registrates in that case. Now, if we're talking really
about the OCR, we're sitting at four point two five percent,
the kind of terminal rate of how low are we
going to go? Most banks are saying somewhere between three
(04:48):
percent and two point seven five percent.
Speaker 2 (04:51):
So again, what have we seen? We've seen. We peaked
the OCR at five point five percent. We've chopped off
that matte bloody math has not gone too well. We've
dropped off one point two five percent. Are we going
to see that again? We probably will see another one
point two five percent off the OCR very slowly. Won't
(05:11):
all happen in twenty twenty five? In my view, I
think we'll probably see the last few cuts happening into
twenty twenty six. But in terms of the mortgage interest rates,
which is what we will care about when we're when
we're fixing our loans, and I know that. I think
you said you'd recently, over the last couple of years
picked up a loan, so we won't dig into that.
I don't think we're going to see another one point
eight percent cut off that one year rate which most
(05:32):
of us fix in. For my pick is we're going
to end.
Speaker 3 (05:36):
Low fives low fives, because I did see an article
in the Herald that said mortgage holders are bracing for
a rate in the fours. You just don't think we're
going to get there.
Speaker 2 (05:45):
You might get to high fours. I mean, you'll never
say never, but we're not going back to four percent.
From my view, I don't think we're going to see
another four percent for many, many, many years.
Speaker 4 (05:55):
Yeah.
Speaker 3 (05:55):
Do you know what I was thinking the other day
at is how in America you can lock in your
interest rate for thirty years. And imagine if you bought
in the days when interest rates were zero point twenty
five or something like that, you'd be you'd be making
money handle a fist.
Speaker 2 (06:09):
Essentially, you'd be really happy. Or even there are people
who fixed for five years at two point nine nine percent,
and those people who were smart enough to do that.
And let me be clear, I wasn't one of those people. No,
because back at that time, the talk out of most
economists was that interest rates through interest rates were going
(06:29):
to be low for a very very long time, and
that two point nine nine percent, well, in the context
of what economists thought at the time, Wow, maybe it
wasn't that great. Now, there were some people who were
much smarter than me, like Tony Alexander, another economists who
was telling everybody to fax at two point nine nine
for those five years, and.
Speaker 3 (06:47):
He was right, Yeah, geez, two point nine nine I
met six point nine nine. At the moment, we're coming
up for renewal soon. And the thing is we are
February fourteenth. The Reserve Bank's decision is on the nineteenth.
So can I ask you just from my own perspective here,
can I float for just a week and then the
next week when I get an indication about what the
(07:09):
Reserve Bank's doing, then I can start up making some decisions.
Is that a good perspective? Is that something smart to do?
Speaker 2 (07:14):
Yeah, that's something that quite a few borrowers decide to do. Now,
there is a little caution about this The good thing
about your situation is you've only got a very short
period of time between when your mortgage interstraight comes off
and when the Reserve Bank makes their decision. So if
I was a mortgage advisor, which I'm not, a legitimate
piece of advice to somebody in that situation might be yeah,
(07:36):
float for a week, and a number of our clients
and Open's partners do that. Now, I've seen other people
borrowers who are saying, well, you know it's early January,
the next ocer cat's coming in mid maybe I'll float
for six weeks or so. To that, I'd be like, well,
six weeks on floating is actually a very very long time, yeah,
(07:56):
because you're paying over an extra percent per year more
just to be on floating. And so that's sometimes where
the numbers may not make sense. The other thing in
that situation, some borrowers can get quite disappointed when the
OCR makes a cut, but the banks don't drop or
don't pass on that full OCR cut. So there might
(08:17):
be a half a percent cut in the OCR, and
you might get point two percent off the one year rate,
something along those lines, And some borrowers might say, hey, well,
I've just been paying quite a lot of money on floating.
Maybe that didn't quite make as much sense as they thought.
What's really important to recognize is we are past the
point where a half a percent cut in the OCR
(08:37):
gets passed on to a half a percent cut in
a mortgage interest rate. Again, if I take you back
to early to mid twenty twenty four, Adrian or just
had to make a sounding like he was maybe going
to cut the rate, and you would see the wholesale
markets really drop quite quickly, and I'd say, great, we're
going to have lower interest rates. We're going to see
a lower OCR. Let's pass that on or bet on
(09:00):
it right now. And so you would see the banks
cutting their rates even though the OCR wasn't even moving.
Now we're past that point of anticipation and you see
a half a percent cut in the OCR, and you
might see a point two percent cut off your mortgage
interest rates. So people just need to bear in mind
or temper their expectations about how far are we going
(09:22):
to see those interest rates continue to fall?
Speaker 3 (09:23):
And when it comes to those OCR cuts and these
OCR statements, I mean, it's not even about the cut
these days, it's about what happens next. Where the indication
is where things are going. So if you look, if
you put your Economs hat on, it's been on this
whole time, by the way, but to keep it on
while I ask you, what do you think his forward
looking projections are going to be if he's been hinting
at these fifty basis points cuts. At one point, there's
(09:45):
even some questions about us seventy five basis point cuts.
What happens next in Adrianaor's mind when he's looking out
into twenty twenty five after this February nineteenth.
Speaker 2 (09:55):
That's a good question. So if I imagine we're Adrian
Aura's right now, I believe he's got a holiday home
somewhere in the Lower North Island, probably not the santin news.
Speaker 3 (10:03):
Talk or AE you're listening, Oh, eight hundred eighty ten eighty,
we'd love to have you on the show.
Speaker 2 (10:08):
That's nothing bad about news talks, he'db it's more like
he's probably not listening to me. But if as Adrian
all right now, or Karen Silka, the Deputy Reserve Bank
Governor or assistant can't remember, they should be pretty comfortable
at the moment because they're going to be looking at
how is the economy evolving? And I think it is
probably evolving along their expectations. They are seeing some negative
(10:32):
things happening at the moment. Unemployment has increased to four
point eight percent, it is expected to continue to increase.
And what they need to be comfortable about comfortable about
is that inflation is coming down. So what do they
want to see. They want to see businesses not raising
their prices. They want to see businesses saying, hey, we're
(10:52):
struggling for a lack of customers. At the moment, we've
got a bit of what we call us economists called
productive of capacity, i e. We've got enough staff and
we've got enough stuff that we could make more goods
or we could provide more services if we needed to.
And so we're not going to increase our prices. And
so even though there is some negative things happening in
the economy at the moment, I would say that's probably
(11:15):
what the Reserve Bank is looking for, because they want
to make sure that businesses don't think that times are
so good that they're going to keep increasing their prices.
Because what does the Reserve Bank want to do. We've
got inflation within that target band of one to three percent.
Think it was two point two percent last time. Next
time the data gets released, they're going to be wanting
to make sure that it is still anchored at that
(11:36):
two percent.
Speaker 3 (11:37):
Now, walk me through why infletion comes back to mortgage rates.
Speaker 2 (11:41):
Well, inflation is the main thing that the Reserve Bank
is targeting, right, because inflation is good for nobody. We
call it. Us economists called it a thief in your
back pocket because if you've got one hundred dollars in
your bank account, well, in a year's time, that one
hundred dollars isn't going to buy the same amount of
stuff that it can. Today, we always think about a
(12:02):
packet of lollies like a two dollar mixed. Well, blind
me back back in my day, when I was kicking
my day, the two dollar mixture was only a dollar,
and well, back I always think of it as volume
as well. Back in the early nineties, two dollar banks yr. Gosh,
that'll get you a whole heap of stuff. Now I haven't,
I must, I haven't been to a dairy recently in
order to two dollar mixt year. But I bet you
(12:24):
you don't get as many logs for your money's in
there it's a rip off that and so what the
Reserve Bank whats to make sure is that we've got
low and stable inflation between one to three percent, targeting
that two percent. Now, what can the Reserve Bank do
to stop inflation going up? They can hike up interstrates
because when interest rates are high, that does two things.
(12:44):
It stops us borrowing to spend, which means people spend less.
And then on top of that, it also encourages people
to save because you get a better return on your money.
And so the way that interest rates are linked is
that that is the Reserve Bank's main tool to stop inflation.
Speaker 3 (12:59):
Interesting, and you did mention employment there as well. They
don't actually technically have to worry about that anymore because
the government kibosh that mat Yeah.
Speaker 2 (13:05):
So that was part of the d date they were
targeting maximum sustainable employment. And I guess what the government
was trying to do with that change is they didn't
want the Reserve Bank to have two competing mandates. Now,
I must have been at that specific time there wasn't
really that much of a trade off between those two mandates.
(13:28):
But I think it's probably a good thing that we've
just got the Reserve Bank sole focus on. It's one
thing inflation, because inflation is nobody's friend.
Speaker 3 (13:35):
Yeah, and it's back down within that within that that
band as well. And we've got inflation numbers out leader
this week.
Speaker 4 (13:43):
Is it.
Speaker 3 (13:45):
That's news? I think it is that. That's from our newsroom,
So we will keep we will keep you across that
when it comes interested in is now the time to
sell or buy it? It really does come back to
this when we're talking about property. Is now the time
to sell? Is now the time to buy? Or should
we just be waiting to see what the market looks like.
Speaker 2 (14:02):
It's quite funny because at the end of of twenty
twenty four I wrote two articles for one ROOF. I
wrote the seven reasons why I thought it was the
right time to buy my first house, not my first
property that I am because I've been investing in property
for a while, but the first house that I would
ever live in. And I wrote the seven reasons why
now was the time to buy? And then the following
week I wrote the six reasons why it was not
(14:24):
the right time to buy a house. And depending on
what you think, you will either agree with one or
not the other.
Speaker 3 (14:30):
Right seven and one was sex, so there's a clear winner.
Speaker 2 (14:33):
Well, in the end, I decided to buy a house,
and I'll tell you the reason why, specifically as an
owner occupier, is that I could see interest rates coming
down and we've seen quite large drops. That does two
things to me. That tells me a it's more affordable
to buy a house than it was a year ago
in terms of being able to afford the mortgage. The
second thing that also means is I believe that we
(14:53):
probably will see some house price growth in twenty twenty five,
and so perhaps it will be slightly cheaper to be
able to buy the house today compared to or back
in December, compared to what it would be in six
months time. I mean there are some other changes as well.
Speaker 3 (15:06):
Yeah, I'll tell you what we bought in twenty twenty one,
and we bought off the plans and so it's a
beautiful wee apartment. It's tiny, it's less than the size
of this room. Doesn't help the listeners at home. It's
about forty eight square meters.
Speaker 2 (15:18):
We love it.
Speaker 3 (15:18):
It's beautiful. But since then prices have gone down quite significantly,
and so we're sitting in a perspective where you know,
we could be the first people in New Zealand's history
to lose money on property, and it does get It
kind of gets you. So what would be your advice
to somebody like myself and my wife. We've got an
eight year mortgage, so we're trying to pay it off
as quickly as possible, but we're really worried about the
(15:39):
fact that it's just way worth, way less than.
Speaker 2 (15:42):
When we bought it. Yeah, your mortgage is quite quite
short at eight years. Was there a specific reason behind that.
Speaker 3 (15:48):
We looked at how much we'd be paying back in
interest and it just scared the Jesus out of us,
and we thought that we just you know, it's the
weekly payments aren't crippling. It's about eleven hundred dollars a week,
so and it's quite a small place. We had a
pretty sizable deposit because we saved up for a long time.
Speaker 2 (16:05):
And it's an investment property. Now you still go to
where we live there. Oh cool. Now, a couple of
things that I'm picking up there. The first thing that
I'd say is you wouldn't be the first person to
lose money and real estate in New Zealand. We've always
got to remember that it is not always a you
can never lose money and money and property. You absolutely can.
Most people do tend to make money over time, though,
(16:27):
and the reason they make money is that they hold on.
And so the first and uncomfortable and maybe quite obvious
thing that I'd like to point out is you need
to hold on as the main thing. And in fact,
cool Logic do some really good analysis where they group
people into two buckets. First, we've got the bucket of
(16:48):
people who made money sold their property and made money
through the property's value going up, so they sold more
for than they bought it. And then they've got this
other bucket of people who were the opposite. They sold
their property and they sold it for a price less
than they bought it for. Now, the major difference between
these two groups is simply how long those people held
on for. So the group of people who made money
(17:10):
in property, they on average hold their properties for somewhere
between nine to ten years. The people who have lost
money in property routinely hold their properties for somewhere between
one to three years. And so it is this time
heals all wounds mentality. Now, the uncomfortable and sad thing
in this story is that you did buy at the
(17:31):
top of the market, but you can't help that, no idea,
you didn't know. You love your apartment, you've got a
lowish mortgage, you're not struggling with cash flow. Obviously, one
option if you were finding those repayments to be quite tough.
One option you would have, because I can tell from
looking at you pretty young, it was potentially extend that
mortgage term out because you voluntarily said, hey, we're going
(17:54):
to do this in eight years, and you know that
can be a good thing to pay it off really
quickly if you've got the means to so. One option
that you might have if you did find yourself struggling
as interest rates have gone up from when you purchased,
it would just be to extend that out if you
needed to. But the main thing is going to be
hold on, And that is the thing that I'm saying
to a lot of investors at the moment. If you
(18:14):
bought at the top of the market and you've lost
a couple of hundred K because the properties have gone down,
there's only really one thing you can do, which is
to keep holding because if you sell now you kind
of book that loss. You know you have what we
in the investment circles called crystallized that loss because it's
now real, Whereas if you hold on over the next
ten years of that property doubles in value, you'll probably
(18:35):
make some money.
Speaker 3 (18:35):
Ah okay, I'll tell the wife when I get home.
She's not going to like the fact that I called
her the wife on the radio. Twenty five past four.
Will be back with Graham after this News Talks dB
Newstalks dB. It's the Weekend Collective with Jason Walls in
for Tim Beverage. Text says I have friends who have
investment properties and with the recent huge red raises to
insurance and rates and drops in rents, they can't even
(18:58):
break even looking at selling regards.
Speaker 2 (19:01):
Wayne.
Speaker 3 (19:01):
Thank you very much for that, Wayne, and keep those
texts coming in. Oh, eight hundred eighty ten eighty is
our number. If you've got some questions for Ed's and
we've got Graham on the line. Graham, how are you.
Speaker 4 (19:14):
Yes?
Speaker 1 (19:14):
Know? So?
Speaker 4 (19:15):
I just I just I just tuned in and I
don't even know the general's name.
Speaker 3 (19:19):
You're talking to Ed mcnat he's the resident economist at
Opez Partners, Rightbez, Sorry.
Speaker 4 (19:26):
I own I own a small commercial property in Wellington.
All right, now, the gentleman concerned says I should hold
my prices. I can't hold my prices because I've got
an idiot council who keeps putting the rates up. When
they're going up seven they put them up seventeen percent.
This year, they're going to put them up against a
(19:46):
fifty percent. And the Gentleman's right, we've got to stop.
But how do you stop the lakes of the council
from putting their prices up? So I put my price.
Speaker 3 (19:55):
It's a good question to ads. So what do we
do here? Does he just have to does Graham have
to just eat the increased costs in terms of the
rates increase or does he just say no, we've got
a but the prices up like everybody else mate, No,
not at all.
Speaker 2 (20:07):
Sorry, Graham, you might have just let me just clarify
what I did say when we was talking to my
friend Jason before, and he was saying with it that
his property has gone down in value. I was saying,
holding on is probably going to be one of the
better ways to make sure he doesn't lose money rather
than selling it a loss. Now, in terms of your
situation where you're having to put up your commercial rent.
(20:29):
I wasn't suggesting that you should just hold your rent
and don't be a greedy landlord or something along those lines.
In fact, if your commercial property's rent is below the
market value, then increasing it, I'd actually be totally for that, because,
as you've identified, some of your costs have gone up.
One thing that I'd just say, though, in terms of
whether you're a commercial property landlord or a residential property landlord,
(20:53):
is tenants don't really care what our costs are. That's
not really something they concern themselves with. What they are
concerned about is, well, what is the market rent. So,
for example, let's say that my costs as a residential
landlord go up by ten percent, Well, if the market
rent hasn't gone up by ten percent, I can't just
say to my tenant, well, bugger it, I'm putting up
(21:14):
by rent by ten percent, because that wouldn't fly. So
it's all about what's happening with the market rent as
opposed to what's happening with our costs. And your situation
is the property, the commercial property a little bit under
rented at the moment.
Speaker 4 (21:28):
Do you think I'm pretty hard to get tips, pretty
hard to get, pretty hard to get tenants. You know, yeah,
they will come back, but at this point in time,
and they want to quibble over over the rents. And
the problem is if you if you hold your rent
(21:50):
and you're losing money, you might as will not be
in business. Yeah.
Speaker 2 (21:54):
The difficulty there as well, and obviously you'd well know this, Graham,
if you've been a commercial landlord for a while as well,
is we've basically got to make a choice. Do we
want to meet the market, and sometimes that can mean
losing a little bit a bit of money, or do
we want to wait and try and get something a
bit better now. Obviously, if we wait and we have
no income coming in for a for a little while,
we're still paying all of those other costs. So we're
(22:16):
just going to make that choice. Do you think you'll
you'll kind of lower the rent and meet the market,
or do you think you hold out for somebody paying
a bit more.
Speaker 4 (22:24):
Well, I'm right in the middle of it now, but
it's it's it's pretty hard to sort of not put
it up. You know, I'm looking at sort of five
percents and maybe ten percents at the most, but it's
pretty hard and then you get then you get to
come back from the other way. We can't aboard it,
(22:45):
you know. So I'm between it. I'm between a rock
and a hard place whether to to hang on to
the tenant letting go? You know I do. I lose
money and suck it up. But I can only suck
it up for so long until the council start and.
Speaker 3 (23:04):
There'll be quite a few other people in your situation.
Grams or hold on and let us know how it goes. Oh,
eight hundred eighty ten eighty. If you have another question
for AD, we have a tax that's come through AD. Hello, there,
do you think insurance risks?
Speaker 2 (23:17):
Ie?
Speaker 3 (23:17):
Your house might be close to the border of a
flood zone and so insurance costs me skyrocket? Do you
think that the owner should sell?
Speaker 4 (23:25):
Now?
Speaker 2 (23:26):
Oh, that's a really interesting one. The main thing I'd
say about insurance is it's not just about whether you
are in a flood area or not. It also depends
on how your house is built. Let me give you
a really good example. So a lot of newer properties
today are built above the ground. In fact, if you
look at a lot of terrace housing, you'll often see
(23:46):
that those properties you've got to walk up a couple
of steps to get into them, because they might be
half a meter or a meter off the ground. The
whole reason they've been built that way is to mitigate
that flood risk. So if you've got a new RB property,
not necessarily a new build, but something built a bit
more recently, often that will have less flood risk than
a property that was built perhaps in the fifties and
(24:08):
is quite close to the ground. What we're seeing with
insurance companies now, and I will come back to answer
the question, but what we are seeing with insurance companies
is they are taking an address based approach, so they
have people walking down the streets and identifying, well, what
is the risk of individual properties. Whereas in the past
they might do it at a street level or a
suburb level, and you'd say, okay, what is the risk
(24:31):
of this suburb and then you would average out in
a way. The insurance premiums Now, it's now based on
what is the risk of your specific house, and if
your house is more likely to claim, then you were
going to pay a high premium. So coming back to
that question, it really comes back to what is the
risk of your individual house? If it is a new
(24:53):
er house, I'd say, well, maybe you're not so worried
about that because the property has been built off the ground.
If there is a flood, you've got a much smaller
chance of your house being affected. Because of that, you've
got a much smaller chance or you're less likely to claim,
and because of that, you're going to save on your premiums.
Compare that to if your house is built quite low
to the ground. Well, I'd say, okay, maybe it's a
(25:14):
bit more risky. I would just caution against over worrying
in the situation. If we think about how much your
insurance premiums going up, it might be something like another
twenty percent over the next year or the next couple
of years. We've seen insurance premiums go up quite a
lot over the last little bit. It's just whether that's
going to it's about how much is that going to
(25:34):
impact your personal cash flow. I would just remind people
as well that when you sell your house, you really
are taking a hit in terms of paying all of
those sale costs. I always ballpark at at about five
percent of whatever you sell your house for, because you've
got to pay your real estate agent, You've got to
pay your marketing, You've got to pay for taking the
nice photos that are going to go on one.
Speaker 3 (25:53):
Raging house as well.
Speaker 2 (25:55):
Yeah, there are so many costs and your lawyers, so
many costs associated with selling your house. Now, if your
house is worth five hundred thousand dollars and it's going
to cost you twenty five thousand dollars to to seal
your house, maybe you go, oh, that's actually quite a
lot of money compared to the extra eight hundred dollars
or five hundred dollars a year that I'm going to
pay on my insurance. So we've just got to put
everything into context.
Speaker 3 (26:16):
How long of insurance Compani's been doing this, had this
change between this broad stroke by the suburb or by
the street approach to risk rather than the individual house,
and how long has it been in when did it change?
Speaker 2 (26:29):
It's happening really recently, So I would say over the
last year. Over the last couple of years, we've been
knowing that it's coming. Over the last year we have
really seen it.
Speaker 1 (26:38):
Now.
Speaker 2 (26:39):
The other big change that we're seeing is most insurance companies,
or more insurance companies I should say, moving to what's
called a some insured approach. So rather than saying, okay,
we'll ensure your house for its replacement value, you now
choose what the value is and you say, cool, I'm
going to insure my house for one point two million
dollars or one million dollars or half a million or
(27:00):
whatever it happens to be, rather than just the replacement value.
So these two changes coming in, that does change things up.
Speaker 3 (27:06):
Yeah, curious. I hadn't heard of that before, and I
kind of just assumed that it was the sort of
the bulk approach to insurance. But it's good that they're
doing this because it is a reflection on the fact
that there is a lot more new builds happening in
various different parts of the country as well. And it
would be quite unfair, wouldn't it if you would you
had a house that you know would fare quite well
(27:26):
against the floods in somewhere that has been hit high before,
because you're disincentivez people by building houses in that area.
Speaker 2 (27:33):
And it also is a bit of a flag to buyers. Yeah,
so if you are going to go buy an older
house and we find that or you find that while
those insurance premiums are quite high, maybe that says something
about the risk of the area. It's really interesting the
diversity in terms of what people pay for insurance around
the country. I was really surprised when I moved to
(27:53):
Auckland how low my insurance was compared to some of
the properties that I own down in christ Church, where
my insurance is a bit higher. And in fact, you
well know because you live in Wellington, the insurance premiums
for some Wellington properties are exceptionally high. I actually saw
one investor who was paying around ten thousand dollars a
year for their insurance. It was very, very high. That
(28:13):
was through their body corporate because it was a very
risky building. So some people have will pay quite a
reasonable premium for their house insurance. Some people are paying
a lot of money.
Speaker 3 (28:24):
Yeah, we'll be back after this. We're going to talk
about foreign buyers, bans, News Talk z B the Weekend
Collective with Jason Walls.
Speaker 4 (28:31):
N You can see.
Speaker 3 (28:42):
News Talk zed by or with The Weekend Collective with
Jason Walls filling in for Tim Beverage this week here
with Ed mcnight's Economists Extraordinaire talking property, talking everything to
do with the market, mortgage rates, and we're going to
talk now about the foreign buyers ban. Now we know
that that is still in place. It was in play
before the election. The Nats wanted to bring to reverse
(29:04):
the feign buyers ban so they can tax the heck
out of a bunch of the wealthy foreigners coming into
New Zealand. It was a two million dollar cap I
think it was. You had to build, you had to
buy a house for at least two million dollars if
you wanted to get a buy the foreign buyers ban.
But Winston old Winston Raymond Peters wanted nothing of the sort.
He kaiboshed that one, and so the Nats had to
(29:27):
find their tax cuts revenues somewhere else, which they did
because we all got a tax cut ed. I did
see an article that was quite interesting. It said that
there are some rumors about this foreign buyers ban being reversed.
What have you seen this? Have you heard any rumors?
You have your ear to the ground.
Speaker 2 (29:44):
I personally haven't heard any Rumors's as just said, when
you see an article online that says, oh, rumors are swirling,
and you're like, I wonder who's coming up with these rumors.
But the ones that I have read is that the
foreign buyer ban may be relaxed for any properties that
are worth five million dollars plus rather than the two
million dollars that was proposed at the election. So I
wanted to dive into the the numbers and say, okay,
(30:06):
I wonder how many properties in New Zealand actually sell
for five milli or more, because those must be some really,
really nice properties.
Speaker 4 (30:14):
Now.
Speaker 2 (30:14):
The interesting thing when I first ran these numbers, when
the discussion was about a two million dollar cap, something
like three percent of properties in New Zealand sell for
two million dollars or more. In Auckland properties are more expensive,
so it's something like eight percent. So I re ran
my numbers today and only a minute percentage of properties
(30:36):
actually do sell for five milli or more. I mean,
throughout twenty twenty four, for the numbers that I have,
it was less than point one of a percent. It
was zero point zero eight percent. We're talking about very
small numbers, are under two hundred in total. If we're
thinking about the Auckland region, we've got those more expensive
house prices, it's half a percent. And only down in
(30:59):
Queenstown where house prices are really expensive. Do you get
any significant numbers. It was about two percent last year.
And then as I was driving here to talk to
you today, Jason, I was thinking, okay, let's say that
Nikola Willis and Christopher Luxen say yeah, we're going to
relax the foreign buyer ban five million dollars plus. I
was kind of thinking, well, I wonder what the reason
why is, Because they were suggesting they were going to
(31:22):
raise something along the lines of seven hundred and forty
million dollars through this proposal. And then you say, okay,
there's quite a decent amount of money for properties worth
two million dollars or more. Well, if you then say, well, no, no, no,
it's only for five million dollar properties. Plus, you cut
out about ninety percent of the properties that would be taxed,
and so then you say, well, maybe it's closer to
(31:44):
seventy four million dollars worth of revenue, and you say, okay,
maybe that's not worth it. Now, let's be clear that
won't be the exact number. Because even though ninety we
might cut out ninety percent of the properties that would
have been taxed under the proposal that National took to
the election, These properties that would be taxed under the
five million dollar cap, though they will be much higher value.
So you might not cut out all of that or
(32:07):
a massive percentage of that text, but it'd be pretty
large in my view.
Speaker 3 (32:10):
Yeah, you just look at it. You said, seventy four
million dollars. I mean, they're or thereabouts. It's pocket change
for a government. That's just not enough money for them
to actually I mean it's seventy four million for you
and I or everybody listening. Seventy four million dollars is
clearly a life changing amount of money, but when you're
dealing with the amount of money that the government is,
seventy four million dollars is not enough to move any
dials in a degree that makes any sort of difference
(32:32):
at all.
Speaker 2 (32:33):
And then I was thinking, as well, well, if Nicola
Willis does that, then brings in you know, let's sounds
one hundred and fifty million or even two hundred million dollars.
I was just thinking, is that enough to make up
for the political capital you've got to spend in order
to be able to do that? Now, maybe New Zealanders
don't care if properties that are worth five million dollars
(32:53):
or more get sold to foreign buyers, given that most
of us aren't buying those properties anyway. In fact, ninety
nine point nine percent of us are not buying those
properties at will give at least than point one of
a percent of properties in New zeal And self for
that five million dollars.
Speaker 3 (33:09):
Yeah, and I'll tell you what, seventy four million dollars
is just simply not enough money to get on the
bad side of Winston Peters. He came and he kiboshed
this idea from the NATS. I mean, I remember thinking
at the time when I was reporting on it seems
like a fair idea. You know, we need to change
the way that we look about foreign buyers because if
somebody is coming into New Zealand and they're a wealthy
(33:29):
high net worth individual, they're looking for wealthy high networth
individual houses. So we're taking away not just the house,
but the person's job. Winston saw all of these arguments
and decided, Nope, it's not going to have it. It's
not my political stripes. And so seventy four million dollars
is not enough money to go cap in hand to
Winston and say can we please change this? And I'll
(33:50):
tell you why. Nicola Willis, when she was at the
Half year Economic and Fiscal update before December, was asked
this very question and she gave me a very very
interesting answer. She said, we asked, you know, you're looking
for revenue. You've said that time and time again. You're
looking for revenue. The economy is not as good as
it was. You're missing a bunch of tax revenue. What
(34:10):
new taxes are you thinking of? And I think it
was I think unprompted or somebody asked her about their
foreign buyers bam, and she said, well, you know, we
are in a coalition agreement, a coalition where that has
been agreed, but you know there's new coalition agreements, there's
new terms and governments. It might be something we can
look at down the road. So she's clearly got it
in the back of her mind. Still, it's clearly something
(34:31):
that it's in the NAT's wheelhouse. They just need to
win Winston over.
Speaker 2 (34:34):
The other thing that I would anticipate that Nicola Willis
would look at is well, is the fifteen percent tanks
that we proposed at the election still appropriate? So I
was also thinking as I was driving here, because that's
where most of us.
Speaker 3 (34:48):
Sounds a productive drive, you had, well, that's what we
all do.
Speaker 2 (34:51):
Right, that's how thinking time in the car unless you've
got the kids in the back seat, you drop. I
was thinking, well, how could she get Winston over the line? Well,
maybe it's not a fifteen percent tax on the purchase price.
Maybe it's a twenty five percent or a twenty percent tank.
Maybe that's scratchet it way up. Maybe that's the other
lever that she can pull to bring in more tax
revenue so that we get that number up a bit.
(35:12):
And again it's probably going to be more than seventy
four million dollars just because those properties that do sell
are at a very very high amount. But you know,
it kind of gives you the scale of it.
Speaker 4 (35:23):
Yeah.
Speaker 3 (35:23):
Interesting. I mean you would have to think from a rich,
wealthy individual that's coming into New Zealand. How and I
always get the terminology wrong here. You're an economist, how
elastic or inelastic is that in terms of attacks on
a house? If it goes from fifteen to twenty would
that be enough to prevent you from coming in?
Speaker 4 (35:41):
Yeah?
Speaker 2 (35:41):
So what you're really asking is are people going to
pay it if you increase it from fifteen to twenty
five percent? Well, one thing that's really interesting is how
expensive other houses are. So often we talk in New
Zealand that our houses are expensive and they are relative
to our incomes. But if we look at some really
rich overseas countries, their houses are really expensive. So it's
(36:02):
quite interesting. I was over in Switzerland over the hool
of that. I was really lucky to go over there.
And of course whenever I go overseas or to another
town that's not Auckland, I do want most of us
to I look at the houses for sale in the
real estate and the real estate company's windows, and it
is amazing, like eyeboggling, how expensive houses are in places
(36:24):
like Switzerland and and parts of Germany, and even in
parts of China. You know, properties in Shanghai or Soul
in Korea, they can be incredibly expensive. So somebody could
sell an apartment and Soul come over here and with
the exchange rate and still buy a really, really nice house.
Because our properties to us are expensive, to some foreign
(36:46):
buyers from some countries, they can look relatively affordable.
Speaker 3 (36:49):
Yeah, interesting stuff and will be back after this news
talk ZBI the.
Speaker 1 (36:55):
One roofed Property of the Week on the weekend.
Speaker 3 (36:58):
Collective Ladies and Gentlemen start your end. No, don't start
your engines. The property of the week this week is
down in Warnaca, forty Riversley Road. Now, this is a
beautiful five bedroom, three bathroom, two car garage.
Speaker 4 (37:16):
It was.
Speaker 3 (37:16):
It's the house itself three hundred and fifty five square meters,
the land is one thousand, four hundred and nineteen square meters.
It goes to auction on the February the twentieth estimated
just a cool two point ninety three million, the low
two point four nine, the high three point three seven,
with an RV of two point two six. I can
(37:38):
see myself living in this place. It's got this beautiful pool.
The sunset views are amazing. That's got this giant, giant
kitchen island.
Speaker 2 (37:47):
What do you think The amazing thing about Warnica is
it's not necessarily about the house. That's not why you
move there. You move there because when you look at it,
the hills and the mountains and they're absolutely golden. That's
the sort of place you want to be. The really
interesting thing about this house, and I'd suggest people go
have a look at this song one roof forty Riversley Road.
We said it was is a really good place for
(38:09):
people who want to go as a holiday home. And
I'll tell you the reason why. If you look at
the floor plan, what you want if you're going to
buy an expensive holiday home is you want enough space
for all of your friends to come. And what you
often see in architectural houses like this is you'll have
one large master bedroom which is exactly what you've got.
(38:30):
It's got a huge on suite, and then what you
often see is there will be a number of other
bedrooms that are all exactly the same, all identical. And
that's really good because then if you have a couple
of friends over who are all couples to stay, if
you've got three million dollars to spend on ours, then
they don't get jealous of each other. It's all the same,
so it's really good. And you actually see that with
(38:51):
this house. You have another bedroom that's got an on suite,
and you've got three bedrooms that are all identical, so
really really good rooms for kids and also for guests.
So if you do happen to have a cool three
million dollars, this is probably quite good shopping, I would
have thought. With amazing views of those mountains and and
just the best place to have guests over for those holidays,
(39:11):
which I'm sure we're all thinking about now that we're
just coming back to work.
Speaker 3 (39:15):
I'll tell you what. It's also got a dedicated kids
media room, which sounds incredible.
Speaker 2 (39:19):
Well, of course, one of the main things you want
to do when you go away on holidays. No, we
don't want any of that family time, Chuck, the kids
all go off into the media where you're Sally and
Tim go into the kids media room. We're off having
our rose wine out on the deck as adult time.
So check it out. That's forty riversly road on one roof.
Speaker 3 (39:39):
Yeah, I mean probably you could do some great barbecuing
out there. In the break you were telling me about
your charcoal barbecue. Do you think you can get some
good charcoal barbecuing done out there?
Speaker 4 (39:47):
Oh?
Speaker 2 (39:47):
Well, that's the amazing thing. When you buy a house,
you've really got to look at the channels. Because what
I was able to school when I just bought my
house was this. I think it's probably worth about two
or three grand, this massive charcoal barbecue, which I'm pretty
sure the previous owners just couldn't be bothered moving. So
we got that. So I was very happy so after this,
I'm going to go and I've bought my charcoal. I'm
gonna go fire that up for the first time. Because
(40:08):
young guys in their thirties, my understanding is you make
one of three things your personality's way.
Speaker 3 (40:14):
Where you're going to say, barbecuing, golf or running.
Speaker 2 (40:19):
That's pretty close. Yeah, exercise and meat or alcohol is
one of the other ones, and golf. So maybe I'll
see if we can make meat part of my personality
and my soluberity.
Speaker 3 (40:28):
I mean, it sounds like you've got some pretty good
things on the menu.
Speaker 1 (40:30):
Ed.
Speaker 3 (40:31):
Thank you so much for joining us. It's been a
fantastic hour. We got the Parenting Hour coming up. Next,
the Parenting Squad will return to News Talk z B.
It's just about five o'clock.
Speaker 1 (41:01):
For more from the weekend collective, listen live to News
Talk zed B we Care from three pm, or follow
the podcast on iHeartRadio.
Popular Podcasts
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy And Charlamagne Tha God!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Decisions, Decisions
Welcome to "Decisions, Decisions," the podcast where boundaries are pushed, and conversations get candid! Join your favorite hosts, Mandii B and WeezyWTF, as they dive deep into the world of non-traditional relationships and explore the often-taboo topics surrounding dating, sex, and love. Every Monday, Mandii and Weezy invite you to unlearn the outdated narratives dictated by traditional patriarchal norms. With a blend of humor, vulnerability, and authenticity, they share their personal journeys navigating their 30s, tackling the complexities of modern relationships, and engaging in thought-provoking discussions that challenge societal expectations. From groundbreaking interviews with diverse guests to relatable stories that resonate with your experiences, "Decisions, Decisions" is your go-to source for open dialogue about what it truly means to love and connect in today's world. Get ready to reshape your understanding of relationships and embrace the freedom of authentic connections—tune in and join the conversation!