January 31, 2025 • 41 mins
Spending on home renovations dropped by 13% last year as kiwis tighten their wallets.
Are we looking at a year of outdated houses at luxury prices?
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:41):
Hours. It's welcome back to the Weekend Collective. I'm Tim
Beverage at seven past four, by the way, for the
parents be joined by John Cown getting your kids to
(01:01):
share how everything's going at school and making those adjustments.
Will be kicking the Parents Quad off with just after
five o'clock. But right now it's time for the one
roof radio show. And my guest is see Well, he's
from call Logic and his name is Nick Good Old Nick,
how are you going go an?
Speaker 3 (01:15):
Very good things?
Speaker 2 (01:16):
Should I say? Should I saw your head of research?
I should give you the High Fluton title? Shouldn't we
thank you very much?
Speaker 3 (01:21):
Of course?
Speaker 2 (01:22):
Hey, I was, I've been. I was driving through around Northland,
you know, for a bit of a holiday, and we
went right up to Cable Bay and what actually we
went right to Cape Rianga, but I noticed neck and
we want your calls on this as well as to
your take on where the market's at, what it's going
to need to make it recover. But I was surprised
by the number of homes which to me seemed like
(01:45):
quite prime batch coastal properties. There was a lot for sale,
and I got the sense that, well, hell, look at
some of the prices and it just looked like the
property market from that point of view, wasn't on fire.
Then I bumped into a friend of mine who's got
a few property stakes around the country, and he is
just like, it's dead. It's dead as a doornail you've got.
(02:08):
We said, there's nothing going on, and he was talking
about the what's the test rate the banks do? Is now?
The test interest rates? Now? I think up to nine
percent or something.
Speaker 4 (02:16):
They should have dropped. They should have droped a bit
by now. I think might into the high sevens. I
can prove it's still tough.
Speaker 2 (02:22):
But anyway, I thought to start off with, I'd get
your take on it. But if you're listening, oh, eight
hundred and eighty, ten and eighty, what is your view
of what the property market's doing right now? But if
it's as flat as I think it is, and I'm
going to check that with neck right now, because he's
got the data, what are the things, what are the
conditions or the factors that are going to need to
come into play to make things move move a bit more?
(02:43):
And do you want to see it move a bit more,
because of course, Nick, if you are a somebody's wanting
to buy, you don't want the property market to get
too excited, do you. But it does seem it's on
the flatterir side, am I right?
Speaker 3 (02:55):
Yeah?
Speaker 4 (02:55):
I think that's absolutely right, and you you're bang on
in terms of it's all about perspective, right, perspective first
time buyers, they're quite happy to see values you know,
sideways or even falling while they're trying to get that
deposit and maybe even see interest rates fall a little
bit more, and then when they do buy, they're in
a much better financial position as well. So yeah, look
at it is an interesting time. I do think things
are essentially flattening out. There is expectation for some growth
(03:17):
this year, but not expected to be strong. And I
think to your point right, there's going to be differences
around the country. The main centers, the biggest city in
Auckland will be quite different from the other main centers
and really different to some of those rural areas or
you know what you might call those holiday or batch
type areas. They're going to be a bit different too.
And I think you know your assessment of that, saying
you know they haven't been going that well, probably makes sense,
(03:39):
I think. You know, we've been in a recession for
a long period of time. People have been squeezed with
their mortgages. They have it to tighten things back up.
There's a little bit of job uncertainty. That means they're
not going out there and buying those those hell Hoiday homes,
those batches up north. They're not able to afford it
or hold on to them, and that's when they go
to market. And if the market's not there to buy
them off them, then those prices are going to slowly
(03:59):
adjust down as well.
Speaker 2 (04:00):
Yeah, the hold on to them thing is the thing.
I look again, So you work in the work in
the area of analyzing data to the nth degree, which
it's beverage drives around Northland and goes, well, there's a
few houses for sale here. It must be some people
wanting to free up some cash. But I guess I
have hosted a property out for a couple of you know,
for a few years now, so maybe I've I tend
(04:21):
to click into certain ideas and things, but they could
be wrong. But were those observations sort of what the
data is telling us?
Speaker 3 (04:28):
Yeah?
Speaker 4 (04:28):
I think it is, and I don't think you should
underestimate the value of actually seeing what's happening out there.
One of my examples is, you know, I can sit
here at my desk all I want and analyze all
the numbers, but if I was to buy a house,
there's nothing quite like being out there, going and looking
at open homes, going and seeing what's for sale, what
prices properties are selling for. That's a hugely important part
of it too. So the data doesn't always tell the
(04:49):
full story. I think that genuine experience and seeing it
and seeing the houses and knowing the location and you
know what amenities or what are the attractions in those areas,
that's a huge part as well. So you do need
to balance all of that together. But I do think
some of those smaller areas they are probably the in
for a little bit longer period of maybe that sideways movement.
I mean, the one comparison I make, And it's not
(05:10):
always perfect because the global financial crisis and property prices
through that period of time will be different to what
it is this time around. There's different reasons, different factors
that have affected the economy then and now. But remembering
back to that, it took an average of seven years
for values to get back to their peak price in
two thousand and seven, but it was even longer for
(05:31):
the smaller areas where there just isn't consistent levels of
demand over multiple different economic phases.
Speaker 3 (05:38):
I guess.
Speaker 4 (05:39):
So it can take long in those smaller areas than
the big cities, who tend to attract more migrants, have
more jobs, have a more robust economy. You're lucky to
see those areas bounce back.
Speaker 2 (05:48):
First, What is the data telling us? And in terms
of core logic, how you know how? Because obviously house
is sold today how quickly until you guys have it
as part of your record keeping.
Speaker 4 (06:02):
Yeah, I mean we have a number of different processes
is to get data into our database. Some of those
reply on the official provision of that data to us
via councilors, but we also have some calling sales programs,
so we call up and find out what they're probably
sold for straight away as well. So we do our
best to have as much data as soon as possible,
and then we feed it. In terms of measuring value
(06:23):
change over time, we feed all the data we can
get into our home value index, which is essentially an
aggression model that looks at how values are changing over time.
So we just released our data for January and we
saw the values of our zero point one percent nationwide,
but only zero point three percent over the quarter. So essentially,
(06:44):
like you said, essentially flat nationwide, slightly down over the
annual period. But as I said, it looks like things
are kind of founder trough with the potential to see
some growth coming through this year as it igistrates for.
But a confidence comes back and we see people back
in the market.
Speaker 2 (06:57):
And I know we had these conversations before, you and
I about obviously your prime role is and data analysis,
and it's a tool for people to draw the our
own conclusions. But do you if you look back at
maybe our last two or three conversations over the last
few months, has the is the market in a place
where you would have expected it to be or are
you kind of surprised that it feels possibly a bit flatter?
(07:21):
And look, there'll be people listening to this throwing things
that the radio going, oh, beverg just doesn't know what
he's talking about. You know, things are pumping. I'd be
surprised to hear that. But are you surprised where we're
at now.
Speaker 4 (07:31):
In some areas there will be a bit of growth
already come back as well. You know, I think, you know,
we looked at a Hamilton from our house prices next
grew zero point five percent last month, so there will
be pockets of this of course, you know, one figure
nationwide doesn't tell you the full story of all these
different cities and towns across the country.
Speaker 3 (07:47):
I think, yeah, we were expecting a bit.
Speaker 4 (07:50):
More or probably the trough to come sooner, so more
towards the sort of third or fourth quarter last year,
and maybe some growth to come back at the end
of last year. Never really eventuated, so it's probably a
little bit behind the cycle. I was expecting. This trough
has been drawn out a little bit longer, and that's
probably because our economy has been struggling. There is worse employment,
(08:11):
our labor market isn't strong, not expected to grow or
do much better in the next couple of quarters either.
So I think it's just this, these difficult economic conditions
have meant that even though interest rates have fallen, which
should be a boost for the property market, it hasn't
really eventuated that way because the rest of the settings
haven't really lined up for that growth to come through.
Speaker 2 (08:30):
Okay, I want to dig into that because I also
want to find out a bit more about the about
what the data is revealing around the country. But if
you're listening O eight hundred eighty ten and eighty, what
do you think it will take for the market to
get just And I don't want to talk in extremes.
You know, we've seen extreme growth in the market. I
think maybe those days are well over for a while yet.
But what do you think it will take to actually
(08:52):
kick things along a bit more? And I guess, firstly,
what do you think it would what what would the
indicators be from a data point of view that would show, Okay,
we've seen another zero point five percent drop in the
cash rate, or we've I've seen a bit more productivity
in the economy. As if you want less people losing jobs,
maybe for more people being employed. What are the things
what are the mix that you've observed over the years, Nick.
Speaker 4 (09:15):
Yeah, I'd say the number one thing I'm looking for
is our affordability measures, So how we measure what affordability
is like? So that can be as simple as house
price to income ratio, which has improved over the last
couple of quarters. So the house price to income ratio
today sitting at seven point four in New Zealand. Now
that's still up on the a twenty year average which
(09:35):
was six point eight, so it's still above that long
term average.
Speaker 3 (09:38):
Maybe has to come down a little bit more.
Speaker 4 (09:41):
But also we look at that share of income required
to service a mortgage today because that takes into account
interest rates, which the first measure doesn't. That right now
is sitting at forty eight percent, so on average to
service a mortgage and eighty percent loan to value ratio
mortgage today, it takes forty eight percent of the average
household income to service that mortgage based on the average
(10:02):
property price, really high, Hik, Yeah, exactly, it's come back
a little bit, like it was above fifty for a
good couple of quarters most of last year, and it's
still above that long term average of forty three percent.
So I think that's where you know, those interest rates, Yes,
they've come down from those peaks, but they have to
go down a bit further to rarely make that number better.
And then you have more people available to buy a property,
(10:24):
then a bit of competition comes through and suddenly you
start to see you know, two people bidding for a
property and prices start to lift the gain. So that's
the number one thing I agree with you. You know,
other economic situation, you know, employment, all those things matter too.
But for me, if you can look at one measure,
when is that affordability figure, all those figures start to
come closer to that long term average.
Speaker 2 (10:43):
I guess because the next question is kind of related
to a bit of a bit of a guestimate on
your part as well, because it's not so much data related.
How much do you think rhetoric and public perception play
a role? So you know, when I think of the
economy right now, I see lux and talking it up
and say we're going to do this, But the vibe
(11:05):
that I get is that we're not the so things
still feel a bit crappy. But I have been told
by property experts that it's a mistake to think that
the rhetoric really means much because in the end, the data,
the affordability. What people think is you know, how much
does the doom and gloom influence it? In your view?
Speaker 4 (11:24):
I think there is an element of it. I think,
you know, if everyone's feeling good and they're being told
there's good reason for growth to come. So I don't
think you can just have a willingly you know. Yeah,
and phoma kicks in all those things, right though. That's
why they're there, because there is a psychology to buying property.
You know, there's a number of reasons you do buy it,
and it's one of the you know, it's one of
the reasons. I suppose it does better than other things
(11:46):
because it serves multiple purposes. It's an investment, it is
a roof over your head, so that's why it gets
a little bit emotional as well, rather than which should
be a typical economic conversation of demand versus supply, and'll
that'll see where things get to, right, It's not quite
that simple. And there are other things that play on that,
and that is expectations around capital growth, which can be
influence by, you know, by the government and conversations they have,
(12:09):
by expectations about what regulation might change in the future,
and around things like expectation of long term interest rates.
So we see the forecast on a reserve bank around
where the ocr might be in a year or two time.
They will influence how many people say, well, if I
get a property today, are my interest rate payments? My
mortgage payments going to be similar or could they be
quite different in future. And if you if your financial
(12:30):
situation is also maybe not one hundred percent sure, then
also you're going to be cautious and conscious about it.
So I do think that there is an influence of
you know, the vibe if you want to call it that.
But you're right, the pure financials, the pure financials are
going to overrule everything, but then the vibe can take
over once we start to get some momentum one way
or another.
Speaker 2 (12:49):
I'd love to know how many of my guests on
the show have seen the Castle. I can't remember. There
was a politician I was talking to I mentioned the
vibe when they went with it the vibe your honor,
it's marbo.
Speaker 5 (13:02):
Hey.
Speaker 2 (13:03):
So in terms of the data that you and lies,
how what sort of view do you take of what's
happening in internationally and when I when I asked that
specific reason for that is that people have talked about
with the Trump presidency and you know, it has a
positive effect from business's point of view, but it does
(13:23):
have an inflationary effect in the States, and if there's
inflation in the States, that affects what our cash rate's
going to be here. Ultimately, I don't know how to
draw all the lines, all the dots, which brad Olsen
would probably do maybe you would as well. But do
you follow that that sort of data and does it
tell us anything?
Speaker 3 (13:43):
Yeah?
Speaker 4 (13:43):
I think you know, you can't get away without having
some level of understanding and insight as to what's going
on overseas. You know, we are still a small, tiny
nation that's going to be affected by big international situations,
whether it's you know, the wars that are going on,
China's economy, how it's performing Trump becoming president, all those
things do have an influence. I think that, you know,
we're pretty lucky in the sense we can watch what
(14:06):
the Reserve Bank season does. They are relatively transparent, they
can they take some verified criticism sometimes. We do get
a pretty good feel for their read on those international
things and what it means for us and how that
might influence where registrates go.
Speaker 3 (14:20):
And I think that's the key for me.
Speaker 4 (14:21):
For most people they're fixing their mortgage for two years,
that's the thing they really want to know, and that's
how they can sort of break down all that technical
information that's off over most people's heads. And you don't
need to know it, but having an awareness about those
things because they pose risks. And often the economists will say,
you know, there's some upside risk to our forecast or
some downside risk to our forecast, and if this happens,
(14:43):
you know, x y Z, China goes into greater recession,
then that's going to have an influence, you know, downwards
on our cash rate or whatever it might be. So
I think just being aware that no one knows the future,
but understanding those potential risks, then you can put your
own judgment on to go I've got full confidence in China,
or I'm not worried about Trump in America, or you know,
whatever it might be, then you can start to put
your judgment on top of those those scenari I guess you.
Speaker 2 (15:05):
Know, I see if I was as a punter listening
as well to what you just said, that tells me
we're in for a little bit of uncertainty for the
next two or three months. Because I've got tariff's rolling in,
We've still got global we've got global uncertain m terms
of the war in the Ukraine and things like that.
It does feel, which means makes me feel if I
was a buyer. I've got a bit of time. But
(15:26):
tell you what, I'm not going to throw that to you, Nick,
I'm going to throw that to if you're listening right now,
we'd love to hear from me. Oh eight one hundred
and eighty ten eighty. The market is a bit flat still,
there's a bit of uncertainty globally and all that sort
of thing. I don't want to paint too much doom
and gloom because I am no economist. Even though my
C plus says I did pass stage one could have
been a C minus, to be honest, plus minus. Who cares?
It was a seam?
Speaker 4 (15:48):
What's that seas get degrees?
Speaker 2 (15:52):
You can go to a tiger, did you?
Speaker 3 (15:54):
Yes?
Speaker 2 (15:56):
Anyway, Well want your cause because I want to know
if you are sitting there watching the market, are you
actually thinking it's the start of the year and you
think in a minute, I'm the market is actually quite
a bit flat. Properly, private prices haven't got moved that much.
I've got time to sort my act out. Are you
What is it going to take for you to get
off your chuff and actually do it? But also, what's
(16:17):
it going to take for the market to just maybe
get a little bit more activity in it to give
us a call. We'd love to hear from you, your reckons.
It's twenty three past four news talks. He'd be surfower.
Speaker 5 (16:30):
Well, my name and sen talk to myself for hours,
sit things you don't understand. I can take myself day again.
Speaker 2 (16:47):
Money in the feb guess. Welcome back to the Weekend Collective.
I'm Tim Beverage. My guest is head of research at
Carl Lodge. Is Nick good Or we're talking about, well,
what's it going to take to get the market moving?
I will respond just quickly before we carry on. Somebody
sent me a text saying, why would you want the
market to take off? The only winners will be investors.
(17:09):
The media are obsessed with property always rising. Thanks Steven, Well,
I think if you had listened to close more closely, Stephen,
we were saying it's a matter of perspective, weren't we next,
Because if you are someone who wants to buy their
first home and live in it, then you're quite happy
for the property market to be a bit well, you know,
a bit crappy for a while, but slow, maybe hoping
that interest rates will drop a little bit but things
(17:31):
will still be a bit suppressed. But of course, if
they're waiting for that drop in interest rates, that might
not necessarily that that is a stimulus effect, isn't it.
Speaker 4 (17:41):
Oh yeah, for sure, Yeah, I think you know, we're
all looking for February nineteen. I think the data is
when the Reserve Bank next meets to decide the next
step of the ocr heavily expected to be another fifty
bases point four. So that's going to make things, you know,
pretty low still, maybe with some way to go throughout
the rest of the year, but it might slow down
in terms of the rate of cuts.
Speaker 3 (18:00):
That we see later on through the year.
Speaker 4 (18:03):
And most of that cut has probably already been baked
into some of the one and two year rates that
the banks are offering anyway, So I'm not expecting to
see huge shifts in those rates even following that date,
but still expectation that we've got some room to move
and some further force to come in the socio for shore.
Speaker 3 (18:17):
Sure.
Speaker 2 (18:18):
All I can remember is that remember the time when
was it sort of May last year where Adrian or
said that he wouldn't be cutting interest rates until this year,
And how much has changed and if the Reserve Bank
can get it that wrong, then what hope was there
for the rest of us?
Speaker 3 (18:35):
Yeah, it changed quick. Yep.
Speaker 4 (18:36):
I remember back to then too, and yeah, amazing how
much I think it was between their march and may
you know statements they put out they flip flopped completely.
Speaker 3 (18:43):
And yep, things change.
Speaker 4 (18:45):
Data changes that the data they were seeing had changed,
So you need to you need to make your assessment
a little bit different.
Speaker 3 (18:50):
But yeah, the dramatic change certainly brought a lot of
criticism for them. It's for sure.
Speaker 2 (18:54):
I feel a little bit just to be contrary, and
I don't think it's going to be point five of
a point. I think it's going to be point twenty five.
I think for some reason they're just going to go
They're going to go on the brakes a little bit,
and they're going to do it in dribs and drabs.
Speaker 4 (19:04):
That a reasonable guess, I suppose. You know that the
big counter to that is just seeing how much the
economy is struggling, you know, with there's so much conversation
right now about the labor marketers is doing it tough.
We are still in another recession, which, if you want
to look at it and I'm not a big fan
of the definitions of a recession. You know, it's felt
(19:26):
like a recession. People don't feel confident. You know, we're
not seeing great amount of jobs being created. You know,
it's recessionary times. There's no doubt about that. So it
needs some support, and absolutely the best way Reserve Bank
can offer that is through monetary policy by dropping the
ocr So I just think there's probably too much evidence
there of a struggling economy that needs support for them
to not do it. But there, you know, there'll be
(19:48):
a chance of a twenty five and as you said,
you know, first first chance, they meet again in six
weeks time.
Speaker 3 (19:55):
From there they can always go again. Then. So yeah,
well that's what I was thinking.
Speaker 2 (19:59):
But I do take that as your very kind way
of going good Trium. But now it's going to be
point five zero.
Speaker 4 (20:05):
I suppose you know, I wouldn't be be good at
my job if I didn't look at every possibility. There's
a few times here I've been very strong and calling
one way or another or a certain amount, I've got
it wrong.
Speaker 2 (20:15):
And what's your worst ever? What's your worst ever call
where you've gone, Oh, this is going to happen and
then you're like, oh, keep my head down as I
walk into the office.
Speaker 4 (20:23):
I think it was last year and I was speaking
to a group in total longer. There's been one hundred
people there and the Reserve Bank was meeting the next day,
and I basically said I'd buy them all a beer
if I got it wrong. And I can't remember what
the decision was now, but I think I said it
would only be twenty five. There was no way they
did fifty, and then of course they went fifty. So
I had to call up the organizer and say, yeah,
I'm not coming back to toto On because I don't
(20:43):
want to pay those beers.
Speaker 2 (20:44):
A good one hundred people. That's doable at least, but
it's still a bit of it. It's still a bit
of a blow, isn't it.
Speaker 3 (20:52):
It depends I put it on my card or call
Logics CUD.
Speaker 2 (20:54):
I guess, ah, yes, yes, yes, yes exactly. I think
I know which way i'd go with that one. Hey,
look on the property report, you say, the core Logic's
latest reports coming out for January. What as you say? What?
I think you said that the on average the medium
prices down across the board zero point one percent. Was
that right?
Speaker 3 (21:13):
That's right?
Speaker 2 (21:13):
Yeah, what is the what are the Are there any
standout surprises or interesting stats that came out of that report.
Speaker 3 (21:21):
At the main center level.
Speaker 4 (21:22):
I think it's not necessarily a surprise, but it's a
continuation of the struggling that we're seeing in Wellington. With
point six percent of a decline in that one month
for Wellington, so we're still seeing values fall away, you know,
at a decent clip, I would say for Wellington, but
most of the main centers are essentially flat. They were
like point one percent down or point one percent up.
Speaker 2 (21:41):
If you go down to this sort of the month,
isn't it that's for the month.
Speaker 3 (21:44):
That's the month that is over the month.
Speaker 4 (21:45):
Yeah, if you go down to the next tier, you
know the main urban areas that are sort of you know,
still cities, but not those main sixth centers that we track.
You still you see some growth in New Plymouth point
nine percent over the month, so that was quite strong.
But they know the areas around Wellington Lower Hut was
down point six percent as well. But it doesn't look
like there's many the clients happening outside of Wellington. Gisban's
(22:07):
one that does jump out point five percent decline, but
everywhere else was a flat or a little bit of growth.
Speaker 2 (22:12):
And Hamilton you mentioned, was that that was actually a
reasonably good performer, was it.
Speaker 4 (22:16):
Yeah, point five percent up one point six percent over
three months. So yeah, it looks like Hamilton's kind of
you know, maybe seeing that trough a few months ago,
we're actually seeing some growth back in that market more
attractive from an affordability perspective. So it's those those things
we were talking about earlier, where people are going to
find value in these markets, earned decent coin, maybe they
know maybe they can earn decent money living in Auckland
(22:38):
and able to buy an investment property, for example, or
they're working remotely so earning good coin but being able
to live live in Hamilton.
Speaker 3 (22:44):
You still have got access to Auckland as well.
Speaker 2 (22:46):
Yeah, I've got a text to who's actually reminded me
of that because you might not know this, but ages ago,
when Tim Roxboro was my co host, I talked about
how I watched the market going on. I thought a bit, you,
Hamilton's really going to go. And I didn't do anything.
I just watched Hamilton really really go. And so one
of My text is that said tim house prices and
Hamilton your favorite investment town starting to climb. I'm serious,
(23:09):
is David, Why would Hamilton be popping up as a
place where there's a bit of growth that we they
might be happy with.
Speaker 4 (23:18):
Yeah, well, I mean, you know, it depends who you
talk to. I guess you know, some people are are
going to be strong supporters of Hamilton on its own,
and there's no doubt that it's a large city, so
it does have strong appeal again from a job's perspective,
you know, from what you get from a large city.
I think that the darts is going to be there
later in the year so they can attract big events.
But then when you look at affordability the average price.
Speaker 2 (23:40):
Later in the year. What was that you said that
what the.
Speaker 3 (23:42):
Darts, that there's a dart there?
Speaker 2 (23:45):
I thought that was some sort of abbreviation and data
you literally means the literal darts.
Speaker 3 (23:53):
Here's the National Darts whatever it is.
Speaker 2 (23:54):
By the way, they've got the Hamilton Festival in two
weeks starting. People get along to that as well. So yeah, Hamilton,
it's all it's all happening.
Speaker 4 (24:00):
But those big cities they do have you know, they
who have big things that go on, they have big events,
they'll they'll get concerts, they'll get sporting events. And then
when you look at the property prices, you know, the
median value is just under seven fifty When you compare
that to Auckland at one point zero seven mill, you know,
there's quite a big difference there. And I'm not saying
they're comparable cities. They're massively different in size. But you
(24:23):
know the fact that we don't always have to go
into the big city these days, but Hamilton still has
that attractiveness to be close to Auckland if and when required,
if you've got clients there or whatever, those things are
going to start to appeal. So and you know you
can't get away from that. That road that got put
in and completed, was it not last year the year before?
Like that just changed the game with commuting, right, so
when you do have to do it, it's not a drama,
(24:44):
it's not a big problem and you can get there
pretty quickly. So yeah, that'll that'll be that'll be a
big part of why Hamilton has seen that growth.
Speaker 2 (24:50):
Are there any signs that you see within various markets
where there's a certain where you think it's there are
some precursors to a bit of growth, or is it
the data doesn't tell you anything apart from it's just look,
it is what it is. Where I'm more interested, you'd
be more interested and the economy, job growth and the
cash rate.
Speaker 4 (25:09):
Yeah, well luck any I suppose you know financial investor
investment manager. They'll say that the past returns doesn't predict
future returns, so you.
Speaker 3 (25:17):
Can't always look at that history.
Speaker 4 (25:18):
But I think it's hard not to let that affect
how you'd feel about expectations of the future, you know,
whether that's we're going through a similar phase do we
have in the past, or whatever it might be. But
I totally agree with your point that you're going to
be someone that wants to understand a local market is
to understand what is the key driver of that economy.
So for Wellington, we know it is supported significantly by
(25:39):
government and so it's not doing so well right now.
Those areas of the country where they're supported quite well,
whether it's a tourism area, those that are still supported
by farming, they're still looking okay. So those areas where
there's no real concern about future employment is likely to
see greater bounce back in those areas. And then I
think you're still going to come back to some of
the stats which do tell you where where does affordability sit?
(26:01):
And what's really interesting with that one, And I'm based
in Wellington, so maybe I'm a little bit biased here,
It is that Wellington has actually almost come back so
far now that it looks more attractive from an affordability perspective,
whether you're looking at value to income ratio a proportion
of income required to service a mortgage than many of
the other main centers now because it does have high
average income and values have actually fallen for a bit
(26:23):
further than other areas. So that might mean that once
there's confidence back in government, government spending, government's back employing,
and you know, we start to maybe see some growth
come back in that part, that Wellington might be pretty
well set to see some growth occur.
Speaker 3 (26:36):
At the other and the other side of women.
Speaker 2 (26:38):
I'm hearing some optimism from our Wellington based expert there
as well. Didn't you have some stuff about the pipes
being fixed as well? There's been some more you've had
some positive news on the pipes, they haven't you?
Speaker 4 (26:49):
Was that lower heart there probably is, But honestly, down
the road from me yesterday that a massive, massive pipe
just blew as well, and so the water's.
Speaker 3 (26:57):
Gone bad and I don't even want to go down
that one.
Speaker 2 (27:00):
Let's be honest, Okay, right, hey, look we might take
a moment. We'll come back. We'd love your calls. One
hundred and eighty ten eighty. What you'd like to see
with to get the property market? But also what does
it take for you? What do you need to see
to feel comfortable either buying or selling. Obviously, if you've
got your market on the property, if you've got your
property on the market, then of course all you need
to do is get an offer that makes that's what
(27:21):
makes you comfortable selling. And there are plenty of properties
I gather on there. In fact, we might dig into
that a little bit with Neck in terms of the
number of listings in just a moment, because I'm sure
he's across that as well. It is twenty three minutes
to five news talks. He'd be grandness, yes, and welcome
(27:53):
back to the Weekend Collective. This is the wonder If
radio show. I'm Tim Beverage of my guest is Nick
Good or he is head of research at core Logic.
But don't forget after five John Cown with us before
the parents Squad, getting your kids to share how everything's
going at the out of the year, all the changes,
and also what are the movies from your childhood your
kids should or shouldn't watch? Should I say, because I
can think of a couple myself. But right now back
(28:14):
to the wonder with Radio Sha Nick. Actually I just
want to pick you up quickly, not pick you up,
but with your recent report, core Logic's report into January,
the headline that went out with the press release was
housing market close to a trough, which does to me
contain a hint of a prediction that maybe we're not
(28:36):
quite in the trough yet. And I had missed that
when I was going through the report, and I thought,
hang on a minute, there's the headline not there yet.
Is that a form of prediction for you guys?
Speaker 3 (28:45):
Yeah, I think so.
Speaker 4 (28:46):
I think it's about setting expectation for what direction of
travel we expect the values of properties to go next.
And yeah, you know, you could probably split hairs on
one point one percent fall and say it's essentially flat.
We do revise the index each month too, so as
we get more data for January, we will re update
that data and it could well then be at points
zero percent as well. So I think we're sort of
(29:08):
safe to call it there or thereabouts, okay, And most
questions now are about, you know, what does the next
direction look like and how steep might it be if
it does turn to a growth phase.
Speaker 2 (29:18):
Because I think the question for people who are looking
at buying and making the in and they obviously the
holding back now because the market's not in a frenzy,
but is this would involve I know we ask a
lot of you on the spur of the moment in
a way, but when the cash rate gets keeps reducing,
at some point there is a happy point where affordability
(29:39):
is just fantastic. But there will be people who are
holding off for a cash rate drop. But then if
the proper if the market increases, then suddenly the affordability
is no you know, better off because you've paid more
even though you're paying a smaller interest rate. Is there
are there observations in the past about that sweet spot
(30:01):
before affordability gets away from you again, when you know
we see that trough work through.
Speaker 4 (30:07):
Yeah, it's probably never that clear cut and it's going
to be different over different phases. Unfortunately, if there was, Yeah,
that would be very nice for all of us trying
to pick that trough and to pick when we're going
to hit those turning points in the market.
Speaker 2 (30:20):
I guess, how quickly can it get out of hand
where you think, okay, got the cheap interest rates and
you're like, well, sorry, you should have been looking three
months ago.
Speaker 3 (30:28):
Yeah.
Speaker 4 (30:28):
I think for buyers of property, the actual cash right
at the time probably shouldn't be the greatest reason for
why you're buying. You want everything else to be lining up.
It's obviously really important for current mortgage holders as to
when you pick a certain fixed rate, that's going to
be really important, and that's why we saw people float
for a couple of weeks before they then fixed after
(30:50):
the cash rate change.
Speaker 3 (30:51):
But for someone that's looking.
Speaker 4 (30:52):
To buy, I'd suggest that you should buy when you're
ready and when you can afford to pick up a
property for a price that you can afford, and not
to try and predict the future and go, well, if
we missed this one, but we know that helf down
the road is going to come up, or it's already
you know it's auctions next month. You know we could
get that for a better price. I think you're sort
of playing the wrong game. You really want to go
(31:13):
into it with what can we afford and if we
can get up for that price, be happy with it,
even though a week later it might have been cheaper.
Speaker 2 (31:19):
That's almost analogous to what you were talking about as
a data in our analyst that sometimes it's good to
get out in the market. If you are sitting there
just playing with numbers and looking at trade me and
with the one roof website for properties, and you've got
this number in your head and you've got your savings,
unless you're starting to look for something you're not ready,
would that be a fair analogy. You need to get
(31:40):
out there and start being a participant.
Speaker 3 (31:43):
Absolutely, you know.
Speaker 4 (31:44):
I think the first thing is to make sure you
know how much you can borrow, right, So you need
to go and talk to a bank or talk to
an advisor, find out how much you've got, and then
look at properties in that range. And yeah, like I say,
nothing beats that time of going and looking at properties
and going what would we pay for this? We pay
eight hundred and it's sold for nine hundred Okay, you know,
we value things a little bit differently than the market.
But the other property that has something to done, no
(32:05):
view or you know, offstreet parking, whatever it is, we'd
pay a little bit different for that. So I just
think you can't beat that time of looking at it
yourself once you know what your level is, especially if
it's for a first home, right like you're going to
be there for a long period of time. Squeaking out ten,
twenty thirty, even fifty grand probably isn't the most important thing.
It's about do you want to live in this house?
Speaker 2 (32:24):
Yeah? In fact, that probably what we would discern from
that is that if you are someone who wants to
get into the market and you're thinking about it, then
you really should be getting cracking. Don't have to make
an offer tomorrow, but just start looking and getting into
the world with it.
Speaker 3 (32:39):
I guess you start doing your research.
Speaker 2 (32:42):
Yeah, hey, just before we get on to some of
the techs that have come in, what's happening with Queenstown
and aw and our town. Just to depress me because
that's always my fantasy purchase, which will always be a
fantasy purchase.
Speaker 3 (32:54):
But there we go, Well, what's depressing about it just
the high prices.
Speaker 2 (32:58):
Yes, the fact that the house I really want is
probably about six million bucks.
Speaker 4 (33:04):
Yeah, well, I mean Queen's down Queenstown Lakes region. Obviously,
it seems to be a market all on its own.
It doesn't really follow the same cycle as any other
part of the country. You know, I would call it
our only other international center outside of Auckland that's truly
understood and attractive to people internationally and knowing and you know,
we just haven't seen that same decline and values in
Queenstown that we have across the rest of the country.
(33:26):
So the median value there of a property is currently
one point six three million dollars. You know, that's compared
to Auckland, much bigger city, you know, much more, you know,
a greater economy itself, sitting at one point zero seven. So,
you know, it's just all out of its own and
we've still seen growth. You know, in the last year,
we've seen growth in Queenstain of two point four percent,
(33:47):
and there's not many parts of the country that have
grown in the last year.
Speaker 2 (33:50):
I actually was going to anticipate that. I'm surprised that
actually was that low actually, to be honest, but yeah. Hey,
by the way, people want to get a hold of
your report that for January and other ones, because there
are all sorts of services people can pay for. But
you do have information available to the public, don't you.
Speaker 3 (34:08):
Yeah.
Speaker 4 (34:08):
The good thing about the research team stuff, the reports
we put out, the house price and disease that Calvin Davidson,
our Chaffick chief economists puts out, they're all available on
the website. So you go to call Logic dot co,
dot and z and our research and news tab and
all of that stuff is freely available to go and get. Yes,
you can get granular, you can buy property information, but
for the high level reports, anyone can go and get
(34:29):
that whenever they like.
Speaker 2 (34:30):
And your reports called the NZ hedonic home I keep
on thinking hedonistic, but what does hedonic mean?
Speaker 4 (34:36):
Yeah, that's just the type of regression. So it's just
the way that we calculate which properties have sold and
how we allocate that to all properties. So the most
important thing we're measuring house price change over time or
home value price over time is that you do it
for all properties in that area and don't look at
a median sale price, because that only tells you what
happens to have sold, and this gets you around that,
(34:57):
so you're not just looking at suddenly one month property
sold and last year it was all these cheap ones.
Looks like massive growth. It's just not the case. You
need to use an index. And that's the key point
that Hadonic model does.
Speaker 2 (35:07):
That makes it a particularly useful set of data. Actually,
because that's the medium price always does my head in
because as you say it, it's got its limitations, doesn't it.
First text actually just says that they loved you, saying
darts in Hamilton is a slang for data, but of
course you are literally referring to one Ordred and eight.
Are you going to be going to that?
Speaker 3 (35:27):
Not my mate.
Speaker 4 (35:28):
Just the reason it's on top of my mind because
I've got a friend in Hamilton who was saying you
should come up for the darts in November and I
was like, I'm actually going to the World Darts in
Auckland in August. Okay, so yeah, they're everywhere, it's all
over the show. But yes, I love those type of events,
so looking forward to it.
Speaker 2 (35:44):
Excellent. Okay, a few texts here, I'm going to look
into my crystal ball says this personal allow out a
few predictions. The elephant in the room AI. I don't
know how that's going to relate. America will achieve AI
supremacy or AG I and know what they're talking about.
They're saying China will invade Taiwan, America will do nothing,
Intel stocks will outpace in Video, and Russia all back
(36:05):
down and become a USLI. I don't know if there's
any of this is useful for our property predictions, but
actually how much of our property market does rely on
a bit more global security?
Speaker 4 (36:18):
I mean, I think it's kind of like I said before,
you need to be aware of all these things. But
you know, one line is like that saying each of
these things are going to happen with not much you know,
insight as to how or why they expect those things
to happen is probably not that useful for me. Our
point always at Call Logic is that we will tell
you our expectations of what we expect the market to
do or which buyers might be more active, but we'll
(36:39):
always tell you the thinking behind it as well. And
one of the things we're expecting to happen this year
is that we've seen quite a decline or less activity
from people moving house in the last two years. So
our expectation this year is that there's a bit of
pent up demand of people who have gone through similar
life stages that have changed. They would have liked to
move house and they couldn't or we weren't sure to.
(37:01):
But now they will want to as they as they
start to see, you know, things get better, confidence improve,
you know, finances start to get better, they might start
to be out there and start to move house as well.
So for agents out there, even for mortgage advisors, you know,
they might start talking to those clients who bought a
property seven years ago that now outgrowing it and moving
to the next one as well. So I like that
storytelling element of saying we think this will happen because
(37:23):
of this XYZ excellent.
Speaker 2 (37:24):
Hey, look we need to take a moment. We'll be
back and just to tick. We're with Nick good Oh.
He is head of research at Call Lodger. Come Tim Beverage.
This is the one roof radio show. It's ten to five. Yes,
news talk, said b it is. This is the one
roof radio show. It's seven minutes two.
Speaker 1 (37:36):
Five, the one roof property of the week on the weekend.
Speaker 2 (37:41):
Collective Well the thing that stands out about the one
roof property of the week, and don't think you can
go and check it out on one roof dot curder
en z is. It's got an RV and then it's
got a price guide. And if you look at the
RV and then you look at the house, you go
that doesn't make sense. And then you see the price
guide and you go, ah, I can see. So the
RV is one point nine million, the price guide says
two point nine million plus. I think the plus is
(38:03):
relevant because it is a dunning house. It's in It's
thirty seven Frederick Street, Hillsborough, Auckland City. It's four bedrooms,
four bathrooms, four car garage. It's I always don't know
how to explain it, but it is one of those
houses if you love something where something looks beautifully designed
and has a strong flavor of a bit of a
(38:25):
genius architect. It's got floor to ceiling picture windows. There's
it's bathed in natural light. I'm reading partly from the
blurb but also from my observations. It's got an outdoor
right dining area. It says seated set beneath an arbor
of established plantings. But I don't know how to describe it,
(38:46):
but it is a stunning property and you should go
and check it out at thirty seven Frederick Street. Aren't
Nick Goodall, head of research at core Logic. You don't
need any data on this one, Nick, But what do
you reckon?
Speaker 3 (38:57):
Yeah, she's a beauty.
Speaker 4 (38:58):
She looks rather the unique and you, like you say,
nestled amongst the bush there, it's like, right, just lop
them in the middle of a bunch of trees, so
you sort of it looks like you'd feel like you're
all by yourself as well, So even though you're in Auckland,
it doesn't look like you've got too many neighbors there either.
Speaker 2 (39:12):
It does look like a hell of I mean it
says so r V one point nine, Price Guide two
point nine. I've got to think it's got to be
a lot more in that one. It looks pretty flash
unless I'm missing something.
Speaker 4 (39:24):
Yeah, I mean, I find it impossible to try and
put a value on anything that's over two million dollars anyway,
because I'm certainly not looking for properties in that in
that realm, and I suppose want to get to that uniqueness, right,
you're going to have some Yeah, people that'll probably want
it quite desperately. They'll see that sort of house, they've
fall in love with it, and if they've got the cash,
like you say, could well be looking at three million
million plus And yeah, they've done a great job with it,
no doubt about that.
Speaker 2 (39:45):
Yeah. And the landscape, well there's an intense amount of
landscaping that's gone on as well. So if you're in
the market for a house, or if you like me
and many people, you'd just like to turn up to
a home and have a bit of a nosey, I
would be tempted to go and have a look at
that one. So it's thirty seventh Frederick Street in Hillsborough,
Auckland City. Hey look we've only got about a minute
to go next, so this is a bit unfair. I'm
(40:05):
going to throw this last question at you. It was
a text that just came in. What about migration? What
do we need to see there to see a kicking
up with the sixty seconds to go?
Speaker 4 (40:15):
Yeah, yeah, great, great point, and that's obviously going to
feed into demand for housing in New Zealand. It has
reduced a lot, but it's still net positive. We're still
seeing more people come here than the amount of people leaving.
And we talked earlier about the potential influence of Trump
and that's going to influence businesses and profitability and all
those things. It also might force some Americans that want
to look abroad, and New Zealand will be pretty attractive
from that perspective too, especially if our economy.
Speaker 3 (40:37):
Does start to improve. So it is a factor. It's
demand for housing.
Speaker 4 (40:41):
The more more migration means we need more houses, and
otherwise you're going to see demand for housing, even for rentals.
The more people looking for rental properties means that investors
will likely be able to charge a higher rent so
that numbers start to stack up for them. So yet
all feeds into demand for sure.
Speaker 2 (40:56):
Excellent. Hey Nick, thank you so much for your time.
People can check out your work on core Logic, dot
cod and inn z. Check out their January property report
and it'll have it's got some great information there for
you and you can check it out podcast. If you've
missed any of this hour on News Talks, he beat
out carried in zaid back shortly with a pounds squad.
Speaker 1 (41:17):
For more from the Weekend Collective, listen live to News
Talk sed Be Weekends from three pm, or follow the
podcast on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:41):
Hours. It's welcome back to the Weekend Collective. I'm Tim
Beverage at seven past four, by the way, for the
parents be joined by John Cown getting your kids to
(01:01):
share how everything's going at school and making those adjustments.
Will be kicking the Parents Quad off with just after
five o'clock. But right now it's time for the one
roof radio show. And my guest is see Well, he's
from call Logic and his name is Nick Good Old Nick,
how are you going go an?
Speaker 3 (01:15):
Very good things?
Speaker 2 (01:16):
Should I say? Should I saw your head of research?
I should give you the High Fluton title? Shouldn't we
thank you very much?
Speaker 3 (01:21):
Of course?
Speaker 2 (01:22):
Hey, I was, I've been. I was driving through around Northland,
you know, for a bit of a holiday, and we
went right up to Cable Bay and what actually we
went right to Cape Rianga, but I noticed neck and
we want your calls on this as well as to
your take on where the market's at, what it's going
to need to make it recover. But I was surprised
by the number of homes which to me seemed like
(01:45):
quite prime batch coastal properties. There was a lot for sale,
and I got the sense that, well, hell, look at
some of the prices and it just looked like the
property market from that point of view, wasn't on fire.
Then I bumped into a friend of mine who's got
a few property stakes around the country, and he is
just like, it's dead. It's dead as a doornail you've got.
(02:08):
We said, there's nothing going on, and he was talking
about the what's the test rate the banks do? Is now?
The test interest rates? Now? I think up to nine
percent or something.
Speaker 4 (02:16):
They should have dropped. They should have droped a bit
by now. I think might into the high sevens. I
can prove it's still tough.
Speaker 2 (02:22):
But anyway, I thought to start off with, I'd get
your take on it. But if you're listening, oh, eight
hundred and eighty, ten and eighty, what is your view
of what the property market's doing right now? But if
it's as flat as I think it is, and I'm
going to check that with neck right now, because he's
got the data, what are the things, what are the
conditions or the factors that are going to need to
come into play to make things move move a bit more?
(02:43):
And do you want to see it move a bit more,
because of course, Nick, if you are a somebody's wanting
to buy, you don't want the property market to get
too excited, do you. But it does seem it's on
the flatterir side, am I right?
Speaker 3 (02:55):
Yeah?
Speaker 4 (02:55):
I think that's absolutely right, and you you're bang on
in terms of it's all about perspective, right, perspective first
time buyers, they're quite happy to see values you know,
sideways or even falling while they're trying to get that
deposit and maybe even see interest rates fall a little
bit more, and then when they do buy, they're in
a much better financial position as well. So yeah, look
at it is an interesting time. I do think things
are essentially flattening out. There is expectation for some growth
(03:17):
this year, but not expected to be strong. And I
think to your point right, there's going to be differences
around the country. The main centers, the biggest city in
Auckland will be quite different from the other main centers
and really different to some of those rural areas or
you know what you might call those holiday or batch
type areas. They're going to be a bit different too.
And I think you know your assessment of that, saying
you know they haven't been going that well, probably makes sense,
(03:39):
I think. You know, we've been in a recession for
a long period of time. People have been squeezed with
their mortgages. They have it to tighten things back up.
There's a little bit of job uncertainty. That means they're
not going out there and buying those those hell Hoiday homes,
those batches up north. They're not able to afford it
or hold on to them, and that's when they go
to market. And if the market's not there to buy
them off them, then those prices are going to slowly
(03:59):
adjust down as well.
Speaker 2 (04:00):
Yeah, the hold on to them thing is the thing.
I look again, So you work in the work in
the area of analyzing data to the nth degree, which
it's beverage drives around Northland and goes, well, there's a
few houses for sale here. It must be some people
wanting to free up some cash. But I guess I
have hosted a property out for a couple of you know,
for a few years now, so maybe I've I tend
(04:21):
to click into certain ideas and things, but they could
be wrong. But were those observations sort of what the
data is telling us?
Speaker 3 (04:28):
Yeah?
Speaker 4 (04:28):
I think it is, and I don't think you should
underestimate the value of actually seeing what's happening out there.
One of my examples is, you know, I can sit
here at my desk all I want and analyze all
the numbers, but if I was to buy a house,
there's nothing quite like being out there, going and looking
at open homes, going and seeing what's for sale, what
prices properties are selling for. That's a hugely important part
of it too. So the data doesn't always tell the
(04:49):
full story. I think that genuine experience and seeing it
and seeing the houses and knowing the location and you
know what amenities or what are the attractions in those areas,
that's a huge part as well. So you do need
to balance all of that together. But I do think
some of those smaller areas they are probably the in
for a little bit longer period of maybe that sideways movement.
I mean, the one comparison I make, And it's not
(05:10):
always perfect because the global financial crisis and property prices
through that period of time will be different to what
it is this time around. There's different reasons, different factors
that have affected the economy then and now. But remembering
back to that, it took an average of seven years
for values to get back to their peak price in
two thousand and seven, but it was even longer for
(05:31):
the smaller areas where there just isn't consistent levels of
demand over multiple different economic phases.
Speaker 3 (05:38):
I guess.
Speaker 4 (05:39):
So it can take long in those smaller areas than
the big cities, who tend to attract more migrants, have
more jobs, have a more robust economy. You're lucky to
see those areas bounce back.
Speaker 2 (05:48):
First, What is the data telling us? And in terms
of core logic, how you know how? Because obviously house
is sold today how quickly until you guys have it
as part of your record keeping.
Speaker 4 (06:02):
Yeah, I mean we have a number of different processes
is to get data into our database. Some of those
reply on the official provision of that data to us
via councilors, but we also have some calling sales programs,
so we call up and find out what they're probably
sold for straight away as well. So we do our
best to have as much data as soon as possible,
and then we feed it. In terms of measuring value
(06:23):
change over time, we feed all the data we can
get into our home value index, which is essentially an
aggression model that looks at how values are changing over time.
So we just released our data for January and we
saw the values of our zero point one percent nationwide,
but only zero point three percent over the quarter. So essentially,
(06:44):
like you said, essentially flat nationwide, slightly down over the
annual period. But as I said, it looks like things
are kind of founder trough with the potential to see
some growth coming through this year as it igistrates for.
But a confidence comes back and we see people back
in the market.
Speaker 2 (06:57):
And I know we had these conversations before, you and
I about obviously your prime role is and data analysis,
and it's a tool for people to draw the our
own conclusions. But do you if you look back at
maybe our last two or three conversations over the last
few months, has the is the market in a place
where you would have expected it to be or are
you kind of surprised that it feels possibly a bit flatter?
(07:21):
And look, there'll be people listening to this throwing things
that the radio going, oh, beverg just doesn't know what
he's talking about. You know, things are pumping. I'd be
surprised to hear that. But are you surprised where we're
at now.
Speaker 4 (07:31):
In some areas there will be a bit of growth
already come back as well. You know, I think, you know,
we looked at a Hamilton from our house prices next
grew zero point five percent last month, so there will
be pockets of this of course, you know, one figure
nationwide doesn't tell you the full story of all these
different cities and towns across the country.
Speaker 3 (07:47):
I think, yeah, we were expecting a bit.
Speaker 4 (07:50):
More or probably the trough to come sooner, so more
towards the sort of third or fourth quarter last year,
and maybe some growth to come back at the end
of last year. Never really eventuated, so it's probably a
little bit behind the cycle. I was expecting. This trough
has been drawn out a little bit longer, and that's
probably because our economy has been struggling. There is worse employment,
(08:11):
our labor market isn't strong, not expected to grow or
do much better in the next couple of quarters either.
So I think it's just this, these difficult economic conditions
have meant that even though interest rates have fallen, which
should be a boost for the property market, it hasn't
really eventuated that way because the rest of the settings
haven't really lined up for that growth to come through.
Speaker 2 (08:30):
Okay, I want to dig into that because I also
want to find out a bit more about the about
what the data is revealing around the country. But if
you're listening O eight hundred eighty ten and eighty, what
do you think it will take for the market to
get just And I don't want to talk in extremes.
You know, we've seen extreme growth in the market. I
think maybe those days are well over for a while yet.
But what do you think it will take to actually
(08:52):
kick things along a bit more? And I guess, firstly,
what do you think it would what what would the
indicators be from a data point of view that would show, Okay,
we've seen another zero point five percent drop in the
cash rate, or we've I've seen a bit more productivity
in the economy. As if you want less people losing jobs,
maybe for more people being employed. What are the things
what are the mix that you've observed over the years, Nick.
Speaker 4 (09:15):
Yeah, I'd say the number one thing I'm looking for
is our affordability measures, So how we measure what affordability
is like? So that can be as simple as house
price to income ratio, which has improved over the last
couple of quarters. So the house price to income ratio
today sitting at seven point four in New Zealand. Now
that's still up on the a twenty year average which
(09:35):
was six point eight, so it's still above that long
term average.
Speaker 3 (09:38):
Maybe has to come down a little bit more.
Speaker 4 (09:41):
But also we look at that share of income required
to service a mortgage today because that takes into account
interest rates, which the first measure doesn't. That right now
is sitting at forty eight percent, so on average to
service a mortgage and eighty percent loan to value ratio
mortgage today, it takes forty eight percent of the average
household income to service that mortgage based on the average
(10:02):
property price, really high, Hik, Yeah, exactly, it's come back
a little bit, like it was above fifty for a
good couple of quarters most of last year, and it's
still above that long term average of forty three percent.
So I think that's where you know, those interest rates, Yes,
they've come down from those peaks, but they have to
go down a bit further to rarely make that number better.
And then you have more people available to buy a property,
(10:24):
then a bit of competition comes through and suddenly you
start to see you know, two people bidding for a
property and prices start to lift the gain. So that's
the number one thing I agree with you. You know,
other economic situation, you know, employment, all those things matter too.
But for me, if you can look at one measure,
when is that affordability figure, all those figures start to
come closer to that long term average.
Speaker 2 (10:43):
I guess because the next question is kind of related
to a bit of a bit of a guestimate on
your part as well, because it's not so much data related.
How much do you think rhetoric and public perception play
a role? So you know, when I think of the
economy right now, I see lux and talking it up
and say we're going to do this, But the vibe
(11:05):
that I get is that we're not the so things
still feel a bit crappy. But I have been told
by property experts that it's a mistake to think that
the rhetoric really means much because in the end, the data,
the affordability. What people think is you know, how much
does the doom and gloom influence it? In your view?
Speaker 4 (11:24):
I think there is an element of it. I think,
you know, if everyone's feeling good and they're being told
there's good reason for growth to come. So I don't
think you can just have a willingly you know. Yeah,
and phoma kicks in all those things, right though. That's
why they're there, because there is a psychology to buying property.
You know, there's a number of reasons you do buy it,
and it's one of the you know, it's one of
the reasons. I suppose it does better than other things
(11:46):
because it serves multiple purposes. It's an investment, it is
a roof over your head, so that's why it gets
a little bit emotional as well, rather than which should
be a typical economic conversation of demand versus supply, and'll
that'll see where things get to, right, It's not quite
that simple. And there are other things that play on that,
and that is expectations around capital growth, which can be
influence by, you know, by the government and conversations they have,
(12:09):
by expectations about what regulation might change in the future,
and around things like expectation of long term interest rates.
So we see the forecast on a reserve bank around
where the ocr might be in a year or two time.
They will influence how many people say, well, if I
get a property today, are my interest rate payments? My
mortgage payments going to be similar or could they be
quite different in future. And if you if your financial
(12:30):
situation is also maybe not one hundred percent sure, then
also you're going to be cautious and conscious about it.
So I do think that there is an influence of
you know, the vibe if you want to call it that.
But you're right, the pure financials, the pure financials are
going to overrule everything, but then the vibe can take
over once we start to get some momentum one way
or another.
Speaker 2 (12:49):
I'd love to know how many of my guests on
the show have seen the Castle. I can't remember. There
was a politician I was talking to I mentioned the
vibe when they went with it the vibe your honor,
it's marbo.
Speaker 5 (13:02):
Hey.
Speaker 2 (13:03):
So in terms of the data that you and lies,
how what sort of view do you take of what's
happening in internationally and when I when I asked that
specific reason for that is that people have talked about
with the Trump presidency and you know, it has a
positive effect from business's point of view, but it does
(13:23):
have an inflationary effect in the States, and if there's
inflation in the States, that affects what our cash rate's
going to be here. Ultimately, I don't know how to
draw all the lines, all the dots, which brad Olsen
would probably do maybe you would as well. But do
you follow that that sort of data and does it
tell us anything?
Speaker 3 (13:43):
Yeah?
Speaker 4 (13:43):
I think you know, you can't get away without having
some level of understanding and insight as to what's going
on overseas. You know, we are still a small, tiny
nation that's going to be affected by big international situations,
whether it's you know, the wars that are going on,
China's economy, how it's performing Trump becoming president, all those
things do have an influence. I think that, you know,
we're pretty lucky in the sense we can watch what
(14:06):
the Reserve Bank season does. They are relatively transparent, they
can they take some verified criticism sometimes. We do get
a pretty good feel for their read on those international
things and what it means for us and how that
might influence where registrates go.
Speaker 3 (14:20):
And I think that's the key for me.
Speaker 4 (14:21):
For most people they're fixing their mortgage for two years,
that's the thing they really want to know, and that's
how they can sort of break down all that technical
information that's off over most people's heads. And you don't
need to know it, but having an awareness about those
things because they pose risks. And often the economists will say,
you know, there's some upside risk to our forecast or
some downside risk to our forecast, and if this happens,
(14:43):
you know, x y Z, China goes into greater recession,
then that's going to have an influence, you know, downwards
on our cash rate or whatever it might be. So
I think just being aware that no one knows the future,
but understanding those potential risks, then you can put your
own judgment on to go I've got full confidence in China,
or I'm not worried about Trump in America, or you know,
whatever it might be, then you can start to put
your judgment on top of those those scenari I guess you.
Speaker 2 (15:05):
Know, I see if I was as a punter listening
as well to what you just said, that tells me
we're in for a little bit of uncertainty for the
next two or three months. Because I've got tariff's rolling in,
We've still got global we've got global uncertain m terms
of the war in the Ukraine and things like that.
It does feel, which means makes me feel if I
was a buyer. I've got a bit of time. But
(15:26):
tell you what, I'm not going to throw that to you, Nick,
I'm going to throw that to if you're listening right now,
we'd love to hear from me. Oh eight one hundred
and eighty ten eighty. The market is a bit flat still,
there's a bit of uncertainty globally and all that sort
of thing. I don't want to paint too much doom
and gloom because I am no economist. Even though my
C plus says I did pass stage one could have
been a C minus, to be honest, plus minus. Who cares?
It was a seam?
Speaker 4 (15:48):
What's that seas get degrees?
Speaker 2 (15:52):
You can go to a tiger, did you?
Speaker 3 (15:54):
Yes?
Speaker 2 (15:56):
Anyway, Well want your cause because I want to know
if you are sitting there watching the market, are you
actually thinking it's the start of the year and you
think in a minute, I'm the market is actually quite
a bit flat. Properly, private prices haven't got moved that much.
I've got time to sort my act out. Are you
What is it going to take for you to get
off your chuff and actually do it? But also, what's
(16:17):
it going to take for the market to just maybe
get a little bit more activity in it to give
us a call. We'd love to hear from you, your reckons.
It's twenty three past four news talks. He'd be surfower.
Speaker 5 (16:30):
Well, my name and sen talk to myself for hours,
sit things you don't understand. I can take myself day again.
Speaker 2 (16:47):
Money in the feb guess. Welcome back to the Weekend Collective.
I'm Tim Beverage. My guest is head of research at
Carl Lodge. Is Nick good Or we're talking about, well,
what's it going to take to get the market moving?
I will respond just quickly before we carry on. Somebody
sent me a text saying, why would you want the
market to take off? The only winners will be investors.
(17:09):
The media are obsessed with property always rising. Thanks Steven, Well,
I think if you had listened to close more closely, Stephen,
we were saying it's a matter of perspective, weren't we next,
Because if you are someone who wants to buy their
first home and live in it, then you're quite happy
for the property market to be a bit well, you know,
a bit crappy for a while, but slow, maybe hoping
that interest rates will drop a little bit but things
(17:31):
will still be a bit suppressed. But of course, if
they're waiting for that drop in interest rates, that might
not necessarily that that is a stimulus effect, isn't it.
Speaker 4 (17:41):
Oh yeah, for sure, Yeah, I think you know, we're
all looking for February nineteen. I think the data is
when the Reserve Bank next meets to decide the next
step of the ocr heavily expected to be another fifty
bases point four. So that's going to make things, you know,
pretty low still, maybe with some way to go throughout
the rest of the year, but it might slow down
in terms of the rate of cuts.
Speaker 3 (18:00):
That we see later on through the year.
Speaker 4 (18:03):
And most of that cut has probably already been baked
into some of the one and two year rates that
the banks are offering anyway, So I'm not expecting to
see huge shifts in those rates even following that date,
but still expectation that we've got some room to move
and some further force to come in the socio for shore.
Speaker 3 (18:17):
Sure.
Speaker 2 (18:18):
All I can remember is that remember the time when
was it sort of May last year where Adrian or
said that he wouldn't be cutting interest rates until this year,
And how much has changed and if the Reserve Bank
can get it that wrong, then what hope was there
for the rest of us?
Speaker 3 (18:35):
Yeah, it changed quick. Yep.
Speaker 4 (18:36):
I remember back to then too, and yeah, amazing how
much I think it was between their march and may
you know statements they put out they flip flopped completely.
Speaker 3 (18:43):
And yep, things change.
Speaker 4 (18:45):
Data changes that the data they were seeing had changed,
So you need to you need to make your assessment
a little bit different.
Speaker 3 (18:50):
But yeah, the dramatic change certainly brought a lot of
criticism for them. It's for sure.
Speaker 2 (18:54):
I feel a little bit just to be contrary, and
I don't think it's going to be point five of
a point. I think it's going to be point twenty five.
I think for some reason they're just going to go
They're going to go on the brakes a little bit,
and they're going to do it in dribs and drabs.
Speaker 4 (19:04):
That a reasonable guess, I suppose. You know that the
big counter to that is just seeing how much the
economy is struggling, you know, with there's so much conversation
right now about the labor marketers is doing it tough.
We are still in another recession, which, if you want
to look at it and I'm not a big fan
of the definitions of a recession. You know, it's felt
(19:26):
like a recession. People don't feel confident. You know, we're
not seeing great amount of jobs being created. You know,
it's recessionary times. There's no doubt about that. So it
needs some support, and absolutely the best way Reserve Bank
can offer that is through monetary policy by dropping the
ocr So I just think there's probably too much evidence
there of a struggling economy that needs support for them
to not do it. But there, you know, there'll be
(19:48):
a chance of a twenty five and as you said,
you know, first first chance, they meet again in six
weeks time.
Speaker 3 (19:55):
From there they can always go again. Then. So yeah,
well that's what I was thinking.
Speaker 2 (19:59):
But I do take that as your very kind way
of going good Trium. But now it's going to be
point five zero.
Speaker 4 (20:05):
I suppose you know, I wouldn't be be good at
my job if I didn't look at every possibility. There's
a few times here I've been very strong and calling
one way or another or a certain amount, I've got
it wrong.
Speaker 2 (20:15):
And what's your worst ever? What's your worst ever call
where you've gone, Oh, this is going to happen and
then you're like, oh, keep my head down as I
walk into the office.
Speaker 4 (20:23):
I think it was last year and I was speaking
to a group in total longer. There's been one hundred
people there and the Reserve Bank was meeting the next day,
and I basically said I'd buy them all a beer
if I got it wrong. And I can't remember what
the decision was now, but I think I said it
would only be twenty five. There was no way they
did fifty, and then of course they went fifty. So
I had to call up the organizer and say, yeah,
I'm not coming back to toto On because I don't
(20:43):
want to pay those beers.
Speaker 2 (20:44):
A good one hundred people. That's doable at least, but
it's still a bit of it. It's still a bit
of a blow, isn't it.
Speaker 3 (20:52):
It depends I put it on my card or call
Logics CUD.
Speaker 2 (20:54):
I guess, ah, yes, yes, yes, yes exactly. I think
I know which way i'd go with that one. Hey,
look on the property report, you say, the core Logic's
latest reports coming out for January. What as you say? What?
I think you said that the on average the medium
prices down across the board zero point one percent. Was
that right?
Speaker 3 (21:13):
That's right?
Speaker 2 (21:13):
Yeah, what is the what are the Are there any
standout surprises or interesting stats that came out of that report.
Speaker 3 (21:21):
At the main center level.
Speaker 4 (21:22):
I think it's not necessarily a surprise, but it's a
continuation of the struggling that we're seeing in Wellington. With
point six percent of a decline in that one month
for Wellington, so we're still seeing values fall away, you know,
at a decent clip, I would say for Wellington, but
most of the main centers are essentially flat. They were
like point one percent down or point one percent up.
Speaker 2 (21:41):
If you go down to this sort of the month,
isn't it that's for the month.
Speaker 3 (21:44):
That's the month that is over the month.
Speaker 4 (21:45):
Yeah, if you go down to the next tier, you
know the main urban areas that are sort of you know,
still cities, but not those main sixth centers that we track.
You still you see some growth in New Plymouth point
nine percent over the month, so that was quite strong.
But they know the areas around Wellington Lower Hut was
down point six percent as well. But it doesn't look
like there's many the clients happening outside of Wellington. Gisban's
(22:07):
one that does jump out point five percent decline, but
everywhere else was a flat or a little bit of growth.
Speaker 2 (22:12):
And Hamilton you mentioned, was that that was actually a
reasonably good performer, was it.
Speaker 4 (22:16):
Yeah, point five percent up one point six percent over
three months. So yeah, it looks like Hamilton's kind of
you know, maybe seeing that trough a few months ago,
we're actually seeing some growth back in that market more
attractive from an affordability perspective. So it's those those things
we were talking about earlier, where people are going to
find value in these markets, earned decent coin, maybe they
know maybe they can earn decent money living in Auckland
(22:38):
and able to buy an investment property, for example, or
they're working remotely so earning good coin but being able
to live live in Hamilton.
Speaker 3 (22:44):
You still have got access to Auckland as well.
Speaker 2 (22:46):
Yeah, I've got a text to who's actually reminded me
of that because you might not know this, but ages ago,
when Tim Roxboro was my co host, I talked about
how I watched the market going on. I thought a bit, you,
Hamilton's really going to go. And I didn't do anything.
I just watched Hamilton really really go. And so one
of My text is that said tim house prices and
Hamilton your favorite investment town starting to climb. I'm serious,
(23:09):
is David, Why would Hamilton be popping up as a
place where there's a bit of growth that we they
might be happy with.
Speaker 4 (23:18):
Yeah, well, I mean, you know, it depends who you
talk to. I guess you know, some people are are
going to be strong supporters of Hamilton on its own,
and there's no doubt that it's a large city, so
it does have strong appeal again from a job's perspective,
you know, from what you get from a large city.
I think that the darts is going to be there
later in the year so they can attract big events.
But then when you look at affordability the average price.
Speaker 2 (23:40):
Later in the year. What was that you said that
what the.
Speaker 3 (23:42):
Darts, that there's a dart there?
Speaker 2 (23:45):
I thought that was some sort of abbreviation and data
you literally means the literal darts.
Speaker 3 (23:53):
Here's the National Darts whatever it is.
Speaker 2 (23:54):
By the way, they've got the Hamilton Festival in two
weeks starting. People get along to that as well. So yeah, Hamilton,
it's all it's all happening.
Speaker 4 (24:00):
But those big cities they do have you know, they
who have big things that go on, they have big events,
they'll they'll get concerts, they'll get sporting events. And then
when you look at the property prices, you know, the
median value is just under seven fifty When you compare
that to Auckland at one point zero seven mill, you know,
there's quite a big difference there. And I'm not saying
they're comparable cities. They're massively different in size. But you
(24:23):
know the fact that we don't always have to go
into the big city these days, but Hamilton still has
that attractiveness to be close to Auckland if and when required,
if you've got clients there or whatever, those things are
going to start to appeal. So and you know you
can't get away from that. That road that got put
in and completed, was it not last year the year before?
Like that just changed the game with commuting, right, so
when you do have to do it, it's not a drama,
(24:44):
it's not a big problem and you can get there
pretty quickly. So yeah, that'll that'll be that'll be a
big part of why Hamilton has seen that growth.
Speaker 2 (24:50):
Are there any signs that you see within various markets
where there's a certain where you think it's there are
some precursors to a bit of growth, or is it
the data doesn't tell you anything apart from it's just look,
it is what it is. Where I'm more interested, you'd
be more interested and the economy, job growth and the
cash rate.
Speaker 4 (25:09):
Yeah, well luck any I suppose you know financial investor
investment manager. They'll say that the past returns doesn't predict
future returns, so you.
Speaker 3 (25:17):
Can't always look at that history.
Speaker 4 (25:18):
But I think it's hard not to let that affect
how you'd feel about expectations of the future, you know,
whether that's we're going through a similar phase do we
have in the past, or whatever it might be. But
I totally agree with your point that you're going to
be someone that wants to understand a local market is
to understand what is the key driver of that economy.
So for Wellington, we know it is supported significantly by
(25:39):
government and so it's not doing so well right now.
Those areas of the country where they're supported quite well,
whether it's a tourism area, those that are still supported
by farming, they're still looking okay. So those areas where
there's no real concern about future employment is likely to
see greater bounce back in those areas. And then I
think you're still going to come back to some of
the stats which do tell you where where does affordability sit?
(26:01):
And what's really interesting with that one, And I'm based
in Wellington, so maybe I'm a little bit biased here,
It is that Wellington has actually almost come back so
far now that it looks more attractive from an affordability perspective,
whether you're looking at value to income ratio a proportion
of income required to service a mortgage than many of
the other main centers now because it does have high
average income and values have actually fallen for a bit
(26:23):
further than other areas. So that might mean that once
there's confidence back in government, government spending, government's back employing,
and you know, we start to maybe see some growth
come back in that part, that Wellington might be pretty
well set to see some growth occur.
Speaker 3 (26:36):
At the other and the other side of women.
Speaker 2 (26:38):
I'm hearing some optimism from our Wellington based expert there
as well. Didn't you have some stuff about the pipes
being fixed as well? There's been some more you've had
some positive news on the pipes, they haven't you?
Speaker 4 (26:49):
Was that lower heart there probably is, But honestly, down
the road from me yesterday that a massive, massive pipe
just blew as well, and so the water's.
Speaker 3 (26:57):
Gone bad and I don't even want to go down
that one.
Speaker 2 (27:00):
Let's be honest, Okay, right, hey, look we might take
a moment. We'll come back. We'd love your calls. One
hundred and eighty ten eighty. What you'd like to see
with to get the property market? But also what does
it take for you? What do you need to see
to feel comfortable either buying or selling. Obviously, if you've
got your market on the property, if you've got your
property on the market, then of course all you need
to do is get an offer that makes that's what
(27:21):
makes you comfortable selling. And there are plenty of properties
I gather on there. In fact, we might dig into
that a little bit with Neck in terms of the
number of listings in just a moment, because I'm sure
he's across that as well. It is twenty three minutes
to five news talks. He'd be grandness, yes, and welcome
(27:53):
back to the Weekend Collective. This is the wonder If
radio show. I'm Tim Beverage of my guest is Nick
Good or he is head of research at core Logic.
But don't forget after five John Cown with us before
the parents Squad, getting your kids to share how everything's
going at the out of the year, all the changes,
and also what are the movies from your childhood your
kids should or shouldn't watch? Should I say, because I
can think of a couple myself. But right now back
(28:14):
to the wonder with Radio Sha Nick. Actually I just
want to pick you up quickly, not pick you up,
but with your recent report, core Logic's report into January,
the headline that went out with the press release was
housing market close to a trough, which does to me
contain a hint of a prediction that maybe we're not
(28:36):
quite in the trough yet. And I had missed that
when I was going through the report, and I thought,
hang on a minute, there's the headline not there yet.
Is that a form of prediction for you guys?
Speaker 3 (28:45):
Yeah, I think so.
Speaker 4 (28:46):
I think it's about setting expectation for what direction of
travel we expect the values of properties to go next.
And yeah, you know, you could probably split hairs on
one point one percent fall and say it's essentially flat.
We do revise the index each month too, so as
we get more data for January, we will re update
that data and it could well then be at points
zero percent as well. So I think we're sort of
(29:08):
safe to call it there or thereabouts, okay, And most
questions now are about, you know, what does the next
direction look like and how steep might it be if
it does turn to a growth phase.
Speaker 2 (29:18):
Because I think the question for people who are looking
at buying and making the in and they obviously the
holding back now because the market's not in a frenzy,
but is this would involve I know we ask a
lot of you on the spur of the moment in
a way, but when the cash rate gets keeps reducing,
at some point there is a happy point where affordability
(29:39):
is just fantastic. But there will be people who are
holding off for a cash rate drop. But then if
the proper if the market increases, then suddenly the affordability
is no you know, better off because you've paid more
even though you're paying a smaller interest rate. Is there
are there observations in the past about that sweet spot
(30:01):
before affordability gets away from you again, when you know
we see that trough work through.
Speaker 4 (30:07):
Yeah, it's probably never that clear cut and it's going
to be different over different phases. Unfortunately, if there was, Yeah,
that would be very nice for all of us trying
to pick that trough and to pick when we're going
to hit those turning points in the market.
Speaker 2 (30:20):
I guess, how quickly can it get out of hand
where you think, okay, got the cheap interest rates and
you're like, well, sorry, you should have been looking three
months ago.
Speaker 3 (30:28):
Yeah.
Speaker 4 (30:28):
I think for buyers of property, the actual cash right
at the time probably shouldn't be the greatest reason for
why you're buying. You want everything else to be lining up.
It's obviously really important for current mortgage holders as to
when you pick a certain fixed rate, that's going to
be really important, and that's why we saw people float
for a couple of weeks before they then fixed after
(30:50):
the cash rate change.
Speaker 3 (30:51):
But for someone that's looking.
Speaker 4 (30:52):
To buy, I'd suggest that you should buy when you're
ready and when you can afford to pick up a
property for a price that you can afford, and not
to try and predict the future and go, well, if
we missed this one, but we know that helf down
the road is going to come up, or it's already
you know it's auctions next month. You know we could
get that for a better price. I think you're sort
of playing the wrong game. You really want to go
(31:13):
into it with what can we afford and if we
can get up for that price, be happy with it,
even though a week later it might have been cheaper.
Speaker 2 (31:19):
That's almost analogous to what you were talking about as
a data in our analyst that sometimes it's good to
get out in the market. If you are sitting there
just playing with numbers and looking at trade me and
with the one roof website for properties, and you've got
this number in your head and you've got your savings,
unless you're starting to look for something you're not ready,
would that be a fair analogy. You need to get
(31:40):
out there and start being a participant.
Speaker 3 (31:43):
Absolutely, you know.
Speaker 4 (31:44):
I think the first thing is to make sure you
know how much you can borrow, right, So you need
to go and talk to a bank or talk to
an advisor, find out how much you've got, and then
look at properties in that range. And yeah, like I say,
nothing beats that time of going and looking at properties
and going what would we pay for this? We pay
eight hundred and it's sold for nine hundred Okay, you know,
we value things a little bit differently than the market.
But the other property that has something to done, no
(32:05):
view or you know, offstreet parking, whatever it is, we'd
pay a little bit different for that. So I just
think you can't beat that time of looking at it
yourself once you know what your level is, especially if
it's for a first home, right like you're going to
be there for a long period of time. Squeaking out ten,
twenty thirty, even fifty grand probably isn't the most important thing.
It's about do you want to live in this house?
Speaker 2 (32:24):
Yeah? In fact, that probably what we would discern from
that is that if you are someone who wants to
get into the market and you're thinking about it, then
you really should be getting cracking. Don't have to make
an offer tomorrow, but just start looking and getting into
the world with it.
Speaker 3 (32:39):
I guess you start doing your research.
Speaker 2 (32:42):
Yeah, hey, just before we get on to some of
the techs that have come in, what's happening with Queenstown
and aw and our town. Just to depress me because
that's always my fantasy purchase, which will always be a
fantasy purchase.
Speaker 3 (32:54):
But there we go, Well, what's depressing about it just
the high prices.
Speaker 2 (32:58):
Yes, the fact that the house I really want is
probably about six million bucks.
Speaker 4 (33:04):
Yeah, well, I mean Queen's down Queenstown Lakes region. Obviously,
it seems to be a market all on its own.
It doesn't really follow the same cycle as any other
part of the country. You know, I would call it
our only other international center outside of Auckland that's truly
understood and attractive to people internationally and knowing and you know,
we just haven't seen that same decline and values in
Queenstown that we have across the rest of the country.
(33:26):
So the median value there of a property is currently
one point six three million dollars. You know, that's compared
to Auckland, much bigger city, you know, much more, you know,
a greater economy itself, sitting at one point zero seven. So,
you know, it's just all out of its own and
we've still seen growth. You know, in the last year,
we've seen growth in Queenstain of two point four percent,
(33:47):
and there's not many parts of the country that have
grown in the last year.
Speaker 2 (33:50):
I actually was going to anticipate that. I'm surprised that
actually was that low actually, to be honest, but yeah. Hey,
by the way, people want to get a hold of
your report that for January and other ones, because there
are all sorts of services people can pay for. But
you do have information available to the public, don't you.
Speaker 3 (34:08):
Yeah.
Speaker 4 (34:08):
The good thing about the research team stuff, the reports
we put out, the house price and disease that Calvin Davidson,
our Chaffick chief economists puts out, they're all available on
the website. So you go to call Logic dot co,
dot and z and our research and news tab and
all of that stuff is freely available to go and get. Yes,
you can get granular, you can buy property information, but
for the high level reports, anyone can go and get
(34:29):
that whenever they like.
Speaker 2 (34:30):
And your reports called the NZ hedonic home I keep
on thinking hedonistic, but what does hedonic mean?
Speaker 4 (34:36):
Yeah, that's just the type of regression. So it's just
the way that we calculate which properties have sold and
how we allocate that to all properties. So the most
important thing we're measuring house price change over time or
home value price over time is that you do it
for all properties in that area and don't look at
a median sale price, because that only tells you what
happens to have sold, and this gets you around that,
(34:57):
so you're not just looking at suddenly one month property
sold and last year it was all these cheap ones.
Looks like massive growth. It's just not the case. You
need to use an index. And that's the key point
that Hadonic model does.
Speaker 2 (35:07):
That makes it a particularly useful set of data. Actually,
because that's the medium price always does my head in
because as you say it, it's got its limitations, doesn't it.
First text actually just says that they loved you, saying
darts in Hamilton is a slang for data, but of
course you are literally referring to one Ordred and eight.
Are you going to be going to that?
Speaker 3 (35:27):
Not my mate.
Speaker 4 (35:28):
Just the reason it's on top of my mind because
I've got a friend in Hamilton who was saying you
should come up for the darts in November and I
was like, I'm actually going to the World Darts in
Auckland in August. Okay, so yeah, they're everywhere, it's all
over the show. But yes, I love those type of events,
so looking forward to it.
Speaker 2 (35:44):
Excellent. Okay, a few texts here, I'm going to look
into my crystal ball says this personal allow out a
few predictions. The elephant in the room AI. I don't
know how that's going to relate. America will achieve AI
supremacy or AG I and know what they're talking about.
They're saying China will invade Taiwan, America will do nothing,
Intel stocks will outpace in Video, and Russia all back
(36:05):
down and become a USLI. I don't know if there's
any of this is useful for our property predictions, but
actually how much of our property market does rely on
a bit more global security?
Speaker 4 (36:18):
I mean, I think it's kind of like I said before,
you need to be aware of all these things. But
you know, one line is like that saying each of
these things are going to happen with not much you know,
insight as to how or why they expect those things
to happen is probably not that useful for me. Our
point always at Call Logic is that we will tell
you our expectations of what we expect the market to
do or which buyers might be more active, but we'll
(36:39):
always tell you the thinking behind it as well. And
one of the things we're expecting to happen this year
is that we've seen quite a decline or less activity
from people moving house in the last two years. So
our expectation this year is that there's a bit of
pent up demand of people who have gone through similar
life stages that have changed. They would have liked to
move house and they couldn't or we weren't sure to.
(37:01):
But now they will want to as they as they
start to see, you know, things get better, confidence improve,
you know, finances start to get better, they might start
to be out there and start to move house as well.
So for agents out there, even for mortgage advisors, you know,
they might start talking to those clients who bought a
property seven years ago that now outgrowing it and moving
to the next one as well. So I like that
storytelling element of saying we think this will happen because
(37:23):
of this XYZ excellent.
Speaker 2 (37:24):
Hey, look we need to take a moment. We'll be
back and just to tick. We're with Nick good Oh.
He is head of research at Call Lodger. Come Tim Beverage.
This is the one roof radio show. It's ten to five. Yes,
news talk, said b it is. This is the one
roof radio show. It's seven minutes two.
Speaker 1 (37:36):
Five, the one roof property of the week on the weekend.
Speaker 2 (37:41):
Collective Well the thing that stands out about the one
roof property of the week, and don't think you can
go and check it out on one roof dot curder
en z is. It's got an RV and then it's
got a price guide. And if you look at the
RV and then you look at the house, you go
that doesn't make sense. And then you see the price
guide and you go, ah, I can see. So the
RV is one point nine million, the price guide says
two point nine million plus. I think the plus is
(38:03):
relevant because it is a dunning house. It's in It's
thirty seven Frederick Street, Hillsborough, Auckland City. It's four bedrooms,
four bathrooms, four car garage. It's I always don't know
how to explain it, but it is one of those
houses if you love something where something looks beautifully designed
and has a strong flavor of a bit of a
(38:25):
genius architect. It's got floor to ceiling picture windows. There's
it's bathed in natural light. I'm reading partly from the
blurb but also from my observations. It's got an outdoor
right dining area. It says seated set beneath an arbor
of established plantings. But I don't know how to describe it,
(38:46):
but it is a stunning property and you should go
and check it out at thirty seven Frederick Street. Aren't
Nick Goodall, head of research at core Logic. You don't
need any data on this one, Nick, But what do
you reckon?
Speaker 3 (38:57):
Yeah, she's a beauty.
Speaker 4 (38:58):
She looks rather the unique and you, like you say,
nestled amongst the bush there, it's like, right, just lop
them in the middle of a bunch of trees, so
you sort of it looks like you'd feel like you're
all by yourself as well, So even though you're in Auckland,
it doesn't look like you've got too many neighbors there either.
Speaker 2 (39:12):
It does look like a hell of I mean it
says so r V one point nine, Price Guide two
point nine. I've got to think it's got to be
a lot more in that one. It looks pretty flash
unless I'm missing something.
Speaker 4 (39:24):
Yeah, I mean, I find it impossible to try and
put a value on anything that's over two million dollars anyway,
because I'm certainly not looking for properties in that in
that realm, and I suppose want to get to that uniqueness, right,
you're going to have some Yeah, people that'll probably want
it quite desperately. They'll see that sort of house, they've
fall in love with it, and if they've got the cash,
like you say, could well be looking at three million
million plus And yeah, they've done a great job with it,
no doubt about that.
Speaker 2 (39:45):
Yeah. And the landscape, well there's an intense amount of
landscaping that's gone on as well. So if you're in
the market for a house, or if you like me
and many people, you'd just like to turn up to
a home and have a bit of a nosey, I
would be tempted to go and have a look at
that one. So it's thirty seventh Frederick Street in Hillsborough,
Auckland City. Hey look we've only got about a minute
to go next, so this is a bit unfair. I'm
(40:05):
going to throw this last question at you. It was
a text that just came in. What about migration? What
do we need to see there to see a kicking
up with the sixty seconds to go?
Speaker 4 (40:15):
Yeah, yeah, great, great point, and that's obviously going to
feed into demand for housing in New Zealand. It has
reduced a lot, but it's still net positive. We're still
seeing more people come here than the amount of people leaving.
And we talked earlier about the potential influence of Trump
and that's going to influence businesses and profitability and all
those things. It also might force some Americans that want
to look abroad, and New Zealand will be pretty attractive
from that perspective too, especially if our economy.
Speaker 3 (40:37):
Does start to improve. So it is a factor. It's
demand for housing.
Speaker 4 (40:41):
The more more migration means we need more houses, and
otherwise you're going to see demand for housing, even for rentals.
The more people looking for rental properties means that investors
will likely be able to charge a higher rent so
that numbers start to stack up for them. So yet
all feeds into demand for sure.
Speaker 2 (40:56):
Excellent. Hey Nick, thank you so much for your time.
People can check out your work on core Logic, dot
cod and inn z. Check out their January property report
and it'll have it's got some great information there for
you and you can check it out podcast. If you've
missed any of this hour on News Talks, he beat
out carried in zaid back shortly with a pounds squad.
Speaker 1 (41:17):
For more from the Weekend Collective, listen live to News
Talk sed Be Weekends from three pm, or follow the
podcast on iHeartRadio
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