Brad Olsen: Infometrics principal economist on new data revealing more Kiwis are moving

New census data shows more Kiwis are moving house than ever and it's raised questions among experts.

45 percent of New Zealanders have moved address over the last five years - a noticeable increase on previous data.

Infometrics principal economist Brad Olsen explains why this could be the case.

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Episode Transcript

Speaker 1 (00:09):
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Speaker 2 (00:16):
Brad Olson, Infametric's principal economist, is with us.

Speaker 3 (00:19):
Hello, Brad, good evening.

Speaker 2 (00:21):
We're moving house a lot at the moment, are we?

Speaker 3 (00:24):
It seems that way. The latest census starter out from
statsenz does show that over time we've been seeing quite
a lot of moving. Around forty five percent of New
Zealander's moved addressed over the five years between twenty eighteen
and twenty twenty three, slightly higher than the last five
year period, so obviously quite a lot of shift. Two

(00:44):
big trends that came through in the numbers, though generally
a bit more of a shift south than we normally see,
particularly into the likes of Otago and Canterbury, but also
a real shift where previously everyone was flocking to the cities.
Now it's a little bit it's not an exodus, but
definitely a bit of a shift where people are trying
to find an option nearby to a city but not
in the middle of the congestion. People seeming to like

(01:07):
those sort of fruiting areas outside the main urban centers
where they can get a better lifestyle offering probably a
slightly cheaper house price. Seems to be sort of a
bit of a sweet spot.

Speaker 2 (01:16):
Are we're moving more than we normally would, We're.

Speaker 3 (01:19):
Moving ever so slightly more so. Back in over the
five years to twenty eighteen, about forty four point six
percent of the population shifted address forty five point two percent,
so a little bit more over the five years to
twenty twenty three. Now, of course that's normal, like people move,
it's just often you don't make huge, huge moves. Seventy

(01:40):
seven percent of New Zealanders who moved within the last
five years, they still stayed within the same region, so
pretty close to you know, wherever original home base, whether
they're not sort of shifting massively. Sixteen point six percent
moved to a different region on the same island, and
that so again often people staying a little bit closer

(02:01):
to what they'd normally have. But put it this way,
I think what you're seeing and what you've really had
emerged since COVID has come through, is that working from
home is now much greater focus for people, and that's
opening up a lot of employment opportunities, a lot of
new housing opportunities, which means that the old idea of
go to the cities that's where all the economic activity
is isn't strictly true anymore.

Speaker 2 (02:22):
Okay, Brad, can you please explain how the ratings valuations
work for people who think that their property having fallen
should lead to a ratings decrease.

Speaker 3 (02:33):
Yes, and I can understand because normally, right, we haven't
gone through many periods in New Zealand's history where house
prices have gone down, certainly not by quite as much effectively, though,
the council is using the rating valuations to help split
up the rates pie. And so because there's an average
increase this year I think in Auckland of around five
point eight percent if you've had a so that's what

(02:56):
the average household would get. Now we also know the
average house has fallen in price by around about nine
percent over the period. So if you've had a nine
percent full you're still going to pay five point eight
percent more in rate. If you've had a larger than
nine percent fall, you'll probably have a slightly smaller increase
in rates. It'll go up, but maybe by just a
couple percentage points. If your house hasn't fallen quite as much.

(03:20):
If it's fallen by less than that nine percent, you're
going to pay probably more than a six percent increase
in rates this year only because the cost of delivering services
has gone up. There's more people. Everything's become a whole
lot more expensive, both for households but also for councils
who've got to buy some of those services. So the ratings,
the cvs, they're not a good measure of what your

(03:40):
house is actually worth at any given time. They's sort
of a snapshot. We almost shouldn't publish them. You do
wonder where a council should sort of say, look every
house and you know your house, Heather is going to
pay zero points zero zero one two percent of the
total rates bill and that's what you get.

Speaker 2 (03:55):
Yep. Is it possible that people that some people may
have had a fall in their house value that is
so massive that they end up with the rates increase,
a decrease, possibly number cent falls.

Speaker 3 (04:09):
Potentially, but it would also probably depend on the services
that are getting from the council, where they are in
the city. I mean, one thing that we noted from
Auckland Council is that some of the apartments in the
central city have seen some pretty big decreases relative to otherwise.
But again in the city, they're using a lot of
the resources that come through that, you know, all of
the roads, all of the wastewater, storm water, water services

(04:31):
and that, so it'd be a very unusual situation that
anyone's rates would outright go down. The biggest win you
can probably get is having a larger fall and not
too big of a rates increase this time around.

Speaker 2 (04:42):
Yeah, Brad, thank you as always appreciated. Brad Olson, informatric's
principal economists.

Speaker 1 (04:46):
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