You're listening to the Weekend Collective podcast from News Talks B.
Welcome back to the Weekend Collective I Tim Beverage.
If you missed any of the panel had a great time with Luke Dello and car McDonald.
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Right now, it is time for the One Roof Radio Show. By the way, just on that number, I was having a conversation. That's not really so much a Christmas song?
Is it? Short?
Old Grand Speed forgot? It's more like a New Year's Eve song. It's a seasonal song, I guess. Anyway, this is the One Roof Radio Show and my guest is Well, he's a regular these days. I think we could call him. He's not in the studio today because I suspect he's probably gone. He's probably looking he's either in his new house or he's on holiday or something. But his name is Ed mcnighty's a resident economist at Opea's Partners and he's with us now.
Ed, good afternoon, how you going him? Great to be here, mate, Yeah, where are you actually.
I'm currently in christ Church, which is where our head officers. So I'm sitting in our podcast studio, just being down here for the annual Christmas bash with the team and how.
Was it well?
Some people, as usual, probably push the boat out a bit far, but good on them.
Hopefully their hangovers aren't too bad today?
Are you talking about yourself? And the third person?
I wish these days are going to be a bit more responsible to.
Oh, you've got to set the example. Back in the old days, said.
In the example was being first to chunder in the flower beds, but these days probably the opposite is Anyway, Actually, last time we spoke, had you just bought your because you're a property investor, but you hadn't you were about to either buy or you had just bought your first home for you to live in with your fee once.
Say, I believe there, that's right me and Angela.
So last time I think we spoke, i'd won the auction I put up in my hand was the final better. And since then we have settled on that property that we officially own it. We've moved in and I think, like a lot of first home buyers, were people who buy their first house to live in. Were still waiting for a bit of furniture to turn up, because when you move into a bit of a bigger house, you realize how little stuff you have if you've been living apartment life for the last few years.
Actually, how what does it feel like to sort of cross the threshold and opened the door as owners for the first time.
Well, it's quite different, actually, you feel quite a sense of permanence that radio this is our place. We can do whatever we want to it. We can invest in buying some nice furniture now because we know that we're going to be here for five years at least, rather than when we were renting it was like, oh, well, if you need a new couch, just get a cheap one because we don't know where we'll be in a year year or so.
Yeah, are you going to renovate or is it you bought something that's ready to basically rock and roll.
It's pretty much ready to rock and roll. But I'll tell you a little story, just because it's close to Christmas. When we moved in, one of the bedrooms I think definitely had a young kid in the had this enormous snowboarder decal stuck to the wall, and so I thought, oh, no, we'll get that off. Well anyway, within about five minutes we'd ended up ripping the paint off, So we'll fix that at some point in the future.
Excellent. Oh it's good to have a project, isn't.
It Now, Tim, I've lost year audio.
Oh that's weird.
We just need to check something. And we just need to check something there. I think we're feeding the audio the wrong way.
We might need to check that.
Hey, now let's let's carry on as as we were. So there's been this wave of we want to talk about what's in the store for next year, and there's been this wave of good news for everyone with the ocr dropping, of course, and I would imagine that the HIFU has bought brought a bit more pressure on downward pressure on that for the next time they have to announce it. But of course New Zealand is now in recession and the high Fo's released it didn't paint a
very rosy picture of the government's books. In fact, while I'm discussing this were this is.
Your chance as well. We want your cause on this eight one hundred eighty ten eighty.
What does the the sort of shock or surprise of a worse than anticipated picture for the government's books. What do you think it means for the retestate market and it growth potential. We want to hear from you on e one hundred and eighty ten eighty. You can text nine two nine two. But first, of course he's my guest. He gets first DIBs ed.
In terms of what I think is going to happen in twenty twenty five, there's there's quite a few changes that are already locked in. The first thing that we've got to acknowledge is just last week or the week before, the government confirms that they are changing the tenancy laws, and in fact they've passed the third reading. So from the thirtieth of January, a lot of the laws that lords and tenants both have to follow are being rolled
back to what they were about six years ago. So what that means is that the ninety day no course termination rule that is back, So landlords are going to be able to give ninety days notice without having to give a reason and tenants will move out. There's also some quite big changes around pet bonds that we might get into. Basically, now landlords can't really know say no to your tenants having a pet whereas in the past landlords had a bit control. Those new changes are a
bit of a surprise. So that's all coming in twenty twenty five. The big one, of course is interest rates in house prices, and we have seen a little increase over the last three months in house prices. They're up about two point one percent. A lot of that probably comes down to the timing of the market. It's summer. House prices tend to go up a bit faster in summer. In terms of how much I think house prices will go up next year, six to seven percent is my
best guess. And one of the things that really is supporting that is the fact that interest rates are falling.
That's quite bullish, isn't it.
I don't think so.
It's pretty orthodox. At the moment.
I keep track of all of the major banks house price forecasts, and currently the bank that is being the stingiest with their forecast, if I can say that, the lowest forecast currently that I've seen is six percent, which is out of A and Z. They made that prediction back in November, just last month, so it's pretty orthodox. Probably the most bullish one that I've seen ASP's most recent forecast came out in August. They thought house passes
would go up almost eleven percent and twenty twenty five. Now, personally, I don't think that's realistic, but six or seven percent seems.
Pretty pretty achievable.
I think, Okay, we'd love to have your cause on this on eight hundred eighty ten and eighty what's going to happen with the property market next year? And actually, do you agree with ED that it could be six or seven percent. I've mind you, I don't serve opinions as thoroughly as you would as thoroughly as you would ED, but I seem to recall I have heard a couple
of slightly more pessimistic views on it. But we want to have your cause on this eight hundred eighty ten and eighty text nine two nine two get on the blow when you'll be straight through just on the What are the pressures going to be that are actually going to push those prices up? Because at the moment there is quite a lot of supply. Do you think that the demand's just going to kick in?
Well, the big thing is we are seeing out of real estate agents that more and more people are turning up to open homes, more people are becoming interested in it. We did see similar feedback from real estate agents in twenty twenty three or at the end of twenty twenty three, and what we saw is that house prices did rise a bit over summer, and then they started falling again in mid twenty twenty four. The difference between this year and last year is what was happening to interest rates.
So if I take you back to November December twenty twenty three last year, we saw that interest rates still climbed up, but they kind of peeked around February at about seven point four percent for their advertised one year rate. In fact, ASB got up to seven point four to five percent, so they were still climbing this time last year.
Now they've really really rocketed down, specifically in the last half of this year, because on average, the one year rates fallen somewhere between one point six to one point eight percent, and that makes a really meaningful difference for people getting out there and saying, hey, look, I'm going to borrow some money to go buy a house. I think it's probably going to be one of the major things.
The other thing we haven't seen is any real flow through into house prices from the record high net migration that we had, So typically a one percent increase in the population as a whole would typically lead to about an increase of house prices of somewhere in the region of eight percent. We didn't really see that when we had this record net migration. So you've got that kind of pent up demand coming that's still there that hasn't
flowed through into house prices. I think all of that will come through in twenty twenty five.
What about the interest rates in terms of the hiphou and the pressure on that, I mean, actually to be honest, also, do you think that the economic report will have any if any, if not, or no bearing on what the market does?
Personally? I think we have very little bearing.
I don't think a lot of people make their decisions about whether to buy a house or not based on Treasury's reports. If people did that, then nobody would ever buy a house, because often they are quite pessimistic. If I go back and look at a lot of Treasuries forecasts, typically they undershoot what house prices are going to do. And I think that a lot of people don't judge their personal financial situation based on what Treasury rights in a report. I think they base it on the redundancies
that they are seeing now. I think that people's fears about job in security that certainly plays a part, and in fact, real estate agents aren't reporting that. That is one of the main factors people are worrying about it at the moment when they're out there at their open homes talking to buyers, and so I think some people
will factor that into their decision making. I always think though, that when it comes to the total unemployment level that is often reported, even if you get a five percent unemployment rate, that means that ninety five percent of people still have jobs, and so that will support the housing market as well.
Good stuff. We want your cause on this.
Eight hundred and eighty ten eighty What do you think the property market's going to do next year?
The level of growth?
Ed McKnight is is a resident economist at Opia's Partners, and he reckons six or seven percent.
What do you reckon?
Do you think it's going to be a bit flatter just because things like the high food and recessions and things like that. Oh, eight hundred and eighty ten eighty text nine nine two jump on the blow. You will be up with your next seventeen and a half past four. Yes, News Talk said be with. Oh we'll let that Christmas roll for bit.
Yeah, there we go, lot of other ranges.
You know, you're the mastermind.
Run run, rude off, run up and you far behind. Well, it's not that good.
Maybe we'll chuck cutters looking back to the Weekend Collective. This is the one Riff radio show. My guest is Ed mcnighty's resident economist at Opia's Partners. Now we've had the high foo the rose. The economic outlooks doesn't seem so rosy. Productivity is down, the government's tax takers down. And is it going to make a difference to the real estate market your picks, Ed reckons, it's still going to grow about six or seven percent. And let's see what Steve reckons, Steve.
Gooda, yeahs good. Hey, listen, I think you're being yeah, totally over over optimistic with that sixte We might even call you Ashley church.
Light now steady on, Steve.
Oh, we won't go that far. We won't go it's not.
As combative as Ashley. So we we're going to be We're nicer to.
Eat exactly that that's all good. We'll get off on the right foot here. Look, I think it's going to remain a memeic for quite some time. Is a few reasons. I think New Zealand has now successfully has sentially built over supply of houses in Auckland. We've now got a lot of new stocks sitting around. You've probably heard recently in the news, which I find. You know, I'm surprised
you haven't brought that your formula. So you're talking about interest rates coming down only, and that's you know, supporting higher house prices. But that's only a very That's only a part of the formula, isn't it really? And I think if you can have low interest rates, but you need more than that to get the house prices going jet We know Japan had low interest rates, almost virtually negative interest rates, and the housing market stayed, you know, deflated.
The price is still went down. You know, they couldn't give the money away because you still need to you still need to pay the money back, right, even the principle so interest and if you've got a zombie economy that's not going anywhere and you haven't got job security, you're not going to go out and just grab grab that big loan right and just jump into the housing market.
So as your point more around confidence, Steve, regardless of the numbers that we look, I mean the numbers plus also confidence.
You know what's really funny is that the people we talk about confidence are probably the real estate people. People have a vest of interest in making money the market because that's the only thing they've got. But look, it's not showing up from the data. And you can be confident all your life. But it's a mood, isn't it.
Yeah, we'll see we'll jump in there if I let's let it jump in and you can come back and we can have a good old ding dong.
No, I'm enjoying this, Steve. One thing i'd just say though, because you're saying, oh, well, there's no evidence that house sparce is going up. Houseparces went up just over two percent over the last three months. Now you extrapolate that over over four quarters then and you'd be up around the eight percent market. I'm not saying would be there. In fact, if you look at all of the banks, more models and forecasts, the most conservative bank is at
six percent. One thing that I'll just add into this equation are two small facts. One, we are seeing the banks lending criteria really loosen up. So at the start of the year, most banks were testing your mortgage application at nine percent. Now it didn't matter that you were going to pay a seven percent interest rate, they would run their calculations. Is if you were paying a nine
percent interest rate. Today most banks are sitting around that seven and a half to seven point seven percent mark, So you're you may not have got a pay rise, but you might be able to borrow more money. And so it's not just a confidence equation. It's whether people are not just able to afford the mortgage, but is the bank willing to lend it lends the money to them, And in fact banks are now more and more willing to lend money out to them. Now I understand that
this is a pretty finely balanced thing. There are reasons why house prices might go up, there are reasons why it might be an emic. In fact, I wrote two separate articles for one roof quite recently, one outlining the seven reasons why I thought that'd go up and another outlining the six reasons why I thought that'd stay the same. So I get that this is balanced and you can argue it both ways.
Steve, what do you reckon?
Yeah, I think that of spent is almost what you might say, virtually zero. You know, it's technically there because it can it can fluctuate, so it really means nothing. I think what we can really see at the moment the rents are actually going and where I live in Booklyn, you can you can see that the rents have dropped. That dropped dramatically since the beginning of the year. So why would you go out and buy an investment property
when you have the rents going sell? So wouldn't you just sit on your wouldn't you just sit around a bit? Because that's going to factor in the health process. If you don't get a higher rent, health prices will will remain static because you know you need to be paying that, you need to be paying the mortgage, right and it's not great for investors to jump and at a time with rents are going down.
Ed, what do you reckon?
Well, to you Steve's logic, they're going sideways and so it's basically zero. But I'll just say what I'd say is two point one percent up is not zero, Steve, It's two point one percent, and that's over a three month period, and then you extrap play that out and all it's no longer zero percent. Now I agree that there are that the rental market is pretty tough at
the moment. Rents are going sideways. Part of the reason in Auckland for that is because rents jumped dramatically during during the floods, because we saw a decrease in the number of rental properties available. People had to move out of their homes while they were being repaired, and so rents went up by quite a lot.
Now that you don't.
Have that, it's that same stimulus, you are seeing them go sideways.
Actually, Steve, just before you, Steve, Steve, hold on there just percent. What's what's your position in the market yourself? What's because we know what Ed's position sort of he's an investor and he's works for IPS Partners.
Are you in an Are you somebod who wants to get in? You have got in? You want more property? You want to sell property? Where are you at?
You were funnily enough, But oh no, I rent the property that I own, but I also rent that live it. What's happened in the last year taken one hundred dollars a week on the rent. It's dropped from eleven hundred and nine to fifty. Had to drop it because there was no one around. We had to meet the market and also being renting the mar that dropped like a rocks from say March to October. You wouldn't believe the
stock that came on the mark, but believe it. And on a weekly basis, the rents were just dropping and they're still going south. Everyone to talk to is more houses that you see people normally sell their house won't because they don't want to get a love actually thrown on the rental market for the first time long time. Like I said, we're not just meeting the market and supply of new houses to rent, but we're actually got a massive oversupply. Takes a long time for that to work out.
Hey, thanks Steve, Steve, look at your lines a bit actually the lines a bit fi there, so I'll have to have to end it there. Yeah, any final comment on Steve's sort of and put their air law.
I think a lot of what he said was incredibly valid, and there are reasons to think that house bruces will go up. There are reasons to think that they'll go sideways for a bit. We just have to make our assessment of where that is. The One thing I'll say is that one person's experience is not necessarily the average.
So that's the reason why I often look at data macro macro just as opposed to one person's experience, because if you wanted to, we could go out and find somebody who's rent's gone up by one hundred dollars a week, and as we've found with Steve, there are people whose rents have gone down by one hundred dollars a week. At the moment, it kind of averages out to zero and the rental markets going sideways.
Hey, thanks for your call, Steve.
You will have read the other factor in the market is I imagine you keep up to date with what Tony Alexander's writing on it. And it's interesting because he does these market surveys and one of the things that was a surprised I think he's seen it as a
surprise is that FOMO is still quite low. I'm not sure if that was actually the big surprise in his piece, but in terms of people's averages, but also the number of people who are worried about their jobs and things like that, and plus he also talks about the uncertainty around the global trade, etc.
Does what did you what do you reckon? Yeah?
I think that it doesn't surprise me that there's not a lot of fear of missing out going on at the moment. The reason is that we have got a lot of listings on the market. In fact, that is one of the factors that will keep house prices lower than they would otherwise be is that we've got the highest number of listings on websites like One Roof that we've had for about nine years. So there is a lot of stock on there. So that does mean that
buyers feel like they can take their time. On average, they're not too worried about missing out on one house because they know that there's going to be another house down the road and they can see it on trade me and shop around a bit.
Now.
I think that does mean that it's a really good market to be a buyer at the moment, And that's one of the reasons why in that One Roof article I talked about I'm pulling the trigger on buying a house right now.
Yeah, And I would say that was I don't think anyone I would argue with that timing actually ed what about the what about the regional differences? Where do you think we are going to see the most energy in the market, Because Wellington certainly took a caning after it went up with the cheap interest and then bang not good news.
Yeah, I think Wellington's one of the areas that's going to continue to be sluggish when it comes to the property market. It's really interesting looking at the data down there, it does seem like there's not a lot of confidence in the market, probably because you've got that decrease in government spending or the government holding back a little bit in terms of spending money down there, a bit more redundancies, so I think the mood of the market will continue
to be a bit sheepish. One of the places where we are seeing the most or the fastest increases in house prices at the moment is Queenstown. Queenstown never really took a hit when interest rates really started going up, and as a country, our house prices fell about eighteen percentage.
Queenstown pretty much just stayed the same. It has gone pretty quickly, I think somewhere between five to seven percent, depending on which months you specifically look at but year on yeah, house prices have been going pretty well down in Otago. Also, Southland has been another area where house prices have fully recovered after their drop, and so we will see some variation around the country. Steve, for instance,
is in Auckland where house prices are quite low. Last time I looked there something like twenty percent below the peak of the market. Some other areas have fully recovered. It just so happens that there are two hour flights south of Auckland.
Actually just before you go to Catherine, who's waiting. The Queenstown market. Why is it such a bubble? Is it simply because it's really expensive property market and people who are buying and selling and that maybe they've got a bit more to a bit more room for maneuver.
I think that people get into who get into the Queenstown market have the money to be able to bid up house prices and pay what they need to get into that market. The other thing that tends to push up the average house price in Queenstown is the fact that people tend to get in there and build really expensive homes. That can be another factor that pulls up
that average. In fact, I saw in Core Logic Stater, Arrowtown has popped into the top ten most expensive suburbs for the first time that I've seen it in there.
Oh damn, I've been having mine aratime. But never mind, it's always just a fantasy for me, to be honest. But well, maybe not anyway. Twenty seven minutes to five, let's go to Catherine.
Hello.
Yes, Hello, I'm just wondering when you judge your percentages of how either rises or falls, how do you do that? Because looking at RVs at the moment, especially in Auckland, I'm talking about the housing market, the RVs are just completely out of whack. What do you think about the RV situation in Auckland.
Yeah, so I'll answer your second question first and then I'll come back to how economists put together their forecasts. So, at the moment, house prices are in Auckland are telling about ten percent under RVs. The reason for that is because those valuations were set back in twenty twenty one. Would you for a new set of valuations coming up in twenty twenty five, And the fact of the matter is that house prices will have fallen about ten to
eleven percent below that month where they set them. I think they set it in June twenty twenty one from memory, and so we see that actually around the country that because we set the RVs or the council valuations a couple of years ago, the housing market always gets out wack because house prices move and the RVs stay the same for roughly three ish years. I'll tell you one
other little little data point that's quite interesting. At one point I saw Thames Thames Corrimandal district house prices were selling something like forty percent above RV on average. And again the reason is because the RVs were set many years ago and then house prices take off and they do tend to get out of whack.
So with the Auckland market in my lifetime, I can never see we used to call it government valuation I've never seen a drop in a government valuation ever. Is do you think realistically they are going to drop the RVs?
Yeah, I do, And in fact we've seen that in Todonga recently. I think the average RV and Todong dropped somewhere between eight to twelve percent, depending on the suburb that you're looking at. Now, let's be clear that doesn't mean that your rates bill is going to go down because the way that governments or councils use the RVs is just to say how are we going to split
the rates that we're going to collect. So the councils sit around and say how much money do we need to raise out of rate payers, and then they use the RVs to split that amount up between all of the property owners. So you probably will see them come down. Unfortunately, you won't see your rates will go down. They'd likely to go up, but at least it's going to be a little bit less an airplant.
Because years ago it always used to be the situation where the RVs were extremely low. They were never really well, as far as I can remember, the RVs always extremely conservative. Where they've almost gone the opposite way.
Now, oh yeah, absolutely, my RV's I think definitely more than minors. But no, thanks Catherine, thanks for you Core take care. By the way, that's the best explanation i've heard of how the rates. People who think, oh, my property's goneup, I'm going to be paying more rates, it's not. It's just just the way that council decides how much you should pay of what they want to raise in rates. Nice and succent. There ed good work anyway, Right, let's
take some more call. Oh, by the way, sorry, I've just got a quick update on the the Hawk's Bay powercut situation. Transpower says two of its two hund and twenty kiler vault lines are offline and they are unsure how long it will take to be fixed. Transpower believes that all of Hawk's Bay is now without power. So a Transpower spokesperson says, lightning struck its equipment and Transpower is still assessing the.
Extent of the damage. So doesn't sound great, but he's hoping they really manage to get into it and get you back online sooner rather than later. Right, let's take some actually tell you what. We'll take a break.
We've got Kareem waiting and Ross. We'll be back in just a moment. We're talking about predictions for next year, the housing market. We're in recession?
Is it that bad?
Are we going to be six or seven percent growth? Like Ed McKnight, my guest from OPS Partners says back in attack, Yes, welcome back. This is the one roof radio show. I'm Tim Bevers, my guest is Ed McKnight. Be talking about your predictions for next year basically, and we've got the callers come in so kareem.
Hello, good afternoon boys, how are you doing good? I was wondering if you go do me a favor, pick up the phone and bring up the muppets, that green and the laver to tellent it's like a rich lungdon got a tax cat and how come the property rental is coming down? Ah, there were screaming, they were streaming the bottom of the alungs Chloe in the Parliament. The rich lundon getting a tax cat and there's nothing's going to pass on to the tenants.
And she was wrong.
The market is getting all the all the rentals getting a bit in the moment.
Actually, and actually what you're saying is probably if we go back in time, kareem, and if I can bring an ed McKnight, is that of course, when you make it more expensive to be a landlord, if it can get passed on at will, ed so, But I'm not sure that's responsible for the it's taking the pressure off, but is it responsible for the fallen rents?
Well?
Everything, Yeah, I'm just throwing this to d now, Kareem and you can come on and again in a second.
What I would say is it's quite difficult to split out the different factors, but it's certainly something that's going to contribute to it. So what Kareem's really talking here is the interest deductibility rules, because what Labor had done back in twenty twenty one was said, we're not going to let you count your mortgage interest in calculating your tax.
And what that really means is that landlords were being taxed as if they didn't have a mortgage, despite that they still had a mortgage to pay, and so you'd pay a whole heap more tax. With National coming in and saying actually we're going to treat property investment like every other business. You're going to get the same rules as every other business, then property investors go back to paying the normal amount of tax that they always used
to pay. So if you stop them from being overtaxed, then yes, that means that there's a little bit less pressure. It means that landlords are a little bit more willing to go out and make a purchase by another house add to the rental supply. So it's certainly I would expect it to have a bit of a flow on effect into the rental market, and that might be one of the contributing factors to the fact that we now
have quite a side what's going rental market. Rents are basically staying the same or going down in real terms.
Now, Kreem, you've got any further comment on.
That, You exactly explained it absout clearly because they're so out of touch. They're telling you to pay tax it's a business, but then telling you do not detect that your mortgage because of it it's an income. Is it a business or is it not a business? Just the way they're saying is is out of touch. I've got rental properties. I told my tenants I'm not going to put the rent out because I don't have to pay an extron taxes.
Yeah.
Yeah, you're preaching to the choir as well, by the way, because both of us about Ed and I would have the same view on that. And it's amazing the number of people who still say, oh, the landlord's got aant tax cut, when in fact, my view, which I think is the accountants view as well, is that it's a legitimate tax deduction.
So not really a tax cut.
But anyway, the other thing you've got to factor, and it is that a large part of that is that it was a tax cut relative to what would have been the cakes. So what I mean by that is Labour's rule where they were going to take away interest aductibility was only half phased in, and so that tax cut is compared to if the Labour's rule got fully phased in. So it's not quite the tax cut that some people sometimes make it out to be. It's just that we wouldn't see landlords paying even more in tax.
Okay, let's take some more calls. Where are we up to?
It is ross, good morning, afternoon. Sorry, yeah, I don't know where I was there.
Sorry, yeah, yeah, I think I need for thinking that's going to be six pcine. But I don't think it's anywhere there that I'd say more like two point two percine or two point five percent. But why I say that is because when economy is going well, and it's a Rocksdale economy, so does the housing market and there is fuel by Oh, hang on a board, the house for six hundred and now it's worth seven hundred. I've
got one hundred thousand dollars in equity. I'll go out and buy a new car, or do some multations for the house, or buy a rental property or rental properties. All that comes back. But this is the worst recession since nineteen ninety And the only the only thing I could have thought of, what Nichola Willis could have done different is say, look, we're in a really really bad stay. Their books aren't looking good. We won't do the tax cuts because they really aren't going to do anything for
a lot of people's. Some people it might so you to test them people that may need a real, real super hand somewhere. But to the point is that you know, until you do that, you know you would have put that money back into the economy to try and get the economy working, you know, and let the fairies go ahead. And you've got because you know, to me, you've got a bigger fair you've got more goods and services coming across the straight. You got more coming at you.
Across on a small boat.
Okay, Yeah, I mean that sort of ties into the whole confidence thing, doesn't it. That argument?
Yeah?
And the good thing about house price forecast, especially saying what we think it's going to happen over the next year, is we all get to make a good guess, and no one can prove us wrong today.
So I mean, it's awesome that we all keep to have our guess.
What I would say as well, just around the two percent, is just keep in mind that a lot of the data we're looking at is backward looking in terms of the economy. Right, So the economy has been pretty terrible over the last year, and yet over the last three months,
house prices still went up by two percent. Now, I agree that some amount of that is seasonality, but what you're saying is over the next twelve months, we're going to see what we saw over the last three months, even though the economy was pretty dire over the last three months. Now, I mean, the difference between two and a half percent and six percent is actually not that great.
I don't think we are miles apart.
But what I just say is often when we are at a time where we're not seeing house brasses change a lot, we think that it's just going to continue in the future. In fact, if we just see what we had over the last three or four months and have that continue over the next year, you will see roughly around five to six percent worth of growth.
I guess I should nail my prediction to the mask, which is massively uninformed, and it's more about what they call the vibe. I'm going to go tops four percent because I think there's going to be a bit of a I think in the middle of the year there's going to be a bit of activity, but a bit of lack of activity, should I say? And I'm just going to go with four percent, and then we can in a year's time, as long as you're still talking to me, we can meet in the middle and see where we got to.
Well, that's great news. It means you're basically inviting me back for same time next year. I'll see you then to.
Well, I don't see why not, you know, we'll log that in absolutely.
We'll just get a little bit of tinsel out, decorate the studio, have a little bit of eggnog, and away we go, and then celebrate who was right anyway, a few texts, just we've got the one the week will go to in just a moment. The forecast for rising house prices, as text to says, have been wrong for the last two years. The remarket will remain flat. Sprookers
doing their best, but the market will speak for itself. Well, the market will speak for itself, so in that respect that text is correct ed. Another one, no surprise, read the government books. This government has talked down New Zealand's economies for around one year before the last election, so it's got what it wanted. Borrowing to fund tax cuts not good. That's just an economy sort of discussion. Not so much on them on property. But I think yeah, there is in the text. It's fair to say a
fair bit of pessimism. I think that's probably going to be the most interesting factor as to the confidence, because once confidence picks up, then you.
Know your guess is as good as mine or better.
I think that's fair.
And the one thing that I would just point to is just keep an eye on the bank's willingness to lend, because I think a big part of whether whether somebody decides to go and buy house or not is whether the banks are willing to give somebody a loan. And the big drops and servicing test rates over the over the last month. Generally the public can't see that because we're looking at the advertised rates. What banks are saying they're going to charge you for a mortgage. What a
lot of people aren't keeping their eye on. Is the fact that banks have over the last month dropped their servicing test rates from about eight percent to seven and a half percent. That is quite a large drop just in just thirty ish days compared it to the start of the year. Again, they were testing at nine percent. Now it's down to seven and a half. The kind of fundamental fact is that all else being equal, banks
are more willing to lend. And I think that's the factor that's going to come in in twenty twenty five that a lot of people probably can't see excellent stuff.
Hey, we got to take a moment. The one roof the Property a Week is next. It's an absolute beauty and you can check it out. Book someone to share the address with you. After the break. This is the one Reef Radio Show one hundred and eight. Actually we're not calling for course. We'll be back in just a moment. Eleven minutes to five.
The one roof Propity of the Week on the Weekend Collective.
Yes, the one roof Property of the Week is a well. A lot of properties in Queenstown are quite stunning. It is ten Limerick Lane in Queenstown. It's five bedrooms, five love those five bedrooms, five bathrooms, two car garage. One's kind of expecting a three or four car garage with all those bathrooms. But anyway, the house is four hundred and thirty square meters. By the look of it, it
does look big. I wonder if we've got the right figure there actually, But anyway, it's described as style and sophistication, abounding with polished concrete floors, heated throughout, superb timber detailing, wine cellar and bar, as well as generous balconies on three of the four levels. Okay, let's go with four hundred square meters. Yes, definitely three of the four levels. Yeah, I think it's probably pretty big. Main bedroom residents is
it's sorry. The main three bedroom residents is configured over three levels, spacious living and dining, a designer kitchen.
Look, it's got it all. It's pretty new, it's pretty flash.
But the views, to be honest, you could probably have any old house in Queenstown and you put it in the right place, it's going to look magnificent. But Ed McKnight, what do you make of it? Two point six million r V but the estimate is three point five or range between three point one nine and three point eight four.
What's your pick go show?
I think I think Catherine who called up earlier, she'd have a go at that RV because that's going to be way out. It is absolutely stunning. You get any house on the hell in Queenstown that looks out over Lake Walker Tippu and you just think that is absolutely stunning.
I don't think there'd be many people who wouldn't look at the photo of the deck. So there's two photos of the deck, one with the chairs and the glass balcony and the view to die for, and the other one is the spar pool just sitting there and you can just imagine having a I've got to go buy that lotto ticket, I think, don't you that seem actually
I want your thoughts on it. At three and a half million, does that sound about right in terms of what you would pay if you had the money for a house like that.
To be honest, I thought that sounded quite cheap for Queenstown, especially with those sorts of views. I think maybe one of the things that's going to keep the price a little bit lower is that it is attached to a similar house right next to it. If you're spending that sort of money in Queenstown. Perhaps you want to go for something that's more standalone, doesn't have your neighbor right next to you. So maybe for the right buyer they'll look at that as a bit of a plus and say, oh,
that's great. Maybe I'll get a really good quality house a little bit cheaper than would otherwise be the case.
Yes, anyway, so that yeah, I'll give that addressed to you. By the way, if you want to go look at it again, it's ten Limerick Lane, Queenstown, and so go and check it out. And any other property in queen Stein check those out as well. Of course they're all generally pretty good. Hey, Ed, thank you so much for your contributions. During the course of the year. You're going to be taking how long are you taking off?
I'm taking about three and a half weeks off. We're going to North Queenstown, which is another word for Switzerland, which is basically Queenstown in Europe. So I'm going to kick off on Monday head over there. Oh so you're going to Switzerland to Switzerland skiing. I'm going to attempt to ski. I'm not sure whether whether it will counter skiing, but we'll give it a good go.
Which part of Switzerland We're.
Going to go to zoom Art which is the skiing town, and also Zurich and then all and in Milan.
Excellent.
Oh well, hey, hey mate, you'll love it. It's a stunning part of the where we're in Shamanee last year, which is literally on the border. You could ski off one side of the chair lift and you crossed into Switzerland with every return.
So yeah, have a great holiday, mate.
Thanks so much for your contributions and if people want to check out your work they can go to ope's the website address for OPS Partners.
Yeah, Opspartners dot coded inzad. That's about OPES Partners, dot coded inzad.
Excellent.
I have a great holiday, mate, and we'll catch you on the other side. That is one roof radio show, the last one for the year. We'll be back with the Parent Squad. John Cowen joins us talking about a whole bunch of things around Christmas and managing families and all that sort of thing. Eight hundred and eighty ten eight'll be taking your course. Lots to talk about.
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