Mortgage rates are forecasted to drop over the coming months, but many homeowners will still be in for a rude awakening when they go to refix.
Helen O'Sullivan joins Tim Beveridge to discuss how far homeowners should go to deal with mortgage stress - or when it becomes time to throw in the towel.
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Episode Transcript
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:12):
Long because I'm going to lay this please sure much
to the DEMENSI fuel you, and welcome back. This is
(00:37):
the Weekend Collective. I'm Tim Beverage and welcome to the
one Roof radio show for this hour. By the way,
if you missed any of our previous hours, you can
go and check out the podcast look for the Weekend Collective.
And this hour, we want your calls and your text.
Of course, we can call us on No. Eight one
hundred and eighty ten eighty and we want your participation
in this. And my guest is she is CEO of
the Real of real Estate at Velocity. That's v A
(01:00):
L O C I T Y. That shouldn't be a
name that seedy surprised you because she's been a few
times Velocity dot co, dot nza and her name is
Helena Sullivan and she is with me now. Good afternoon,
got a.
Speaker 3 (01:10):
Tim, Good afternoon, and how fabulous to be back.
Speaker 2 (01:13):
Oh nice to see you. Now. Actually, before we get
into it, and we're going to chat about how people
the sort of common mistakes people might make when they're
in the mortgage stress. But just remind everyone about the
work that you do at Velocity, because you've also got
something coming up which you're going to give us a
little tease for about some work you're doing with One Roof.
Speaker 3 (01:33):
That's right. So Velocity is the data partner for One Roof.
One Roof of course an extensive property portal part of
the NZME group. Velocity provides a whole bunch of lovely
datas that is part of the content that you'll find
on the one Roof site. And we've been doing a
big piece of work with One Roof on hot in
(01:54):
the cities, the top one hundred up and comers, up.
Speaker 2 (01:58):
And coming cities or suburbs with us suburbs within the cities.
Speaker 3 (02:01):
You're fair to say reasonably shortlist of actual cities in
New Zealand.
Speaker 2 (02:05):
No, No, the top one hundred cities that would probably
be everywhere in New Zealand. Actually, do you sometimes find
that when you we all have our emotional, sort of
based opinions and because we've discovered a suwhere we look
at and go God be to that one's going really well,
and then you see the data and it doesn't back
up your opinion, do you find it hard to change
(02:25):
your intuitive mind on the stuff when you see the
data versus what you reckon I do I think most
people do.
Speaker 3 (02:33):
Do you look? I think there is always an aspect
of that, But yeah, I go by the data and
generally the data will just sometimes it depends on much
data points you're looking at. So, I mean, one of
the things we've done in this analysis is we haven't
We're not just looking at property prices and going what's
the most expensive. We're looking at things that have the
most potential to grow in the future. So where are
(02:55):
the Kingslands of tomorrow?
Speaker 2 (02:56):
Essentially, So you're looking at this thing that's coming out.
When's it coming out? One Rounday morning, Monday morning, Oh,
it's any couple of day. You can probably tease us
a little.
Speaker 3 (03:03):
Bit about it. Could be there will be I think
there could be some controversy around our top our top ten.
Speaker 2 (03:09):
So what is the data going to be telling us on.
Speaker 3 (03:12):
This just while we're so look, what we're doing is
we're looking at We're looking at factors that will drive
future growth in the in that that suburb, things like
resilience to shock, the accessibility to amenity and proximity to
fun stuff to do, but transport links and that kind
of thing. So the sort of thing that you might
(03:35):
result in suburbs being undervalued and overlooked. But you can,
you can probably you can.
Speaker 2 (03:42):
Yes, bargain has to have a little bit of guesswork
because you're looking at infrastructure that's going in that might
not be reflected in the data data. I always get
that wrong. Data. It is data. I know, it's data, data.
Speaker 3 (03:54):
Data, Tomato, tomato, we know what you're talking about.
Speaker 2 (03:58):
But so it looks at data and where the values are,
and then it puts it looks at how amenities might
contributing to, meaning that we'll actually guess what this place.
It sort of combines I don't mean guess what. It
combines a bit of analysis on what does these things
have on paper.
Speaker 3 (04:16):
A bit of forecast, and a bit of anticipation or
where amenity will is going it and you know that's
that's that's quite a bit of it.
Speaker 2 (04:25):
Have you got anything in teesus? What's what? Is one
of the little surprises that we've got that you.
Speaker 3 (04:29):
Probably one of the little surprises is that some of
the when any other top one hundred list would feature
things such as say pontsmu Era they don't make this list.
Speaker 2 (04:42):
Oh I know it was. Well, that's shocked for you
because I suspect you may live in one of those era.
Speaker 3 (04:47):
I may have lived in both of them.
Speaker 2 (04:48):
You have, we we were your feelings hurt, so.
Speaker 3 (04:55):
Crushed.
Speaker 2 (04:55):
So what you're what you're saying is that in terms
of what's hot, it's not.
Speaker 3 (04:59):
It's not an up and coming hot Okay, because I
guess the point with the Pontsbus and the remu is
it this world is that they have seen significant capital growth,
They've seen significant expansion, and their potential to is a
percentage their potential to continue to increase. It's kind of
maxed out because you know they can only get they
(05:21):
can get so expensive.
Speaker 2 (05:22):
So what we're really looking at with this is more
from a point of views as an investment, what you're going.
Speaker 3 (05:28):
To see to buy as a first home buyer as.
Speaker 2 (05:30):
Well, Okay, anywhere that's the hottest place to buy as
a home first time buy. How much you're going to
leak to me today? I mean, this is the one
roof radio show if you're.
Speaker 3 (05:38):
Going to but we want people. I'm not going to
tell all tim, I just can't, Okay.
Speaker 2 (05:45):
So in other words, I imagine somewhere like Victoria av
in Remer is probably not going to necessarily make this
list because it's already it's already stratispherical. Okay, that's it.
Speaker 3 (05:57):
I mean you're not peak value that they will continue
to increase. But you probably couldn't track down to VICKYV
today as a first home by and find terribly much
in your price range that you could expect to see
you appreciate, you know, significantly in future, Okay, because you
might just struggle with the entry price. Whereas a lot
of these suburbs you may well find it's the Kingsland
(06:19):
of tomorrow. People bought in Kingsland because they couldn't afford Ponsonby,
and now you can't afford Kingsland. So we look at
Mount Talbot and then you're beyond that going on down
the railway line. Evandale is starting to increase in values.
So it's the Okay, where's next from?
Speaker 2 (06:35):
And this is out on Monday. Just one question is
there not in terms of a surprise of what's not
in there? But is there a surprise when you look
at it and you go, I'm either surprised to see
that or it's about time that we saw that.
Speaker 3 (06:50):
I think there will be some Oh okay, yep, I
can see that. I can definitely see that. And for
those who are already are looking those areas, they may say,
could you please stop banging on about it, because we
don't want other people buying here until.
Speaker 2 (07:01):
We have Well, you know what, I was about make
my own guess as to what the hottest suburber's going
to be because I've got one. And then I thought, well,
then again, if I'm thinking that I might want to
buy there and it's my first before into investment, there's
no way I should There's no way I should say
say it to anyone? Should should I?
Speaker 4 (07:17):
Yeah?
Speaker 2 (07:18):
Hey, mortgage stress. Now, it's it's an interesting time to
be talking about mortgage stress because there's talk about mortgage rates.
I mean, we're all expecting mortgage rates to fall, but
there are still a lot of people who will be
fixed on a very low rate who are still in
for a rude shock. How many people do we think?
How common is more mortgage stress right now? I would
(07:39):
think there'd be a very would be the unanalytical sort
of way of describing it.
Speaker 3 (07:45):
I think it is not. It is surprise pleasantly surprisingly
not not too bad, partly because we do have a
tendency in New Zealand to lock in a reasonable chunk
of mortgage rates and so not. You know, if you
look at the curve of sort of level of of
(08:05):
fixed interest, there's a big chunk that's coming off those
lower rates this year. But I suppose the outside is
we've seen one decrease in rates, I've seen predictions of
there being a further fifty basis points between now and
the end of the year. So I guess even if
there might be significant stress at the moment, I think
(08:26):
there's still there is some optimism that there might be
light at the end of the tunnel, and that may
not be another train at this point in time. I
think the bigger issue for people at the moment is
employment uncertainty, and that's probably giving people more stress than
anything else.
Speaker 2 (08:44):
Actually those probably intuitively speaking, that would be the factor
that would really put either an individual or a couple
at great stress. Not because even with interest rates dropping,
with the unemployment rates and the public service and things
like that, that must be a horrendous time.
Speaker 3 (08:59):
To Yeah, and look, I see, you know, Pontsimbie Road
has got empty shops and I haven't seen in years.
You know, all of a sudden there is empty space
on what has been you know, Auckland's one of Auckland's
premier shopping strips.
Speaker 2 (09:14):
I've noticed that myself when I was in Takapuna a
week or so ago, I walked down there. I can't
remember the name of the road or the street, but
it's a one way sort of shopping precincts. It's all
beautifully done. I think I saw six or seven premises
for lease, which really was jarring because it's such a
beautiful area. But almost felt better because I get some
(09:37):
calls from Australia on talk back and somebody was talking
about just the same sort of thing over in Australia.
Because we're at the moment the media is all like
Australia's wonderful. The Australia is wonderful, but they've got their
stresses as well.
Speaker 3 (09:50):
Yeah, I was in Melbourne recently, and I was there
immediately after the pandemic and it got hammered. Obviously, they
had even longer lockdowns than we had in Auckland, but man,
it gutted some small business in and I don't feel
like it has bounced back completely either. Yeah, it's still
(10:10):
a lot of indy stock. And still you kind of
get a sense when there's a lot of charity shops
on what would otherwise be what you would think would
be premium shopping spaces, you kind of get the sense
that maybe things sound aren't all well. You know. I
feel like inflation has come down really sharply in the
last six months. I think we could see a reasonably
(10:33):
quick move for interest rates to come back down because
you know, sectors like construction are still in serious trouble
in teams of volume.
Speaker 2 (10:42):
So we want to talk about mortgage stress. Are you
suffering mortgage stress? And or have you had to cope
with it? But have you worked out what your strategy
is if you're really struggling to meet those obligations, Because
you know, times have changed as well in terms of
the attitudes of the banks are much more helpful than
they might have been twenty years ago.
Speaker 4 (11:03):
More.
Speaker 3 (11:04):
Yeah, Look, your key thing is that banks don't want
you to be a bad debt. They lend you money
to get it back, and if things are starting to
go pear shaped, early is the best time to start
talking to them.
Speaker 2 (11:18):
What are the biggest mistakes people can make. Then if
they are under.
Speaker 3 (11:22):
Mortgage stress, ignoring it and not engaging early with banks
and with a mortgage broker is a really good ally
to have if you're under any kind of stress in
that space, you know, there are lots of options to consider,
including changing extending the term of your loan, and you know,
(11:42):
getting a professional who's on your side early on is
just a great idea.
Speaker 2 (11:47):
The other thing is there's a piece on the One
Roof site One Roof Dot curted and said, and it's
a story about people worrying about being able to afford it,
and there's a mortgage advisor who said there is also
what's called make believe mortgage stress, where people sort of
misunderstand about the mortgage payment, some repayment terms and they
(12:07):
feel that they're going to have to sell and downsize
when there are other sort of solutions available to them.
Speaker 3 (12:12):
Well, yeah, it's more you kind of think there's only
one way of dealing with it, and it's like, I'm
never going to be able to pay this back. Extending
that mortgage term so that you are, you can, you
got a little bit more headroom can be one solution,
But what is suitable for your circumstances and your situation
(12:35):
is really bespoke. So that's why you need to engage
with professional advisors, and a mortgage broker is a really
great source of good advice on that stuff.
Speaker 2 (12:43):
I almost wonder if we've got to the stage and look,
we're not under mortgage stress. We always worry about paying
a mortgage off and getting on with life. I guess,
but that you really that it's how do I put
this that? Really, Ultimately, if you are someone who wants
to continue to own your house, no matter what stress
you are under, the banks and the mortgage brokers, everyone
(13:07):
is there to try and keep you in that property
because mortgage selling, mortgage e sale is I mean it
used to. It's always the last resort, they say, But
it seemed to happen a hell of a lot more.
I can remember twenty or thirty years ago. You see
the black and white pages of the property sort of
pay on whatever the publication was. We're brimming with mortgage
e sales. But you don't see that so much these days,
(13:27):
do you?
Speaker 3 (13:28):
No, not so much. And I think it's because banks
have got the approach, you know, from a responsible lender perspective,
from a pr perspective, they actually don't want to be
in the situation of having to enforce mortgages in that way,
and there is a stigma to it, to that mortgage
b sale placement which can result in the value of
the property being diminished, which doesn't actually help the banks either.
Speaker 2 (13:52):
Yeah, are there other bad decisions people make when it
comes to mortgage stress, Because when you mentioned the biggest
mistake people make is just not to engage with it
and to ignore it. I can't imagine any other mistakes
outside it. To me, that would just be the major
elephant in the whole equation.
Speaker 3 (14:07):
Look ignoring it as it would be the number one challenge.
But I suppose the second is trying to deal with
it without talking to without taking some advice. You know,
if you are finding it daunting, then just a budget advisor,
a mortgage broker is like, Hey, you go to a
doctor when you're un well, when your finances are giving
(14:29):
your stick, but you'll find some find this, find the
doctor of the finance world to help you through it.
Speaker 2 (14:34):
Actually, when you say that, it actually almost makes the
point that regardless of whether you're under stress or not,
every now and again you should actually stop and look
at your mortgage and go, is this thing that I
signed up to maybe two years, five years ago? Is
this still the way I should be proceeding exactly?
Speaker 3 (14:50):
Because ultimately, why did you buy the house? Did you
buy it to have a long term home? Did you
buy it as an investment? How old are you? What's
your time period in terms of the next that you
want to do? Because with the growth and build to rent,
you know, for some people at a point in life,
(15:13):
the right answer might be, rather than struggling on waiting
for that next big bill to turn up, finding those
bill to rent options where you've got security of tenure
but don't have to deal with a the mortgage and
b those big one off maintenance expenses might actually be
a better option for you at this point in your life.
(15:35):
Maybe it's better to go back and do that for
a period of time, build up a bigger equity pile
than for next time.
Speaker 2 (15:42):
Okay, we won't want your cause if you have suffered
from mortgage stress, you've been through you know, so the
worst of times. How did you get through it? And
we'd love to have the benefit of your experience as well.
I know eight hundred and eighty ten eighty. But on
the more broader question, you might be someone who's maybe
not under the same stress as someone who's looking at
looking down the barrel of a mortgage sale. But how
often do you actually re examine your mortgage and get
(16:04):
advices to whether, in fact what you what you structured
two or three years ago might actually be worth taking
another look at eight hundred eighty ten eighty text twenty
three past four Newstalks, it'd be.
Speaker 4 (16:37):
Well pop in the fall of the way in the
nighties studying Crystal lay his custom shuttles on.
Speaker 5 (16:49):
Aster and what it.
Speaker 2 (16:53):
News Talk said, b I'm Tim Beverage, Welcome back, eight
hundred eighty ten eighties another text nine two nine two.
How do you cope with mortgage stress? How are you
coping with mortgage stress? Are you simply hanging in there
waiting for the interest rates to drop? Because if you
haven't a large mortgage, and I know someone who a colleague,
distant colleague, who is a large mortgage who's basically just
(17:13):
going on the cash, what is it the floating interestingly
that's interestingly, no, not interestingly, going on the floating rate
just to give it a couple of weeks because of course,
the Reserve Bank will be announcing another drop in the
interest rates, and I think it's going to drop a
fair work, isn't it. What do you reckon?
Speaker 3 (17:30):
I was seeing some commentators protecting another fifty basis points
between now and Christmas.
Speaker 2 (17:35):
I've heard people predicting more than that, like one hundred.
In fact, I think the consensus I heard was about
seventy five. But you know it shifts day by day. Hella, no, Sullivan,
should I say, just in case people don't know who's
talking from velocity?
Speaker 3 (17:49):
Yeah, Well, with inflation coming back, you know, firmly back
into the reserve banks, in the middle of the reserve
banks range it, you know, the need for those high
level of rates is clearly gone.
Speaker 2 (18:02):
Because if you were struggling with the mortgage right now,
and you are, maybe you're coming up to refix, you
probably would hold off on fixing for another few weeks,
wouldn't you.
Speaker 3 (18:11):
Absolutely? Absolutely, I've got a trumpe that's coming off and
round about now, and that's exactly what I'm doing.
Speaker 2 (18:17):
You just literally have to flick onto the floating rates
for a few weeks and just tough it out for
a few days.
Speaker 3 (18:21):
Yep, yep, it's hearty, but you know I will it's
only come on like so it's actually almost about the
same rate as it well was when I fixed it
eighteen months ago.
Speaker 2 (18:32):
By the way, to look for on Monday one roof
and velocy. You've done some work and it's about the
top one hundred suburbs and the ones to watch. I
won't give anything away, but the one that is is
number one. Funnily enough, I was talking about with a
friend who's a mortgage broker, and we were talking about
I'll tell about the two that are not at number one.
(18:53):
One was Beach Haveven and the other was Burkdale, which
I've always thought Beach Haven every time you drive around there.
It's a beautiful you know, it's a lovely situation the
way it's positioned. It's quite close to the city and
yet it's still quite affordable. And the third one we
talked about is actually the one that's at number one,
but I'm not going to give it away because no
spoiler aletsmbargo. Actually somebody said graft and somebody sent to
(19:16):
text Grafton a significantly undervalued suburb so close to the
CBD and handy to absolutely everything. I can't give anything
away on that, but I would imagine Grafton be quite expensive,
wouldn't it.
Speaker 3 (19:27):
Well, Grafton's got a real mix of suburbs of stock.
It's got some really fabulous apartments.
Speaker 2 (19:33):
Yea.
Speaker 3 (19:34):
Coincidentally, I may or may not have owned, may may
or not have owned in that suburb before.
Speaker 2 (19:42):
But what do you live there?
Speaker 3 (19:45):
The train station is incredibly handy, and there are some
great apartments apartment there's quite a number of apartments in there.
But then you've also got the really gorgeous old traditional
it's one of the most historic parts of Auckland City.
So it's one of those old miners cottages and that
sort of stock. So you can have things from sort
(20:05):
of eight hundred, you know of six seven, eight hundred
thousand to three and a half four million, so it's
really different stock.
Speaker 2 (20:13):
Yeah, hey, just on that. So on the mortgage stress
thing that people are struggling, and as it is a
strange we're in a strange point in time really because
there are still a lot of people who are coming
off pretty low interest rates and yet the highest interest
rates are starting to fall. Is that we were just
talking in the break about taking the opportunity regardless of
(20:37):
what stress you're under to re examine your mortgage, because
I think for most people, you've signed up twenty twenty
five years, thirty years or whatever. But then you get
a better job, you maybe get a little bit of
a promotion, and all of a sudden you've got extra
disposable income, and there's that balance between you. How do
I actually enjoy life a bit more? Do I actually
pay that off my mortgage? How does it work with
(20:59):
the banks if you've signed up for maybe two or
three years fixed, but you decide you want to pay
more off A lot.
Speaker 3 (21:05):
A lot of mortgages contain a provision that allow you
to increase your repayments up to, say, you know, twenty
percent without any penalty. And that is an absolutely brilliant
idea if you can do it. If you can start
squeezing another fifty hundred dollars a week, if you're paying,
say seven percent on your mortgage, if you can increase
your repayments by one hundred dollars, you're basically earning seven
(21:28):
percent on that money because it's all coming off capital.
Speaker 2 (21:31):
And in the context of a large mortgage, if you
pay that off, say well, let's say you knock a
twenty five year mortgage down to twenty years. That's actually
quite a lot of money, isn't it.
Speaker 3 (21:40):
The amount of money that you save by doing it
is sensational. It's effectively compound interest in reverse. So rather
than pay you know, you reduce your capital faster. You
save a truckload of money over time. It's quite free.
You know yourself a little Excel's breadsheet and mock that
one up. It's quite remarkable.
Speaker 2 (21:58):
Okay, there was something we also did want to talk about.
This hour was about spotting a few in the investment
side of things. And you're not just buying something to
sit on it and do nothing with the art of
spotting a good fixer upper. Have you ever done that?
Speaker 3 (22:15):
Look? I looked at it once and I was counseled
by a good friend of mine who pointed out that
an a plus for a small wooden footstool in third
form form two woodwork does not qualify you to take
on a completely crappy nineteen twenties property and constantly and
(22:38):
rebuild it. So one of the key things about a
fixer upper is you've got to have You've got to
have a modicum of capability.
Speaker 2 (22:46):
I don't mean your own DIY. But even if you're
want to fix it up by paying people to do it,
there would be Yeah.
Speaker 3 (22:51):
But paying people to do it is a path where
you've got to be able to really got to have
the capability to put a lot of sweet equity into it,
even if it's just cleaning stuff and dig out the
garden and that kind of stuff. If you pay, if
you pay full market rate for all of that stuff.
(23:13):
You need to make sure you have fully scoped your
work long before you start it, and that you've actually
got the numbers right and you're going to come out
on the right side of the leader once you've finished.
Speaker 2 (23:25):
What do you think would be the big mistakes in
terms of you see a property that you can improve
a little bit to add some value to it. What
would be the no go areas when it comes to
accepting some sort of leeway.
Speaker 3 (23:37):
For some work structural issues. It's probably your biggie. Whatever
you allern for bathroom and kitchen, double it because and
don't fall in love with it.
Speaker 2 (23:51):
Yeah, well, if it needs a bit of a duo. Actually,
that's the thing I think do ups you probably do
tend to fall in love with because you look at it,
and you've get into it because you're getting you can
inspired by your own ideas, and you go, look at
this weekend, I'll put the kitchen on.
Speaker 3 (24:03):
The other side, and suddenly you're moving the kitchen and
then you're talking cub it money. So it's keep it
if you're going to do it, keeping in mind that
the purpose of why you're doing it, and putting in
another five the year, and another ten the year and
another fifteen. There, you've just increased the cost on the project.
(24:23):
Buy another fifty grand and are you going to get
that fifty grand back? Have you added? You know, there's
not much point on a doer upper spending ten dollars
to get back eight dollars.
Speaker 2 (24:33):
Well, I guess the adage I'm thinking of is worst house,
best street, Because if you're buying into an into a
subd that's not particularly flash, then probably buying a door
upper is not really going to help you. But if
you are buying into a street where something is a
bit of a bargain because it's the worst house in
the best street, that probably would be the time, wouldn't it.
Speaker 3 (24:52):
Yes, But but well, it depends on how bad the
house is and is the next buyer actually going to
bull it, and all of that money in time that
you've put it, you actually over capitalize them, because in fact,
the next who's your next buyer is the question you
need to work backwards from, And if your an next
buyer is going to bowl it, then that extra sixty
(25:15):
grand you spend on the kitchen and bathroom could actually
be a complete waste of money.
Speaker 2 (25:20):
Yeah, I think in the it does sound like if
you see a house and you think that it's got
great potential and you start to fall in love with it,
you probably in a bit of a problem unless you
really know what you're doing.
Speaker 3 (25:29):
Well, it's just you might you might find yourself, you know,
spending another You might find yourself moving in and that's
okay too, But again it's like keep the end in mind.
And there's a really great book called When Big Things
Get Done, How Big Things Get Done, which is worth
a read if you're contemplating a renovation project because essentially
what they talk about is all the time and energy
(25:51):
that you put into planning is never wasted. And one
of their favorite examples Who's This The book How Big
Things Get Done, and one of their favorite examples of
projects that spiral hugely out of control in terms of
cost and time, overruns and not getting the returns that
you thought you were going to our house read of
(26:12):
actions when you start on what you think is a
ten thousand dollars in the kitchen job in the kitchen
and oops, we're going to have to reparlor house and oops,
we're going to do this, and suddenly we spent three
hundred thousand dollars. It's three years later and we haven't finished.
Speaker 2 (26:26):
Well a little bit from our own point of view,
when we're doing a bit of a DIY in our
place while we're living while we're living in it, but
it's a little bit well, it does get dragged out.
But what it has sort of told me is that
you can have a time frame in mind and you
should probably double it.
Speaker 5 (26:44):
Yep.
Speaker 2 (26:45):
You might think, oh, let's get this done in six weeks,
Well it's probably going to be at least twelve when
that must be the case with just about unless you
have a team of builders who work for you on call.
Speaker 3 (26:55):
Then yeah, I guess that's where the concept of planning
the whole thing from start to finish before you get started,
is so key.
Speaker 2 (27:06):
Right, We're going to take a quick break. We'll be
back in just a moment. It's twenty three minutes to
five News Talks. It be your rules for actually, are
you someone who's good at doing houses up, you're good
at spotting something where there's a bit of improvement. What
are the areas you look at and what makes a
good doer upper versus a money pit that's just going
to be nothing but a source of misery for you
(27:27):
for the next term six months or a year or
two or whatever. It is twenty three minutes to five
News Talks, it'd be okay. A couple of other questions
once somebody has said, when is it worth breaking a
fixed term loan? Well, that is a big question. We're
not going to give specific financial advice, but what observations
would you make on that.
Speaker 3 (27:44):
That's one to do the modeling on really carefully. But
you know, when we're at the point now where you know,
if you've fixed something for five years at a really
high rate, the bank will always win as the tragedy
of this exercise, because they basically they've anticipated the future
(28:04):
and for the next five years or whatever it is
that on that on that loan, and so they will
look to basically make as much money on breaking it
as not. But if you're in a situation where you've
had a sudden shock, for example, if you halved your
income for one reason or another, it could be worthwhile
doing the mathson, I can add that to the capital
(28:25):
of the loan and it will enable me to retain
the property or you know what. The kind of bick
out of action.
Speaker 2 (28:30):
In terms of doing those calculations, I guess, well, one
you'd talk to the bank, but would you talk to
the bank or the mortgage a mortgage broker.
Speaker 3 (28:36):
I would definitely get a mortgage broker involved to help
me with a process like that, un questionably.
Speaker 2 (28:41):
Because they can well, for one, doing the numbers is
like water if for ducks back for them.
Speaker 3 (28:45):
Number two, they are good advocates, so in terms of
twisting the bank's arm to get you the best possible outcome,
absolutely I want a good mortgage broker on my side
for that.
Speaker 2 (28:55):
Gonbo is that also because well, mortgage brokers they channel
a lot of business in a particular banks direction. That
gives them a little bit. I mean there's not just
a relationship there, but there is invested interest both ways
on doing good business.
Speaker 3 (29:08):
Yeah, they've got a little bit more buying power, the
ability to kind of get a bit of deal for you.
But also they're a lot more dispassionate. So even as
a sophisticated finance professional, that's the kind of thing they
are detached from it. And we Keywis can be a
bit weird with money, right, kind of almost embarrassed to
ask for a discount a better deal because you know
(29:30):
that all the bangles think I can't afford it. Well,
they know exactly what you can afford. They've got all
your details. But we can still be quite weird about it.
The mortgage broker is quite dispassionate. They're just interest that.
They're not going to be embarrassed. They'll just go and
get you. Just go, just go for the doctor.
Speaker 2 (29:46):
Okay, another text here, Tom says, Hello, I need to
reflex And now, Tom, we're not going to give you
specific financial advice, by the way, but I always give
that disclaimer. My mortgage is due on the seventh of November,
and in terms for refixing, would you recommend to wait
a few more weeks? Well, we're not going to recommend
and anything specific for you, but we do know people
(30:08):
who might consider, Yeah, what do you reckon?
Speaker 3 (30:13):
Absolutely again, I would go and have a chat with
a good mortgage broker and you get some of get
as many opinions as possible on that kind of trajectory
of the changes. If you're particularly risk averse, you could
refix through a short period of time to say three months,
and you know, to wait and see what happens. And
(30:34):
certainly you can see a trend towards that in mortgages.
At the moment that people are taking, you know, the
short term fix is becoming much more popular then you
know about eighteen about to twelve months ago, people were
taking the longer periods of time. If you didn't fill
up on the cheap money when it was going in
set of three and four percent, that was a good strategy.
Speaker 5 (30:57):
Ye.
Speaker 2 (30:57):
How many do we know what percentage of mortgages people
actually do have a mortgage broker for I just sort
of instinctive knowledge of you know, I reckon.
Speaker 3 (31:09):
Yeah, as far as reckons, I'm really not sure. I
wouldn't have thought that there was a signal, you know
it maybe as much as fifty percent. I'm not sure.
I'm guessing actually, let's be honest, but I would imagine
it's a significant proportion if people do in some way
use a broker.
Speaker 2 (31:27):
What depends which way I look at half empty half full,
because now I know a lot more through doing the
property how around mortgage brokers that it surprises me that
you wouldn't have one because of the service they provide,
unless I guess you are someone This is where you
might struggle to get advice from my mortgage broker. If
(31:47):
you've got a small amount left on your mortgage, there's
not really a lot and for a mortgage broke, you'd
need to almost find someone who is a mate woul
because they're not going to make any money out of you,
really are they.
Speaker 3 (32:00):
Again, most good mortgage brokers, we'll look at that in
the context of a relationship, because while they might not
make a truckload of money out of you and helping
you work out how you've got what you do with
X dollars, you may be so impressed by the service
that you get from Tom and Mary that you recommend
(32:21):
them to your neighbors when they're going how do you
find a good mortgage broker?
Speaker 2 (32:24):
Of course, actually, no, you say that, I realized that
what I just said was absolutely ridiculous. Let's take a
call Steve Hello, Oh.
Speaker 5 (32:31):
Yeah, good guys. Hi a couple of well a few
weeks ago him your head on the Winston Peters of
Housing journalism called Ashley Church.
Speaker 2 (32:42):
You had a good old ding dying with Ashley, didn't you?
Speaker 5 (32:46):
I did. Unfortunately, when you're on this side, you know,
and you're here ready to be cut off at any moment,
you don't really have your your time do you to
put your point across thoroughly as you'd like to, and
instead you're really.
Speaker 2 (33:00):
I think you guys had a good chat. I think
you had you did well, But anyway, did you have hope?
You're not just calling to add to that conversation a
week or two later.
Speaker 5 (33:09):
Oh sorry, Look, they're just a slight addition if you
don't mind. Look, I just wanted to ask you about
housing affordability, because that's really what the That's what the
argument was about, wasn't it. And Ashley Church was pushing
that same old worn out barrow that housing was somehow
more affordable back in the seventies, eighties and nineties compared
(33:30):
to what it is now. That's just, isn't it. It's
all about doubling house prices every ten years, and I
was calling him out on that, and I just want
to ask your guests, does she subscribed to that, because Helen,
just a load.
Speaker 2 (33:42):
Of ah, the idea that the property market will double
every certain period of time.
Speaker 5 (33:48):
And holding is more affordable now, which Ashley Church likes.
Speaker 2 (33:53):
Well, I don't want to have to watch a crack
at at Ashley when he's not here, so well, but
I'll throw it to Helen and.
Speaker 5 (33:59):
Ready for him to come on for the second round.
Speaker 2 (34:01):
But he's hiding now, he'll be back. He'll be back.
Who were waiting for your Steve? But anyway, the whole
thing about affordability, Helen, it's a big question in a way.
Look it is with only a couple of minutes to
go before it.
Speaker 3 (34:15):
And without having a whole bunch of data and trying
I look, I do not think that affordability statistics are
better than they currently than they have been. There are
a lot more people paying a lot more than thirty
percent of their income to service their housing, which is
the definition of housing streets. My take would be that
(34:36):
there are a lot more people in that unaffordable housing
cost today than they were in the nineteen.
Speaker 2 (34:43):
Fifty so yeah, I think actually Steve will have to
come back when Nashley's on this book use otherwise because
we're literally we're literally ten to five. Yeah, we're literally
ten to five. And you probably said Steve, you will
need to call back when Ashley's on to discuss that one.
But I think the point actually was making is it's
often been expensive to buy property, whether the interest rates back,
and everyone uses the example of the eighties and all
(35:04):
that sort of stuff.
Speaker 3 (35:05):
Unquestionably it's always been expensive to buy our property.
Speaker 2 (35:08):
Yeah, anyway, but Steve, you come back, and yes, I
have put you on hold so you can't uspack because
I've got to go to the ads, But definitely call
back because you and Ashley we could sell tickets to
next time. Anyway, it's ten to five news Talk, said b. Yes,
(35:30):
welcome back to the Weekend Collective. This is the one
roof radio show my guest as Hell on a Suliman.
But right now it is coming up to six minutes
two five.
Speaker 1 (35:41):
The one roof Property of the week on the Weekend Collective.
Speaker 2 (35:45):
Yes, the one roof Property of the week, Go and
check it out on one roof dot co dot nzaid
it is nine mayor as an Miaire Road nine Mayor Road,
audi Wa in Rodney. Now it is a magical retreat
perched high above Audi Wear on a three thousand square
meter site to be precise, three and forty one square
me with panoramic views of the ocean and estuary, is
(36:08):
stretching all the way to the Crimeandle and Winuy. The
unique it's a dough decka what is it dough deckagone
living room, which means it's got a bunch of sides.
I haven't counted that already, with a high timber ceiling
designed to enhance the stunning scenery that this premium location offers.
Its estimate is well, it's not cheap one point seven
(36:30):
eight million. We've had certainly had more expensive though, one
point seven eight million, three bedroom, two bathroom, one car, garage.
And my guest Helena Sulimon, you'd have had a look.
You've had a look at it, haven't you have?
Speaker 3 (36:40):
What do you?
Speaker 2 (36:40):
What did you make of it?
Speaker 3 (36:42):
I have had a look at that. The views are spectacular. Yeah,
you can see forever.
Speaker 2 (36:47):
Actually that's probably it. The it's it's the it's the
location with.
Speaker 3 (36:51):
The viewsation, location, location, and.
Speaker 2 (36:54):
I think the dough what is it called dough.
Speaker 3 (36:58):
Deagon which, as you say, what it means is some
very complex joints.
Speaker 4 (37:04):
I love that.
Speaker 3 (37:04):
I love that it exposed timber. Not everybody likes next
both Timber Boom, but I'm a big fan.
Speaker 2 (37:10):
Actually, So yeah, go and check it out nine Mayor
Road or at one point seven eight million. Then you
can check that in one way.
Speaker 3 (37:17):
Well, that is that's the price estimate.
Speaker 2 (37:20):
Yeah, yes, I'm not saying that's what it's the estimate.
Speaker 3 (37:22):
Yeah, I'm not saying you may or may not want
to be able to purchase it for something in their range.
Speaker 2 (37:26):
Yes, I take that as being implied in my property
estimates there very good. It's not a guaranteed sort of
it's yours for that. Hey, just quickly before we wrap up.
We got about a minute to go in your the
report that's coming out Velocity in one roof about the
hot hundred suburbs. Are there particular amenities that really make
a big difference.
Speaker 3 (37:43):
Well, we've gone through and very painstakingly assigned schools to
the amenities based because amenity is a big term, right,
covers a whole bunch of stuff and shots bootsports, schools,
all the stuff that kind of makes life fun and convenient.
You want to be vaguely within striking distance, so you
know there's places to shop, places to place to have fun,
(38:07):
places to send your kids to school, and it's easy
enough to get turned from the places you need to go.
Speaker 2 (38:12):
So go and check out. That'll be out on Monday
on one roof Dot Code Audience he it and that
will be the top hundred, top hundred, So boozing and
check there the top hundred to watch, top one hundred
to watch exactly. There we go, There we go. We'll
be back shortly. Parents Squad. Next News Talk SEDB.
Speaker 1 (38:34):
For more from the weekend collective, Listen live to News
Talks EDB weekends from three pm, or follow the podcast
on iHeartRadio
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:12):
Long because I'm going to lay this please sure much
to the DEMENSI fuel you, and welcome back. This is
(00:37):
the Weekend Collective. I'm Tim Beverage and welcome to the
one Roof radio show for this hour. By the way,
if you missed any of our previous hours, you can
go and check out the podcast look for the Weekend Collective.
And this hour, we want your calls and your text.
Of course, we can call us on No. Eight one
hundred and eighty ten eighty and we want your participation
in this. And my guest is she is CEO of
the Real of real Estate at Velocity. That's v A
(01:00):
L O C I T Y. That shouldn't be a
name that seedy surprised you because she's been a few
times Velocity dot co, dot nza and her name is
Helena Sullivan and she is with me now. Good afternoon,
got a.
Speaker 3 (01:10):
Tim, Good afternoon, and how fabulous to be back.
Speaker 2 (01:13):
Oh nice to see you. Now. Actually, before we get
into it, and we're going to chat about how people
the sort of common mistakes people might make when they're
in the mortgage stress. But just remind everyone about the
work that you do at Velocity, because you've also got
something coming up which you're going to give us a
little tease for about some work you're doing with One Roof.
Speaker 3 (01:33):
That's right. So Velocity is the data partner for One Roof.
One Roof of course an extensive property portal part of
the NZME group. Velocity provides a whole bunch of lovely
datas that is part of the content that you'll find
on the one Roof site. And we've been doing a
big piece of work with One Roof on hot in
(01:54):
the cities, the top one hundred up and comers, up.
Speaker 2 (01:58):
And coming cities or suburbs with us suburbs within the cities.
Speaker 3 (02:01):
You're fair to say reasonably shortlist of actual cities in
New Zealand.
Speaker 2 (02:05):
No, No, the top one hundred cities that would probably
be everywhere in New Zealand. Actually, do you sometimes find
that when you we all have our emotional, sort of
based opinions and because we've discovered a suwhere we look
at and go God be to that one's going really well,
and then you see the data and it doesn't back
up your opinion, do you find it hard to change
(02:25):
your intuitive mind on the stuff when you see the
data versus what you reckon I do I think most
people do.
Speaker 3 (02:33):
Do you look? I think there is always an aspect
of that, But yeah, I go by the data and
generally the data will just sometimes it depends on much
data points you're looking at. So, I mean, one of
the things we've done in this analysis is we haven't
We're not just looking at property prices and going what's
the most expensive. We're looking at things that have the
most potential to grow in the future. So where are
(02:55):
the Kingslands of tomorrow?
Speaker 2 (02:56):
Essentially, So you're looking at this thing that's coming out.
When's it coming out? One Rounday morning, Monday morning, Oh,
it's any couple of day. You can probably tease us
a little.
Speaker 3 (03:03):
Bit about it. Could be there will be I think
there could be some controversy around our top our top ten.
Speaker 2 (03:09):
So what is the data going to be telling us on.
Speaker 3 (03:12):
This just while we're so look, what we're doing is
we're looking at We're looking at factors that will drive
future growth in the in that that suburb, things like
resilience to shock, the accessibility to amenity and proximity to
fun stuff to do, but transport links and that kind
of thing. So the sort of thing that you might
(03:35):
result in suburbs being undervalued and overlooked. But you can,
you can probably you can.
Speaker 2 (03:42):
Yes, bargain has to have a little bit of guesswork
because you're looking at infrastructure that's going in that might
not be reflected in the data data. I always get
that wrong. Data. It is data. I know, it's data, data.
Speaker 3 (03:54):
Data, Tomato, tomato, we know what you're talking about.
Speaker 2 (03:58):
But so it looks at data and where the values are,
and then it puts it looks at how amenities might
contributing to, meaning that we'll actually guess what this place.
It sort of combines I don't mean guess what. It
combines a bit of analysis on what does these things
have on paper.
Speaker 3 (04:16):
A bit of forecast, and a bit of anticipation or
where amenity will is going it and you know that's
that's that's quite a bit of it.
Speaker 2 (04:25):
Have you got anything in teesus? What's what? Is one
of the little surprises that we've got that you.
Speaker 3 (04:29):
Probably one of the little surprises is that some of
the when any other top one hundred list would feature
things such as say pontsmu Era they don't make this list.
Speaker 2 (04:42):
Oh I know it was. Well, that's shocked for you
because I suspect you may live in one of those era.
Speaker 3 (04:47):
I may have lived in both of them.
Speaker 2 (04:48):
You have, we we were your feelings hurt, so.
Speaker 3 (04:55):
Crushed.
Speaker 2 (04:55):
So what you're what you're saying is that in terms
of what's hot, it's not.
Speaker 3 (04:59):
It's not an up and coming hot Okay, because I
guess the point with the Pontsbus and the remu is
it this world is that they have seen significant capital growth,
They've seen significant expansion, and their potential to is a
percentage their potential to continue to increase. It's kind of
maxed out because you know they can only get they
(05:21):
can get so expensive.
Speaker 2 (05:22):
So what we're really looking at with this is more
from a point of views as an investment, what you're going.
Speaker 3 (05:28):
To see to buy as a first home buyer as.
Speaker 2 (05:30):
Well, Okay, anywhere that's the hottest place to buy as
a home first time buy. How much you're going to
leak to me today? I mean, this is the one
roof radio show if you're.
Speaker 3 (05:38):
Going to but we want people. I'm not going to
tell all tim, I just can't, Okay.
Speaker 2 (05:45):
So in other words, I imagine somewhere like Victoria av
in Remer is probably not going to necessarily make this
list because it's already it's already stratispherical. Okay, that's it.
Speaker 3 (05:57):
I mean you're not peak value that they will continue
to increase. But you probably couldn't track down to VICKYV
today as a first home by and find terribly much
in your price range that you could expect to see
you appreciate, you know, significantly in future, Okay, because you
might just struggle with the entry price. Whereas a lot
of these suburbs you may well find it's the Kingsland
(06:19):
of tomorrow. People bought in Kingsland because they couldn't afford Ponsonby,
and now you can't afford Kingsland. So we look at
Mount Talbot and then you're beyond that going on down
the railway line. Evandale is starting to increase in values.
So it's the Okay, where's next from?
Speaker 2 (06:35):
And this is out on Monday. Just one question is
there not in terms of a surprise of what's not
in there? But is there a surprise when you look
at it and you go, I'm either surprised to see
that or it's about time that we saw that.
Speaker 3 (06:50):
I think there will be some Oh okay, yep, I
can see that. I can definitely see that. And for
those who are already are looking those areas, they may say,
could you please stop banging on about it, because we
don't want other people buying here until.
Speaker 2 (07:01):
We have Well, you know what, I was about make
my own guess as to what the hottest suburber's going
to be because I've got one. And then I thought, well,
then again, if I'm thinking that I might want to
buy there and it's my first before into investment, there's
no way I should There's no way I should say
say it to anyone? Should should I?
Speaker 4 (07:17):
Yeah?
Speaker 2 (07:18):
Hey, mortgage stress. Now, it's it's an interesting time to
be talking about mortgage stress because there's talk about mortgage rates.
I mean, we're all expecting mortgage rates to fall, but
there are still a lot of people who will be
fixed on a very low rate who are still in
for a rude shock. How many people do we think?
How common is more mortgage stress right now? I would
(07:39):
think there'd be a very would be the unanalytical sort
of way of describing it.
Speaker 3 (07:45):
I think it is not. It is surprise pleasantly surprisingly
not not too bad, partly because we do have a
tendency in New Zealand to lock in a reasonable chunk
of mortgage rates and so not. You know, if you
look at the curve of sort of level of of
(08:05):
fixed interest, there's a big chunk that's coming off those
lower rates this year. But I suppose the outside is
we've seen one decrease in rates, I've seen predictions of
there being a further fifty basis points between now and
the end of the year. So I guess even if
there might be significant stress at the moment, I think
(08:26):
there's still there is some optimism that there might be
light at the end of the tunnel, and that may
not be another train at this point in time. I
think the bigger issue for people at the moment is
employment uncertainty, and that's probably giving people more stress than
anything else.
Speaker 2 (08:44):
Actually those probably intuitively speaking, that would be the factor
that would really put either an individual or a couple
at great stress. Not because even with interest rates dropping,
with the unemployment rates and the public service and things
like that, that must be a horrendous time.
Speaker 3 (08:59):
To Yeah, and look, I see, you know, Pontsimbie Road
has got empty shops and I haven't seen in years.
You know, all of a sudden there is empty space
on what has been you know, Auckland's one of Auckland's
premier shopping strips.
Speaker 2 (09:14):
I've noticed that myself when I was in Takapuna a
week or so ago, I walked down there. I can't
remember the name of the road or the street, but
it's a one way sort of shopping precincts. It's all
beautifully done. I think I saw six or seven premises
for lease, which really was jarring because it's such a
beautiful area. But almost felt better because I get some
(09:37):
calls from Australia on talk back and somebody was talking
about just the same sort of thing over in Australia.
Because we're at the moment the media is all like
Australia's wonderful. The Australia is wonderful, but they've got their
stresses as well.
Speaker 3 (09:50):
Yeah, I was in Melbourne recently, and I was there
immediately after the pandemic and it got hammered. Obviously, they
had even longer lockdowns than we had in Auckland, but man,
it gutted some small business in and I don't feel
like it has bounced back completely either. Yeah, it's still
(10:10):
a lot of indy stock. And still you kind of
get a sense when there's a lot of charity shops
on what would otherwise be what you would think would
be premium shopping spaces, you kind of get the sense
that maybe things sound aren't all well. You know. I
feel like inflation has come down really sharply in the
last six months. I think we could see a reasonably
(10:33):
quick move for interest rates to come back down because
you know, sectors like construction are still in serious trouble
in teams of volume.
Speaker 2 (10:42):
So we want to talk about mortgage stress. Are you
suffering mortgage stress? And or have you had to cope
with it? But have you worked out what your strategy
is if you're really struggling to meet those obligations, Because
you know, times have changed as well in terms of
the attitudes of the banks are much more helpful than
they might have been twenty years ago.
Speaker 4 (11:03):
More.
Speaker 3 (11:04):
Yeah, Look, your key thing is that banks don't want
you to be a bad debt. They lend you money
to get it back, and if things are starting to
go pear shaped, early is the best time to start
talking to them.
Speaker 2 (11:18):
What are the biggest mistakes people can make. Then if
they are under.
Speaker 3 (11:22):
Mortgage stress, ignoring it and not engaging early with banks
and with a mortgage broker is a really good ally
to have if you're under any kind of stress in
that space, you know, there are lots of options to consider,
including changing extending the term of your loan, and you know,
(11:42):
getting a professional who's on your side early on is
just a great idea.
Speaker 2 (11:47):
The other thing is there's a piece on the One
Roof site One Roof Dot curted and said, and it's
a story about people worrying about being able to afford it,
and there's a mortgage advisor who said there is also
what's called make believe mortgage stress, where people sort of
misunderstand about the mortgage payment, some repayment terms and they
(12:07):
feel that they're going to have to sell and downsize
when there are other sort of solutions available to them.
Speaker 3 (12:12):
Well, yeah, it's more you kind of think there's only
one way of dealing with it, and it's like, I'm
never going to be able to pay this back. Extending
that mortgage term so that you are, you can, you
got a little bit more headroom can be one solution,
But what is suitable for your circumstances and your situation
(12:35):
is really bespoke. So that's why you need to engage
with professional advisors, and a mortgage broker is a really
great source of good advice on that stuff.
Speaker 2 (12:43):
I almost wonder if we've got to the stage and look,
we're not under mortgage stress. We always worry about paying
a mortgage off and getting on with life. I guess,
but that you really that it's how do I put
this that? Really, Ultimately, if you are someone who wants
to continue to own your house, no matter what stress
you are under, the banks and the mortgage brokers, everyone
(13:07):
is there to try and keep you in that property
because mortgage selling, mortgage e sale is I mean it
used to. It's always the last resort, they say, But
it seemed to happen a hell of a lot more.
I can remember twenty or thirty years ago. You see
the black and white pages of the property sort of
pay on whatever the publication was. We're brimming with mortgage
e sales. But you don't see that so much these days,
(13:27):
do you?
Speaker 3 (13:28):
No, not so much. And I think it's because banks
have got the approach, you know, from a responsible lender perspective,
from a pr perspective, they actually don't want to be
in the situation of having to enforce mortgages in that way,
and there is a stigma to it, to that mortgage
b sale placement which can result in the value of
the property being diminished, which doesn't actually help the banks either.
Speaker 2 (13:52):
Yeah, are there other bad decisions people make when it
comes to mortgage stress, Because when you mentioned the biggest
mistake people make is just not to engage with it
and to ignore it. I can't imagine any other mistakes
outside it. To me, that would just be the major
elephant in the whole equation.
Speaker 3 (14:07):
Look ignoring it as it would be the number one challenge.
But I suppose the second is trying to deal with
it without talking to without taking some advice. You know,
if you are finding it daunting, then just a budget advisor,
a mortgage broker is like, Hey, you go to a
doctor when you're un well, when your finances are giving
(14:29):
your stick, but you'll find some find this, find the
doctor of the finance world to help you through it.
Speaker 2 (14:34):
Actually, when you say that, it actually almost makes the
point that regardless of whether you're under stress or not,
every now and again you should actually stop and look
at your mortgage and go, is this thing that I
signed up to maybe two years, five years ago? Is
this still the way I should be proceeding exactly?
Speaker 3 (14:50):
Because ultimately, why did you buy the house? Did you
buy it to have a long term home? Did you
buy it as an investment? How old are you? What's
your time period in terms of the next that you
want to do? Because with the growth and build to rent,
you know, for some people at a point in life,
(15:13):
the right answer might be, rather than struggling on waiting
for that next big bill to turn up, finding those
bill to rent options where you've got security of tenure
but don't have to deal with a the mortgage and
b those big one off maintenance expenses might actually be
a better option for you at this point in your life.
(15:35):
Maybe it's better to go back and do that for
a period of time, build up a bigger equity pile
than for next time.
Speaker 2 (15:42):
Okay, we won't want your cause if you have suffered
from mortgage stress, you've been through you know, so the
worst of times. How did you get through it? And
we'd love to have the benefit of your experience as well.
I know eight hundred and eighty ten eighty. But on
the more broader question, you might be someone who's maybe
not under the same stress as someone who's looking at
looking down the barrel of a mortgage sale. But how
often do you actually re examine your mortgage and get
(16:04):
advices to whether, in fact what you what you structured
two or three years ago might actually be worth taking
another look at eight hundred eighty ten eighty text twenty
three past four Newstalks, it'd be.
Speaker 4 (16:37):
Well pop in the fall of the way in the
nighties studying Crystal lay his custom shuttles on.
Speaker 5 (16:49):
Aster and what it.
Speaker 2 (16:53):
News Talk said, b I'm Tim Beverage, Welcome back, eight
hundred eighty ten eighties another text nine two nine two.
How do you cope with mortgage stress? How are you
coping with mortgage stress? Are you simply hanging in there
waiting for the interest rates to drop? Because if you
haven't a large mortgage, and I know someone who a colleague,
distant colleague, who is a large mortgage who's basically just
(17:13):
going on the cash, what is it the floating interestingly
that's interestingly, no, not interestingly, going on the floating rate
just to give it a couple of weeks because of course,
the Reserve Bank will be announcing another drop in the
interest rates, and I think it's going to drop a
fair work, isn't it. What do you reckon?
Speaker 3 (17:30):
I was seeing some commentators protecting another fifty basis points
between now and Christmas.
Speaker 2 (17:35):
I've heard people predicting more than that, like one hundred.
In fact, I think the consensus I heard was about
seventy five. But you know it shifts day by day. Hella, no, Sullivan,
should I say, just in case people don't know who's
talking from velocity?
Speaker 3 (17:49):
Yeah, Well, with inflation coming back, you know, firmly back
into the reserve banks, in the middle of the reserve
banks range it, you know, the need for those high
level of rates is clearly gone.
Speaker 2 (18:02):
Because if you were struggling with the mortgage right now,
and you are, maybe you're coming up to refix, you
probably would hold off on fixing for another few weeks,
wouldn't you.
Speaker 3 (18:11):
Absolutely? Absolutely, I've got a trumpe that's coming off and
round about now, and that's exactly what I'm doing.
Speaker 2 (18:17):
You just literally have to flick onto the floating rates
for a few weeks and just tough it out for
a few days.
Speaker 3 (18:21):
Yep, yep, it's hearty, but you know I will it's
only come on like so it's actually almost about the
same rate as it well was when I fixed it
eighteen months ago.
Speaker 2 (18:32):
By the way, to look for on Monday one roof
and velocy. You've done some work and it's about the
top one hundred suburbs and the ones to watch. I
won't give anything away, but the one that is is
number one. Funnily enough, I was talking about with a
friend who's a mortgage broker, and we were talking about
I'll tell about the two that are not at number one.
(18:53):
One was Beach Haveven and the other was Burkdale, which
I've always thought Beach Haven every time you drive around there.
It's a beautiful you know, it's a lovely situation the
way it's positioned. It's quite close to the city and
yet it's still quite affordable. And the third one we
talked about is actually the one that's at number one,
but I'm not going to give it away because no
spoiler aletsmbargo. Actually somebody said graft and somebody sent to
(19:16):
text Grafton a significantly undervalued suburb so close to the
CBD and handy to absolutely everything. I can't give anything
away on that, but I would imagine Grafton be quite expensive,
wouldn't it.
Speaker 3 (19:27):
Well, Grafton's got a real mix of suburbs of stock.
It's got some really fabulous apartments.
Speaker 2 (19:33):
Yea.
Speaker 3 (19:34):
Coincidentally, I may or may not have owned, may may
or not have owned in that suburb before.
Speaker 2 (19:42):
But what do you live there?
Speaker 3 (19:45):
The train station is incredibly handy, and there are some
great apartments apartment there's quite a number of apartments in there.
But then you've also got the really gorgeous old traditional
it's one of the most historic parts of Auckland City.
So it's one of those old miners cottages and that
sort of stock. So you can have things from sort
(20:05):
of eight hundred, you know of six seven, eight hundred
thousand to three and a half four million, so it's
really different stock.
Speaker 2 (20:13):
Yeah, hey, just on that. So on the mortgage stress
thing that people are struggling, and as it is a
strange we're in a strange point in time really because
there are still a lot of people who are coming
off pretty low interest rates and yet the highest interest
rates are starting to fall. Is that we were just
talking in the break about taking the opportunity regardless of
(20:37):
what stress you're under to re examine your mortgage, because
I think for most people, you've signed up twenty twenty
five years, thirty years or whatever. But then you get
a better job, you maybe get a little bit of
a promotion, and all of a sudden you've got extra
disposable income, and there's that balance between you. How do
I actually enjoy life a bit more? Do I actually
pay that off my mortgage? How does it work with
(20:59):
the banks if you've signed up for maybe two or
three years fixed, but you decide you want to pay
more off A lot.
Speaker 3 (21:05):
A lot of mortgages contain a provision that allow you
to increase your repayments up to, say, you know, twenty
percent without any penalty. And that is an absolutely brilliant
idea if you can do it. If you can start
squeezing another fifty hundred dollars a week, if you're paying,
say seven percent on your mortgage, if you can increase
your repayments by one hundred dollars, you're basically earning seven
(21:28):
percent on that money because it's all coming off capital.
Speaker 2 (21:31):
And in the context of a large mortgage, if you
pay that off, say well, let's say you knock a
twenty five year mortgage down to twenty years. That's actually
quite a lot of money, isn't it.
Speaker 3 (21:40):
The amount of money that you save by doing it
is sensational. It's effectively compound interest in reverse. So rather
than pay you know, you reduce your capital faster. You
save a truckload of money over time. It's quite free.
You know yourself a little Excel's breadsheet and mock that
one up. It's quite remarkable.
Speaker 2 (21:58):
Okay, there was something we also did want to talk about.
This hour was about spotting a few in the investment
side of things. And you're not just buying something to
sit on it and do nothing with the art of
spotting a good fixer upper. Have you ever done that?
Speaker 3 (22:15):
Look? I looked at it once and I was counseled
by a good friend of mine who pointed out that
an a plus for a small wooden footstool in third
form form two woodwork does not qualify you to take
on a completely crappy nineteen twenties property and constantly and
(22:38):
rebuild it. So one of the key things about a
fixer upper is you've got to have You've got to
have a modicum of capability.
Speaker 2 (22:46):
I don't mean your own DIY. But even if you're
want to fix it up by paying people to do it,
there would be Yeah.
Speaker 3 (22:51):
But paying people to do it is a path where
you've got to be able to really got to have
the capability to put a lot of sweet equity into it,
even if it's just cleaning stuff and dig out the
garden and that kind of stuff. If you pay, if
you pay full market rate for all of that stuff.
(23:13):
You need to make sure you have fully scoped your
work long before you start it, and that you've actually
got the numbers right and you're going to come out
on the right side of the leader once you've finished.
Speaker 2 (23:25):
What do you think would be the big mistakes in
terms of you see a property that you can improve
a little bit to add some value to it. What
would be the no go areas when it comes to
accepting some sort of leeway.
Speaker 3 (23:37):
For some work structural issues. It's probably your biggie. Whatever
you allern for bathroom and kitchen, double it because and
don't fall in love with it.
Speaker 2 (23:51):
Yeah, well, if it needs a bit of a duo. Actually,
that's the thing I think do ups you probably do
tend to fall in love with because you look at it,
and you've get into it because you're getting you can
inspired by your own ideas, and you go, look at
this weekend, I'll put the kitchen on.
Speaker 3 (24:03):
The other side, and suddenly you're moving the kitchen and
then you're talking cub it money. So it's keep it
if you're going to do it, keeping in mind that
the purpose of why you're doing it, and putting in
another five the year, and another ten the year and
another fifteen. There, you've just increased the cost on the project.
(24:23):
Buy another fifty grand and are you going to get
that fifty grand back? Have you added? You know, there's
not much point on a doer upper spending ten dollars
to get back eight dollars.
Speaker 2 (24:33):
Well, I guess the adage I'm thinking of is worst house,
best street, Because if you're buying into an into a
subd that's not particularly flash, then probably buying a door
upper is not really going to help you. But if
you are buying into a street where something is a
bit of a bargain because it's the worst house in
the best street, that probably would be the time, wouldn't it.
Speaker 3 (24:52):
Yes, But but well, it depends on how bad the
house is and is the next buyer actually going to
bull it, and all of that money in time that
you've put it, you actually over capitalize them, because in fact,
the next who's your next buyer is the question you
need to work backwards from, And if your an next
buyer is going to bowl it, then that extra sixty
(25:15):
grand you spend on the kitchen and bathroom could actually
be a complete waste of money.
Speaker 2 (25:20):
Yeah, I think in the it does sound like if
you see a house and you think that it's got
great potential and you start to fall in love with it,
you probably in a bit of a problem unless you
really know what you're doing.
Speaker 3 (25:29):
Well, it's just you might you might find yourself, you know,
spending another You might find yourself moving in and that's
okay too, But again it's like keep the end in mind.
And there's a really great book called When Big Things
Get Done, How Big Things Get Done, which is worth
a read if you're contemplating a renovation project because essentially
what they talk about is all the time and energy
(25:51):
that you put into planning is never wasted. And one
of their favorite examples Who's This The book How Big
Things Get Done, and one of their favorite examples of
projects that spiral hugely out of control in terms of
cost and time, overruns and not getting the returns that
you thought you were going to our house read of
(26:12):
actions when you start on what you think is a
ten thousand dollars in the kitchen job in the kitchen
and oops, we're going to have to reparlor house and oops,
we're going to do this, and suddenly we spent three
hundred thousand dollars. It's three years later and we haven't finished.
Speaker 2 (26:26):
Well a little bit from our own point of view,
when we're doing a bit of a DIY in our
place while we're living while we're living in it, but
it's a little bit well, it does get dragged out.
But what it has sort of told me is that
you can have a time frame in mind and you
should probably double it.
Speaker 5 (26:44):
Yep.
Speaker 2 (26:45):
You might think, oh, let's get this done in six weeks,
Well it's probably going to be at least twelve when
that must be the case with just about unless you
have a team of builders who work for you on call.
Speaker 3 (26:55):
Then yeah, I guess that's where the concept of planning
the whole thing from start to finish before you get started,
is so key.
Speaker 2 (27:06):
Right, We're going to take a quick break. We'll be
back in just a moment. It's twenty three minutes to
five News Talks. It be your rules for actually, are
you someone who's good at doing houses up, you're good
at spotting something where there's a bit of improvement. What
are the areas you look at and what makes a
good doer upper versus a money pit that's just going
to be nothing but a source of misery for you
(27:27):
for the next term six months or a year or
two or whatever. It is twenty three minutes to five
News Talks, it'd be okay. A couple of other questions
once somebody has said, when is it worth breaking a
fixed term loan? Well, that is a big question. We're
not going to give specific financial advice, but what observations
would you make on that.
Speaker 3 (27:44):
That's one to do the modeling on really carefully. But
you know, when we're at the point now where you know,
if you've fixed something for five years at a really
high rate, the bank will always win as the tragedy
of this exercise, because they basically they've anticipated the future
(28:04):
and for the next five years or whatever it is
that on that on that loan, and so they will
look to basically make as much money on breaking it
as not. But if you're in a situation where you've
had a sudden shock, for example, if you halved your
income for one reason or another, it could be worthwhile
doing the mathson, I can add that to the capital
(28:25):
of the loan and it will enable me to retain
the property or you know what. The kind of bick
out of action.
Speaker 2 (28:30):
In terms of doing those calculations, I guess, well, one
you'd talk to the bank, but would you talk to
the bank or the mortgage a mortgage broker.
Speaker 3 (28:36):
I would definitely get a mortgage broker involved to help
me with a process like that, un questionably.
Speaker 2 (28:41):
Because they can well, for one, doing the numbers is
like water if for ducks back for them.
Speaker 3 (28:45):
Number two, they are good advocates, so in terms of
twisting the bank's arm to get you the best possible outcome,
absolutely I want a good mortgage broker on my side
for that.
Speaker 2 (28:55):
Gonbo is that also because well, mortgage brokers they channel
a lot of business in a particular banks direction. That
gives them a little bit. I mean there's not just
a relationship there, but there is invested interest both ways
on doing good business.
Speaker 3 (29:08):
Yeah, they've got a little bit more buying power, the
ability to kind of get a bit of deal for you.
But also they're a lot more dispassionate. So even as
a sophisticated finance professional, that's the kind of thing they
are detached from it. And we Keywis can be a
bit weird with money, right, kind of almost embarrassed to
ask for a discount a better deal because you know
(29:30):
that all the bangles think I can't afford it. Well,
they know exactly what you can afford. They've got all
your details. But we can still be quite weird about it.
The mortgage broker is quite dispassionate. They're just interest that.
They're not going to be embarrassed. They'll just go and
get you. Just go, just go for the doctor.
Speaker 2 (29:46):
Okay, another text here, Tom says, Hello, I need to
reflex And now, Tom, we're not going to give you
specific financial advice, by the way, but I always give
that disclaimer. My mortgage is due on the seventh of November,
and in terms for refixing, would you recommend to wait
a few more weeks? Well, we're not going to recommend
and anything specific for you, but we do know people
(30:08):
who might consider, Yeah, what do you reckon?
Speaker 3 (30:13):
Absolutely again, I would go and have a chat with
a good mortgage broker and you get some of get
as many opinions as possible on that kind of trajectory
of the changes. If you're particularly risk averse, you could
refix through a short period of time to say three months,
and you know, to wait and see what happens. And
(30:34):
certainly you can see a trend towards that in mortgages.
At the moment that people are taking, you know, the
short term fix is becoming much more popular then you
know about eighteen about to twelve months ago, people were
taking the longer periods of time. If you didn't fill
up on the cheap money when it was going in
set of three and four percent, that was a good strategy.
Speaker 5 (30:57):
Ye.
Speaker 2 (30:57):
How many do we know what percentage of mortgages people
actually do have a mortgage broker for I just sort
of instinctive knowledge of you know, I reckon.
Speaker 3 (31:09):
Yeah, as far as reckons, I'm really not sure. I
wouldn't have thought that there was a signal, you know
it maybe as much as fifty percent. I'm not sure.
I'm guessing actually, let's be honest, but I would imagine
it's a significant proportion if people do in some way
use a broker.
Speaker 2 (31:27):
What depends which way I look at half empty half full,
because now I know a lot more through doing the
property how around mortgage brokers that it surprises me that
you wouldn't have one because of the service they provide,
unless I guess you are someone This is where you
might struggle to get advice from my mortgage broker. If
(31:47):
you've got a small amount left on your mortgage, there's
not really a lot and for a mortgage broke, you'd
need to almost find someone who is a mate woul
because they're not going to make any money out of you,
really are they.
Speaker 3 (32:00):
Again, most good mortgage brokers, we'll look at that in
the context of a relationship, because while they might not
make a truckload of money out of you and helping
you work out how you've got what you do with
X dollars, you may be so impressed by the service
that you get from Tom and Mary that you recommend
(32:21):
them to your neighbors when they're going how do you
find a good mortgage broker?
Speaker 2 (32:24):
Of course, actually, no, you say that, I realized that
what I just said was absolutely ridiculous. Let's take a
call Steve Hello, Oh.
Speaker 5 (32:31):
Yeah, good guys. Hi a couple of well a few
weeks ago him your head on the Winston Peters of
Housing journalism called Ashley Church.
Speaker 2 (32:42):
You had a good old ding dying with Ashley, didn't you?
Speaker 5 (32:46):
I did. Unfortunately, when you're on this side, you know,
and you're here ready to be cut off at any moment,
you don't really have your your time do you to
put your point across thoroughly as you'd like to, and
instead you're really.
Speaker 2 (33:00):
I think you guys had a good chat. I think
you had you did well, But anyway, did you have hope?
You're not just calling to add to that conversation a
week or two later.
Speaker 5 (33:09):
Oh sorry, Look, they're just a slight addition if you
don't mind. Look, I just wanted to ask you about
housing affordability, because that's really what the That's what the
argument was about, wasn't it. And Ashley Church was pushing
that same old worn out barrow that housing was somehow
more affordable back in the seventies, eighties and nineties compared
(33:30):
to what it is now. That's just, isn't it. It's
all about doubling house prices every ten years, and I
was calling him out on that, and I just want
to ask your guests, does she subscribed to that, because Helen,
just a load.
Speaker 2 (33:42):
Of ah, the idea that the property market will double
every certain period of time.
Speaker 5 (33:48):
And holding is more affordable now, which Ashley Church likes.
Speaker 2 (33:53):
Well, I don't want to have to watch a crack
at at Ashley when he's not here, so well, but
I'll throw it to Helen and.
Speaker 5 (33:59):
Ready for him to come on for the second round.
Speaker 2 (34:01):
But he's hiding now, he'll be back. He'll be back.
Who were waiting for your Steve? But anyway, the whole
thing about affordability, Helen, it's a big question in a way.
Look it is with only a couple of minutes to
go before it.
Speaker 3 (34:15):
And without having a whole bunch of data and trying
I look, I do not think that affordability statistics are
better than they currently than they have been. There are
a lot more people paying a lot more than thirty
percent of their income to service their housing, which is
the definition of housing streets. My take would be that
(34:36):
there are a lot more people in that unaffordable housing
cost today than they were in the nineteen.
Speaker 2 (34:43):
Fifty so yeah, I think actually Steve will have to
come back when Nashley's on this book use otherwise because
we're literally we're literally ten to five. Yeah, we're literally
ten to five. And you probably said Steve, you will
need to call back when Ashley's on to discuss that one.
But I think the point actually was making is it's
often been expensive to buy property, whether the interest rates back,
and everyone uses the example of the eighties and all
(35:04):
that sort of stuff.
Speaker 3 (35:05):
Unquestionably it's always been expensive to buy our property.
Speaker 2 (35:08):
Yeah, anyway, but Steve, you come back, and yes, I
have put you on hold so you can't uspack because
I've got to go to the ads, But definitely call
back because you and Ashley we could sell tickets to
next time. Anyway, it's ten to five news Talk, said b. Yes,
(35:30):
welcome back to the Weekend Collective. This is the one
roof radio show my guest as Hell on a Suliman.
But right now it is coming up to six minutes
two five.
Speaker 1 (35:41):
The one roof Property of the week on the Weekend Collective.
Speaker 2 (35:45):
Yes, the one roof Property of the week, Go and
check it out on one roof dot co dot nzaid
it is nine mayor as an Miaire Road nine Mayor Road,
audi Wa in Rodney. Now it is a magical retreat
perched high above Audi Wear on a three thousand square
meter site to be precise, three and forty one square
me with panoramic views of the ocean and estuary, is
(36:08):
stretching all the way to the Crimeandle and Winuy. The
unique it's a dough decka what is it dough deckagone
living room, which means it's got a bunch of sides.
I haven't counted that already, with a high timber ceiling
designed to enhance the stunning scenery that this premium location offers.
Its estimate is well, it's not cheap one point seven
(36:30):
eight million. We've had certainly had more expensive though, one
point seven eight million, three bedroom, two bathroom, one car, garage.
And my guest Helena Sulimon, you'd have had a look.
You've had a look at it, haven't you have?
Speaker 3 (36:40):
What do you?
Speaker 2 (36:40):
What did you make of it?
Speaker 3 (36:42):
I have had a look at that. The views are spectacular. Yeah,
you can see forever.
Speaker 2 (36:47):
Actually that's probably it. The it's it's the it's the
location with.
Speaker 3 (36:51):
The viewsation, location, location, and.
Speaker 2 (36:54):
I think the dough what is it called dough.
Speaker 3 (36:58):
Deagon which, as you say, what it means is some
very complex joints.
Speaker 4 (37:04):
I love that.
Speaker 3 (37:04):
I love that it exposed timber. Not everybody likes next
both Timber Boom, but I'm a big fan.
Speaker 2 (37:10):
Actually, So yeah, go and check it out nine Mayor
Road or at one point seven eight million. Then you
can check that in one way.
Speaker 3 (37:17):
Well, that is that's the price estimate.
Speaker 2 (37:20):
Yeah, yes, I'm not saying that's what it's the estimate.
Speaker 3 (37:22):
Yeah, I'm not saying you may or may not want
to be able to purchase it for something in their range.
Speaker 2 (37:26):
Yes, I take that as being implied in my property
estimates there very good. It's not a guaranteed sort of
it's yours for that. Hey, just quickly before we wrap up.
We got about a minute to go in your the
report that's coming out Velocity in one roof about the
hot hundred suburbs. Are there particular amenities that really make
a big difference.
Speaker 3 (37:43):
Well, we've gone through and very painstakingly assigned schools to
the amenities based because amenity is a big term, right,
covers a whole bunch of stuff and shots bootsports, schools,
all the stuff that kind of makes life fun and convenient.
You want to be vaguely within striking distance, so you
know there's places to shop, places to place to have fun,
(38:07):
places to send your kids to school, and it's easy
enough to get turned from the places you need to go.
Speaker 2 (38:12):
So go and check out. That'll be out on Monday
on one roof Dot Code Audience he it and that
will be the top hundred, top hundred, So boozing and
check there the top hundred to watch, top one hundred
to watch exactly. There we go, There we go. We'll
be back shortly. Parents Squad. Next News Talk SEDB.
Speaker 1 (38:34):
For more from the weekend collective, Listen live to News
Talks EDB weekends from three pm, or follow the podcast
on iHeartRadio
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