September 20, 2025 • 40 mins
While it's all good and well to discuss where the property market is today, or try to predict the next OCR update, the key to predicting a property boom lays in market conditions during past booms.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk
sedbe News.
Speaker 2 (00:15):
It's Stay Talking Bars.
Speaker 3 (00:32):
Welcome back, this is the Weekend Collective and welcome and
welcome it. Well, welcome back to the Weekend Collective. Before
we get into this next hour, just looking a little
further ahead at five for the Parents Squad, we're going
to be talking about navigating your child's subject choices with
Google Sutherland. But as I said, and now it's time
for the one roof radio show, we would we discuss
(00:53):
all things property, but in one particular one or two
particular things. You can call us on eight hundred and
eighty ten eighty in text on nine two nine two
and today. So last week, you know, look, we've had
a bunch of property booms. But in the week that
has been I had a discussion with a caller about
property prices in general, and one of the things that
came up was a bit of a two and a
(01:14):
fro and about who was responsible and how for when
property prices went crazy. And in short, the caller was
talking about John Keyes policies sending the property market into orbit,
and I mentioned that the cheap money under the Labor
government following the COVID stimulation sent the property prices through
the roof, where people spent up large because you could
(01:36):
get money for next to nothing. And so look, while
it's always good to discuss where the market's today, or
you know, to try and predict, you know, what's happening
with the cash right and all that sort of thing,
I thought it'd be a good discussion to look at
the conditions and see if we can work out what
actually led to property booms in the past, so maybe
we can predict whether another boom's coming and at what
(02:00):
point did real estate get out of reach for the
average buyer. But of course people always tell you that
it's always been tough. So was it political decisions? Was
it cheap money? Was it immigration? That's a political decision,
of course. What do you think we want your cause?
What have been the worst booms if you want to
look at it that way, in terms of putting property
(02:21):
out of reach for first time buyers and others. What
have been the biggest booms, but what has driven it?
What have been the causes of those and who was
to blame? What was to blame? We want your calls
on eight hundred and eighty ten to eighty and you
can text on nine two nine two, of course, and
to discuss that we are are joined by Property Apprentice
investment coach Debbie Roberts is with us today. Debbie, how
(02:42):
are you going.
Speaker 4 (02:43):
I'm doing great, Thanks for having me.
Speaker 3 (02:45):
You're just getting out of a bit of a lurgy,
as you confessed earlier of it. It's there's a few
bugs going around, aren't there.
Speaker 4 (02:52):
Yeah, and this year's flew I think was nasty, nasty
just about everyone I've spoken to you so that they've
had it and or still recovering, so yet not brutal.
Speaker 3 (03:01):
It's good to see it.
Speaker 5 (03:02):
Now.
Speaker 3 (03:05):
What was our last property broom? Let's look at the
broom boom? What was the last property boom?
Speaker 4 (03:12):
So the last property boom was just during COVID and
leading up to the peak of the market, so yeah,
and it was an absolute stonker. So yeah, we've I
mean unaffordability. You know, housing has been unaffordable in New
Zealand for decades. It has been getting more and more
unaffordable since about the nineties, so you know, it's not
(03:36):
a new trend. But certainly there were some things that
happened leading up to the peak of this last boom,
which had a major impact on house prices. At the
end of the day, it all boils down to supply
and demand. You know, when when demand exceeds supply, prices
go up, whether that's housing or market rent or anything
(03:56):
like that. So yeah, if we want to stabilize house
prices a bit more, we need more properties.
Speaker 3 (04:02):
Yeah, because I've every going back to the John Key years,
I was thinking to myself, how because it's easy for
people to sort of blame a particular politician or a
particular policy. In fact, did Roger nomics did that contribute
to any sort of property boom? Or was that a
bad time?
Speaker 4 (04:21):
But oh god, I don't remember. I'm way too young. No,
I honestly don't remember. I've looked at some data going back.
If we look at at house prices history of median
values in New Zealand going back to about nineteen ninety two.
The biggest boom that we've had since then was during COVID,
(04:45):
but the one prior to that was just leading up
to the Global Financial Crisis.
Speaker 3 (04:50):
So actually, now put that in context for me, when
was the GFC?
Speaker 4 (04:53):
Oh that was THEFC was the end of two thousand
and seven?
Speaker 3 (04:55):
Oh, that was just before Oh, because then Bill English
came in and apparently he was quite a good Minister
of Finance and helped us through that. And was that
when we had the talk the rock star economy? Following that?
Speaker 4 (05:07):
Yes, absolutely, so yes, so following that we did have
that rock star economy. So it's interesting, you know, following
on from what your previous caller talking about, the two
biggest booms since the nineties have both been under labor
or labor colored listian governments.
Speaker 3 (05:26):
Oh oh, okay, so we're playing that it's all labour's
fault generally, No.
Speaker 4 (05:30):
Because I mean, at the end of the day, I
don't think it really matters who's in power. Like I
don't care who people vote for. It makes no difference
to me as far as I'm concerned. The fundamentals of
property investing stay the same.
Speaker 3 (05:42):
Because there was a time. Maybe it's just because in
my consciousness as an adult, you remember particular errors, But
for me, if I look back in hindsight, there was
a time as well when I think people worked out well.
There was the message from John Key, I think, was
you need to be provisioning for your own retirement because
(06:05):
Souper's not going to do it for you as much
as you need.
Speaker 4 (06:07):
And that still rings true today doesn't And yes it does.
Speaker 3 (06:11):
And then it's like everyone woke up to the idea
of leverage that basically, because of what you can borrow,
you can buy something and the capital gain will be
there for you, which will get way ahead of what
you can do with effectively what your depositors if you
(06:31):
just invest it. And everyone woke up to this idea
of leverage. Then they saw lots of other people making
money and thought, God, I need to do that too,
and it became a bit of a bit of a craze.
We difinitely went through a phase when we went all
of it party about property.
Speaker 4 (06:46):
Do you think absolutely? And look, this happens every boom,
you know, every single property boom. It's you know, we
always sort of joke about how whenever the conversation around
a barbecue over summer is whether or not people should
be investing in property, chances are that's the time to
start getting really nervous about buying property. You know, when
everyone's talking about doing it, it's because the market's booming significantly,
(07:09):
So yeah, time to be careful.
Speaker 3 (07:11):
One of the things that I think also in the
John Key years was I haven't got the figures in
front of me, but I do tend seem to remember
that we did have quite relatively high net migration as well.
So we're bringing a lot of so some people would
centically say, looky, you've got a lot of people in
the country and artificially pushed demand up and we sort
of we boosted our economy on the back of real estate.
Speaker 4 (07:32):
Yeah, our net migration was very strong leading up to
the peak of this last boom, you know, following COVID.
So yeah, so migration was ridiculously high. It was almost
twice the long term average. Long term average is about
thirty thousand people a year net migration, so you know,
(07:53):
people coming in versus people leaving.
Speaker 3 (07:55):
We're over one hundred thousand one stage, won't we.
Speaker 4 (07:58):
The top figure I remember off the top of my
head was into the nineties.
Speaker 3 (08:01):
Yeah, net migration, that's net migration.
Speaker 4 (08:04):
Yeah, it was massive, So you know that that that
caused a bit of a shortage and property in a
number of different areas, and then developers picked up their
game and started building more, which we needed. And yeah,
so like I think, I think it's a bit of
a moment in time where we're at at the moment,
you know, some people are talking about an oversupply of property,
(08:26):
but you know, we're starting to see sales picking up now.
Net migration at the moment is only about half of
the long term average, so it's not going to take
much before that amount of supply in the market gets
soaked up pretty quickly.
Speaker 3 (08:41):
With the last sort of boom, which of course did
sort of go. I don't want to use the word
bust either, but certainly there's been a turnaround since since
the last boom where I would have thought that the major,
the big thing was money was just so cheap, and
then you know, they saw prices going and people thought,
I've just got to get in there now. Yeah, and no,
and we've had such a prosperous time and real estate
(09:03):
it was almost like people couldn't imagine the bad side
of it.
Speaker 4 (09:07):
Absolutely, And in my opinion, there were three key things
that went wrong leading up to that peak of the boom,
and I think all three of them were pretty unavoidable.
So I can get quite opinionated on this if you want.
Speaker 3 (09:21):
Well, we're not here to have you sit on the fence, Okay, excellently.
Speaker 4 (09:24):
Let me get correct.
Speaker 3 (09:25):
Okay, let's give us some things. By the way, eight
hundred eighty ten eighty, what do you reckon was responsible
for the boom? There is a broader question, is our
boom's a good thing? Because if you're on the receiving
end of of a profit on the back of an
investment and a boom, you'd say booms are great. But
if you are a first home buyer who's maybe not
(09:46):
managed to save up enough, a boom, maybe he's not
such great news for you. So would you recognize when
a boom was coming, oh, eight hundred eighty ten eighty,
and as a boom a good thing? Or are we
better to have sustained growth at a certain rate, which
we're sort of sitting on the fence a bit. Anyway,
over to you now, well you've shut your laptop.
Speaker 4 (10:06):
Wait, hold your phone.
Speaker 3 (10:12):
Okay, the three things you were talking about?
Speaker 4 (10:14):
Yeah, so the three things. So, first of all, we've
had about a seventeen percent decrease since the peak of
the boom. But I think it's important to remember that
we had over sixteen percent increase in the two months
leading up to the peak of the boom.
Speaker 3 (10:30):
So when we looked two months in two months, two months.
Speaker 4 (10:33):
And that's based on the median values. So the three
key things that happened, in my opinion, which caused this
massive spike in house prices, which sureer's eggs resulted in
a massive correction. First thing that happened the government at
the time announced that they were implementing changes to the
Triple CFA, that's the Credit Contracts and Consumer Finance Act.
(10:54):
And you might remember that was where we started seeing
headlines because banks were caught in that net. You know,
it was designed to protect low income people from low sharks,
but banks were caught in that and you might remember
hearing the headlines about first home buyers being turned down
for a home for a mortgage because they brought too
(11:15):
many cappuccinos or they ate too much.
Speaker 3 (11:17):
Case avocado and toyster.
Speaker 4 (11:20):
Absolutely yeah. So it banks were literally going through your
bank statements lined by line and seeing what your spending was.
So that was the first thing. Banks tightened up their
lending criteria overnight. It has relaxed since then because of
amendments to the Triple CFA. But this all happened just
a few months before the peak of the boom. The
(11:40):
second thing that happened was, in my opinion, the Reserve
Bank took way too long to reimpose the deposit restrictions
that they lifted during COVID, So you know, when the
property market started absolutely booming, I think the Reserve Bank
should have reimposed deposit restrictions much sooner to take some
of that heat out of the market. And the third
(12:02):
thing that happened was that the Reserve Bank, in my opinion,
took way too long to start fighting inflation. So when
inflation screamed upwards, they took too long to start lifting
the ocr to fight inflation. So it all happened, created
a perfect storm, and yeah, buyers were panicking.
Speaker 3 (12:24):
Actually, and tied into that, if my memory serves me correctly,
is the fact that the government of the day had
changed the Reserve Bank's remit not just to controlling inflation
but also to controlling unemployment, wasn't it. Which are two
conflicting things which might have been meant that there was
a more of a handbreak on the Reserve bank reserve
(12:45):
reversing what might have been a mistake. What was a mistake?
Speaker 4 (12:49):
Yeah, I mean, and you know, to be fair, I'm
talking with the benefit of hindsight.
Speaker 3 (12:55):
Look, let's enjoy hindsight judging as it's literally the whole
point of this hour is using our hindsight.
Speaker 4 (13:01):
To see see how things could have been done better.
So yeah, in that really short time frame, anyone who
had a pre approval for lending was literally told, if
you don't find something to buy before your pre approval expires,
you're going to need a bigger deposit because the Reserve
Bank had reimposed those restrictions. The mortgage is going to
(13:21):
cost you more because interest rates were rising. And what
was the third thing? Oh, you're so you're going to
need a bigger deposit and your mortgage is going to
cost you more, and you might not be able to
get the same amount of lending as you had for
your pre approval because the banks had tightened up their
lending criteria.
Speaker 3 (13:38):
Hey, just quickly, what was it Wellington that had the
biggest rise? Because Auckland certainly went I mean in terms
of percentage of properties, it was more about just that
literally the hundreds of thousands of dollars more that houses
in certain areas cross. But I seem to remember that
Wellington really went bonkers, didn't it.
Speaker 4 (13:54):
Wellington did go bonkers, and part of that was because
of the large number of employees working at the government.
Auckland absolutely had a massive boom, and I think part
of the reason for that is because when we get
migrants coming into New Zealand, they tend to settle in
Auckland first, so you know, we had huge demand on
(14:15):
rental properties. And then as they you know, as they
got to the point where they were able to buy
their first time or in New Zealand, that put extra
demand on pricing there too.
Speaker 3 (14:25):
Right, we want your cause on this. What do you
think was have been the reasons that we've seen a
property boom? Would you actually be able to predict what's
going to happen based on what we're going to reflect
on now, but also as a property boom in your eyes,
a bad thing or just I don't know, something that's
part and parcel and we shouldn't worry about it too much.
(14:45):
I eight hundred eighty ten eighty text nine two nine two.
It's twenty one and a half past four. That can
I take news talk said be This is one rufradio show.
My guest is Debi Roberts from Property Apprentice. We're looking
at past booms, what caused them? And could you eight
hundred eighty ten eighty.
Speaker 6 (15:02):
John, Hello, yes, good afternoon, the whole you can hear me.
There's three items I see that was the problem even
if we look at the last one, and that was
that the ad minister or mission the governor let the
interest rate for and inever put the bridge on it.
(15:25):
The second items was the government itself. One they should
have said, look, yes you could come into New Zealand,
but this is where your vehicle live, and would say
drawn a line with the new plomas and that the
assouse of that, not norse of that. And the third
item is you know, the government also didn't look further
(15:48):
enough the pain that was going to cost people, because
I've dealt with people and they bought you know, houses
a million bucks eight hundred sous at two percent, and
they could do it quite easy. But now no, And
of course when the how process go up, you can
guarantee that your materials go up the two hour morning.
(16:11):
And now for it to get back up, I don't
think so, because I see people have now starting to
realize well, yes, yes it might comes down. But what
happened because mister Trump is on the steering wheel, and
it's going to come and I might go up again.
And I think that I don't can't see your property
boom at ressent moment because people are too scared, especially
(16:33):
tends the terrace from America that start to hit us. Yeah,
and you know, and everybody crying, ah point nine percent. Hang,
I already at one point nine before get a grip
on the situation. But everything got to adjust. But I
can't see a property boom happening for another eight years.
Speaker 3 (16:50):
Eight years, that's that's a specific number, actually, John, how
do you pick eight years just out of curiosity?
Speaker 6 (16:56):
Well, before it do we get rid of mister Trump
and a all this three Well, that's.
Speaker 3 (17:00):
Three years you're going to get You're going to get
the hate mail on the TIC. But I'll keep quiet
on that one, John, that's three years.
Speaker 6 (17:08):
I don't worry about it. I'm not worried about it. Teller.
The other thing is what you've got to remember is
money is now tight because and this is what creates
it too. There's not enough jobs and firms are still
building over and therefore people are now a lot more gage.
And I don't think before you see new businesses arrive
(17:29):
again I think you look at about five, six, maybe
seven years before you see any movement. I know to
go the strong heart, but personally I can't see it,
and I can't see a boom for ages.
Speaker 3 (17:44):
To me, your biggest point is that people have lost
trust that their money might be as safe as they
might have fourteen years ago in property.
Speaker 6 (17:52):
Yes, you're right, you're right. Once the pototome says, people
sticking in property, but still the old value still stands.
You never lose money on land, but you won't lose
money on property.
Speaker 3 (18:04):
Okay, okay, I'm going to keep you on the line
while my debut digs into that one. I don't I
mean property is land really unless he's talking about apartments
versus freehold?
Speaker 4 (18:14):
Well, yeah, I mean he's you've got an a. You've
absolutely got a point. You know, land is the thing
that increases in values because the dwellings that sit on
those lands tend to depreciate over time. You know, they
lose their value the older they get. So, yeah, you're
absolutely right. Land is what where the value sits?
Speaker 3 (18:32):
How much do you think? I mean? I think John's
point about temperament, it's is there a certain level at
which trust in the property market is the no brainer.
Got got a real head of steam. It wasn't just
a panic, it was sort of there was a mixture
of people think I've just got to just got to
get on, plus you know, the motive of leverage and
(18:53):
all that. But underpinning it all was a fairly strong
level of trust that it was a no brainer. Do
you think.
Speaker 4 (19:00):
Look, and this is this is part of the issue
when it comes to investing in anything. You know, when
when things are increasing rapidly, everyone wants to jump on
the bandwagon, like you know, gold, for example, gold has
increased significantly in value, so there's lots of people that
are now going, oh, we should be investing in gold,
whereas you know, you could also argue that it's increased
(19:22):
significantly and that's not likely to carry on forever. So
you know, it's it's about counter cyclical investing in my opinion.
But when it comes to property booms, there's actually quite
a few different things that line that have to line
up in order to create a boom. So five different things.
Speaker 3 (19:41):
Yeah, okay, and let's go. Let's let's roll. And by
the way, when you disagree with Debbie, jump on the blow.
Eight eighty ten eighty Yeah, we can fight it out, okay.
Speaker 4 (19:51):
So Number one property affordability. So affordability is a combination
of property values and also interest rates. So at the moment,
values are down and interest rates are down, so property affordability.
It's still not affordable by a long stretch. Because to
be affordable, like if we look internationally, they reckon three
(20:14):
times your income is what is needed for help to
be affordable. Yeah, and I don't think it's ever been
like that in New Zealand. We'll certainly not a few decades.
Speaker 7 (20:23):
Now.
Speaker 4 (20:23):
It's currently sitting I've got this written down somewhere. It
is currently sitting at about six and a half times income.
Speaker 3 (20:31):
So affordable that is, actually it's worth it's worth mentioning
it and reminding ourselves of that because a lot of that,
Oh probably prices are good, you know, first home buyers
are getting in and there's almost this narrative that suggests
it's much easier whereas it's less difficult, but it's still
bloody expensive to buy house.
Speaker 4 (20:52):
So six and a half times your average income is
considered to be seriously unaffordable. So you know, now it
takes about ten years to save a first home deposit, Yeah,
which is still a lot time, you know, but if
you start when you're in your twenties, you could buy
home in your early thirties, so it's not too late.
The soon as you start, the easier it is. It
(21:14):
was ten times income in late twenty twenty one, so
you know, we're a lot better now than we were.
So housing affordability is definitely improving. So that's the values
and interest rates. Unemployment levels, now, this is another key
driver of property booms. So when unemployment is high, there's
(21:34):
less people who can buy houses and less certainty in
the market. So yeah, so I think that's one of
the key ones to watch because at the moment unemployment
levels are high. The next one is net migration. We've
already talked a little bit about that, so it's way
down at the moment. So when that turns and when
unemployment levels start getting better, that's two things. Building construction,
(22:00):
so you know, we need we need dwellings to be built.
One of the things that we've seen, you know, leading
up to the peak of the boom, we saw massive
increases in construction and that has caused a bit of
an oversupply in some areas. Of certain types of property.
Speaker 3 (22:15):
So somebody sent me a link saying that there's some
parts of New Zealand where the supply is outstripping the
growth in the region. Yeah, so literally the more houses
been created for few and few people who are arriving. Yeah.
Speaker 4 (22:27):
Yeah, So, like there's so many things that you need
to look at, and vacancy rates as well. Those are
all the key things that cause property booms. So yeah,
my opinion is that the two key things to watch
is net migration and unemployment levels. Now, we just had
a bit of a shocker when it came to the GDP. Yeah,
(22:47):
so you know, that's showing the economy contracted it.
Speaker 3 (22:51):
To be honest, I wasn't particularly surprised by that.
Speaker 4 (22:54):
It was a lot worse than most bank economists and
other economists were expecting, and I think that was the shocker.
You know, even the Reserve Bank was expecting one point
three percent reduction. Most of the bank economists were saying
point five, but it was it was horrific at some
point nine drop.
Speaker 3 (23:11):
So yeah, let's take some more calls. What do you
reckon eight hundred eighty, ten eighty and which are those?
And actually, as Debbi's mentioned, those five things there, Which
of those would you be looking for in particular? Which
might think all things might be turning around soon, Not
that they look like they're turning around anytime soon, but yeah,
your reckons. Right, let's go to Sue. Thanks for holding.
Speaker 7 (23:32):
Oh oh good, Yeah, I wanted to fill in a
gift going back. Oh when Roger Douglas was in three
strates were up to twenty three percent. Yeah, yeah, they were.
And I think the the cycles started after the sheer
(23:59):
market question eighty seven. That's when I saw the first one,
because people don't want to put their money into shares
and that anymore.
Speaker 3 (24:10):
Actually, that is as Deb's just said, So I think
you've nailed the point we've forgotten to mention. Absolutely, people
fell out of love with shares because they've been bitten.
Speaker 4 (24:19):
Yeah, and at the moment it's the opposite, right. Share
market is increasing quite nicely, so people in property markets
not so.
Speaker 8 (24:27):
Yeah.
Speaker 7 (24:28):
Yeah, and that was a very of course I was
doing the house in back then, but that was a
very interesting time. But I think the cycles go every
ten years basically, and in recent years it was really
(24:52):
you know, yeah, the cheap money was a bit of it,
but really trying to build an economy on the property
market and tourism. Those two things actually saw speculators coming
here buying up large parcels of land and land banking
(25:15):
and forcing up values. They did it in the suburbs
as well. We had lists and lists of these places.
Speaker 9 (25:23):
Ah.
Speaker 7 (25:24):
And also we had hundreds I forgot how many, but
we had hundreds and photos of all the ghost houses
in Auckland. I think it was forty four thousand there was.
They were saying at that time, oh, well there's a
property shortage. But actually no one except for me mentioned
(25:46):
the ghost houses. And I had proof of it as well.
You see, but that's that'd.
Speaker 3 (25:51):
Be a lot of that'll be a lot of photos
so to have done.
Speaker 4 (25:58):
Yeah, we had We had a go a ghost house
across across the road from one place that we were
in at the time, and my husband kept trying to
buy it. So he was sticking letters in the letter
box every week, so you know, we're interested in buying
your property because it was empty and the grass was
overgrown the gardens where weedy airs. So he gets sticking
(26:19):
letters on the letter box saying, hey, I'm interested in
buying buying your house. Let me know, if you're interested
in selling and every week you dropped something in there
until they removed the letter box.
Speaker 5 (26:28):
Oh well, at least that somebody, somebody'd actually, I mean,
if you bought, I mean, if you bought at an
expensive time, then you don't really want your house to
be empty right now because you're just losing money.
Speaker 3 (26:41):
So I actually I don't know how many but how
has this said been? I mean, the AI tells me,
gives me a range of reasons that that places are empty.
One would be deliberately empty as you're referring to. Then
there's between tenancies and renovation and repairs, and there's holiday
homes and stuff.
Speaker 7 (27:00):
Yeah, did you know one of the biggest drivers of
all and I think it's to do with people, it's
greed because I can remember, you know, to Westomachy Road,
Yugobar lovely property or a biog bit a land for
ten grand up there.
Speaker 3 (27:19):
Well, well, yeah, what year are we talking nineteen sixty
three or something? Okay, just really, I.
Speaker 4 (27:26):
Mean, you're you're absolutely right though. Fear and greed has
a huge amount to huge cause of property market drives
and also the shear market. It's fear and greed that
drive markets.
Speaker 3 (27:39):
I mean, I guess one person's greed is another person's
ambition if you I mean it's it's sort of one
of those pejorative terms where okay, if somebody's I don't
know when is ambition greed? That's the thing because if
you are, say someone with just your own house, and
you want to buy an investment property because you want
to be able to invest in your children's future and
(28:00):
give them something to go with, someone might say you're
just being greedy. You might just say, well, I'm just
being ambitious. Family. It's it's a problematic word, isn't it, Sue. No, Really,
someone trying to get a house so they can get
ahead for their kids, an next an investment property.
Speaker 7 (28:16):
Well I wouldn't say that that's screed, but I just
wanted to say tu to Debby. Now I can remember
before those attitudes were there, when there was a family
benefit and people could capitalize them by their first home,
when they tuned puckeringa from Ortsons and or farms and
(28:38):
that into you know, these house lovely houses. And it
was actually rots A Douglas that cut that out and
brought in the textable family support.
Speaker 3 (28:51):
You see, Yeah, we're getting a little bit off the
topic there, but I think one of Sue's points at
the start was it's the falling out of love with
one area where we thought we had our prosperity nailed,
and the falling in love with another.
Speaker 4 (29:05):
And it's interesting because when we look at what drives
the property market and what just influences the property market,
that's one of the influencers is whether there's other investment alternatives.
So it influences the property market, but it doesn't actually
drive it through to the next day.
Speaker 3 (29:22):
Which is why I wonder, and we've got to take
a break. We'll come back with our callers in a second.
I don't know if we're ever going to see quite
those conditions of member when everyone was in love with
Brilly shares and all that sort of thing and everything
when we went through the roof and then suddenly, you know,
we had the stock market crash and a lot of
people never trusted shares again, and so they went towards
it's property, whereas it feels that when it comes to
(29:43):
share markets and that sort of investing, there's a lot
more analysis and research available and advisors out there who
can help navigate your journey there where we might not
see the same crazy like, oh here, this is the
hot share of the day. Pile in, pile out. Yeah.
Speaker 4 (29:59):
And I think, you know, some of the things that
happened leading up to the peak of the last boom,
I think that caused a lot of blood in the water.
You know, there were an awful lot of people that
were promoting new builds as investments because they had the
interested actibility where existing properties didn't. So that drove mum
(30:19):
and dad investors into one sector of the property market,
which increased demand there, which push prices up.
Speaker 3 (30:25):
By the way, it's worth remembering that MB study in
twenty twenty showed that seventy seven percent of New Zealand
property investors only own one property. Yeah, there remaining twenty
three percent other ones. Maybe they're the ones that SO
would say they agreed.
Speaker 4 (30:37):
Yeah. And I also think it's important to point out
that eighty five percent of all rental properties in New
Zealand are provided by private landlords and thirty three percent
of the population live in rentals.
Speaker 3 (30:49):
So got a call on the morning, would say there's
lies and damn lies, and then their statistics, yep are
But you know, I pushed back against the little It
would be fair to say it's nineteen and a half
minutes to fire back and attackest news talks that'd be
with Tim Beverage and Deba Roberts from Property Apprentice is
with us talking about booms past and can we predict
(31:10):
the future. I don't know your calls, Douglas Hello, oh.
Speaker 8 (31:14):
Hello, Yes, I just wanted to give an example from
myself of property. I've never actually lost money through property.
I've made it enormous amounts of money and gone through
some hard times because of basically I've gone where I
could go, and partly it was my job. I was
a teacher, so I could teach in most places and
(31:36):
that helped. But I do think that a lot of
people sort of like, I mean, if you're going to
waste money on cars, you buy a Ferrari and you
lose all your money whereas you know, and or you
go to some fancy part of Auckland or fencing part
of Wellington or somewhere. I mean when we first got married,
I've sent to Wallstone. When we got married, we bought
(31:57):
a little place in Plemison.
Speaker 3 (32:00):
Yeah.
Speaker 8 (32:00):
Seventeen thousand and the mid seventies. Seventeen ratings and when
we when we started having kids and stuff and getting
a family, we moved to Wadstown and had to buy
a place for thirty grand, but we sold the place
and I mean we just doubled our value on the
place in Plymuton. So we didn't you know, didn't have
a didn't have a huge boards. We had a big book,
(32:22):
but not a huge boogage. And then after after getting
divorced from my wife and she acted on the bank.
I think banks are very conservative and usually wrong with
their house prices, partly because they don't want to lend
your money.
Speaker 3 (32:37):
Are you saying that your secret to your success was
having modest ambitions every time you bought.
Speaker 8 (32:43):
Oh well, I do think that helps. But also I
mean name the banks or anything, because it's it's all
of them basically. But bankers tend to be conservative because
they don't want to lend your money, so they're not
going to say all your house is worth so much
simply for business reasons. And then of course they caught
out when when when you when you actually want to
(33:03):
sell the place because they thought my house was worth
a hundred pounds.
Speaker 5 (33:07):
So what do you think?
Speaker 8 (33:07):
What do you think?
Speaker 3 (33:09):
What do you thinks driving the bones, then, Douglas, what's
your take on it?
Speaker 8 (33:12):
I think it's stupidity, I really do. I just think
it's stupidity. I mean, this place is meantly with meantly
with one hundred thousands, and I had people who were
offering me, although they were terribly nice people, and I
didn't buy from them, but they were offering me three
hundred and fifty thousand the house in wads Town.
Speaker 3 (33:29):
So have we been cured of asked stupidity by recent events?
Speaker 7 (33:34):
Oh?
Speaker 8 (33:34):
I think it's a human I think it's a human thing.
I'm not going to say stupid. I don't say the
bad people or silly people. It's just a human thing.
And you don't you don't necessarily get all the correct
information from the people you should. You bring up your
bank manager or whoever it is at the bank, and
you expect them to tell you stuff and for it
(33:54):
to be gold plate, and it should be really, but
it's just not. I mean, I sold my place in
wade Town for three times. That's what the bea said
it was there.
Speaker 3 (34:06):
Well that's good, that's a good win, mate. We got
lots of calls to get through. I appreciate that I
mean emotion. Really, let's not say stupidity, but that's what
a crazy is all about. When everyone's phomo, yeah, and I.
Speaker 4 (34:17):
Think, you know what something not calling people stupid, but
just people don't know what they don't know. So, you know,
when interest rates were around two and a half and
two point nine to nine percent, people didn't know that
that wasn't normal, and so when they saw how much
their mortgage was going to cost them, you know during COVID,
they were like, well, this is pretty cheap, this is
(34:38):
we can do this. But they didn't realize that the
long term average interest rate is about six point three percent,
you know, so when interest rates started to climb, a
lot of people really got into trouble.
Speaker 3 (34:50):
And a lot of people didn't get bitten by breaking
that rule because they made a lot of money and
this sold out, et cetera. It's the people who come
on along later who just think, okay, four and a
half percent interests great, let's rock Yeah.
Speaker 4 (35:02):
Absolutely, And then you know people that purchased right at
the peak of the boom, especially the ones that bought
off the plans, you know, new builds off the plans
when properly values dropped a lot of the time they
couldn't get lending to settle that deal because they needed
a registered valuation in a lot of cases which didn't
stack up, and interest rates were higher. So, yeah, it
was it was blood in the water, right.
Speaker 3 (35:25):
Let's go to David High.
Speaker 9 (35:27):
Yeah, High there. I was listening to talk about radio
while back, and I rang up and he'd been a surveyor.
He said he was working through the seventies and eighties
and somebody had developer would buy a piece of farmland,
decided to turn it into residential and from the day
(35:50):
he bought it and came in and said, here's the
plot I've signed up for that subdivided through all the
roads and sections and that type of thing, and get
it through the council. It took them six months, said
those sections are on the market six months later.
Speaker 3 (36:07):
Now, yeah, sorry, I think we losed over there. Sorry, sorry,
I lost you there second. That was my fault.
Speaker 9 (36:19):
Oh okay, Anyway, I used to be able to buy
a section in those days. You said the price of
a section was the annual income of a tradesman, an
electrician or a builder or whatever. There was the price
of the section. It's the land that's gone up rather
than the building costs. While both have got up, the
majority of it's been in the land and that's because
(36:42):
of all the complicated resource management that carry on either
on the north Shore and awkward and a big Peterkawa
fell down on a residential apartment block land. It took
three years and it's only just been finalized for the
(37:05):
permission to remove that tree.
Speaker 3 (37:07):
Yeah, that's crazy, isn't it. I mean, that's I think
that's some of the difficulty around. It just makes everything
more expensive, doesn't it. Debbie.
Speaker 4 (37:13):
Yep.
Speaker 3 (37:14):
Anyway, Hey, look we've got to take a quick moment.
We'll be back with the one roof properly of the
week in just a moment. It's ten to five, the.
Speaker 1 (37:21):
One roof property of the week on the Weekend Collective.
Speaker 3 (37:25):
Yes, the one roof property of the week, I think
the Debbie, have you seen the one roof probably the
week this week?
Speaker 4 (37:30):
I had and it is.
Speaker 3 (37:32):
Look, look, most of our property of the week's are
pretty spectacular. This is waterfront lifestyle on the Hibiscus Coast Highway.
It's apparently designed with family living in mind, perhaps not
a family budget. The home is expansive, versatile, It offers
multiple living areas, four bedrooms, a study, fully self contained
area containing a bathroom in kitchenette. It is, it's five bedrooms,
(37:56):
three bathrooms. It sounds all right, modest, two car garage,
garage with a house of three hundred and thirty nine
square meters.
Speaker 4 (38:06):
Views to die for.
Speaker 3 (38:08):
I think that's the reason for the estimate of three
and a half million, basically, isn't it. And the I
mean the Hibiscus Coast, that's the thing. Look at the
beaches and the views absolutely absolutely stunning.
Speaker 4 (38:20):
Isn't it a big chunk of land on that too.
Speaker 3 (38:23):
Yeah, so with the spar pool, and they've staged it
really well as well, four well fenced grazing paddocks, two
sets of yards, and as well as enclaves of native bush. Actually,
I guess three and a half million. If you won
the powerball, you'd be thinking it makes a nice little
spot for what do you reckon? Would you fancy a
(38:45):
property like that? Debbie?
Speaker 4 (38:48):
Not personally, but you know, I like it's absolutely got appeal.
The views. The views are incredible, you know, And I
mean if there's anything like coastal erosion or cliff you know,
because it looks like it's on a bit of a cliff,
so there's plenty of room to move the house if
you needed to.
Speaker 3 (39:03):
It's actually it does look like it's sort of more
more gently sloping than at first impression.
Speaker 5 (39:11):
Doesn't.
Speaker 3 (39:11):
It's not quite a drop off that would.
Speaker 4 (39:13):
Be, and it's not right on the edge. I'm exaggerating.
It's beautiful.
Speaker 3 (39:17):
I think if there's a boat in the driveway, if
I think if they throw that in, that would advis
face it. No, I don't think so anyway, but it is.
It is gorgeous. So if you want to check it out,
And as I say, I think if you're looking for
ideas for your own home, whether you're shopping around, just
go and have a look at seven hundred Hibiscus Coast Highway.
Why would are in Rodney. Estimate of around three point
(39:41):
four to four million. It's a deadline sale, so go
and take a look at that. Anyway, Hey, Debb, be
good to see it. That was even chat about booms,
because you know, we always have market talk about what's
happening now, well, not always, but sometimes we do. And
I suddenly thought, well, hang on, really, it's worth having
a look at the past to try and put it
the future.
Speaker 4 (40:00):
Absolutely, and that's what we do. I'm doing a market
update for our clients next month actually to let them
know where things are sitting and what to expect next.
Speaker 3 (40:09):
That's a difficult one playing that game of prediction, isn't it.
Speaker 4 (40:11):
I don't have a crystal ball, but you know, educating
guesses and of course.
Speaker 3 (40:15):
People want to check Property Prentice out then go to
Property Prentice dot co dot nz.
Speaker 4 (40:21):
Right, that's the one.
Speaker 3 (40:22):
Excellent. Hey, thank you so much. Now we're got to
be That wraps up the One With radio show. If
you've missed any of the hour, go and check out
our podcast on Newstalk SEB dot co dot nz. Up next,
Google Sutherland. It's the time of the year when a
lot of kids are having to make subject choices and
how do you navigate those times? Because you know, in
our school the parents can't actually make the choice. It's
(40:44):
up to the kids, which I quite like. But what
should you advise your kids to do if they don't
know what to do with the rest of their lives.
Speaker 1 (40:50):
For more from the Weekend Collective, listen live to News
Talk zed B weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talk
sedbe News.
Speaker 2 (00:15):
It's Stay Talking Bars.
Speaker 3 (00:32):
Welcome back, this is the Weekend Collective and welcome and
welcome it. Well, welcome back to the Weekend Collective. Before
we get into this next hour, just looking a little
further ahead at five for the Parents Squad, we're going
to be talking about navigating your child's subject choices with
Google Sutherland. But as I said, and now it's time
for the one roof radio show, we would we discuss
(00:53):
all things property, but in one particular one or two
particular things. You can call us on eight hundred and
eighty ten eighty in text on nine two nine two
and today. So last week, you know, look, we've had
a bunch of property booms. But in the week that
has been I had a discussion with a caller about
property prices in general, and one of the things that
came up was a bit of a two and a
(01:14):
fro and about who was responsible and how for when
property prices went crazy. And in short, the caller was
talking about John Keyes policies sending the property market into orbit,
and I mentioned that the cheap money under the Labor
government following the COVID stimulation sent the property prices through
the roof, where people spent up large because you could
(01:36):
get money for next to nothing. And so look, while
it's always good to discuss where the market's today, or
you know, to try and predict, you know, what's happening
with the cash right and all that sort of thing,
I thought it'd be a good discussion to look at
the conditions and see if we can work out what
actually led to property booms in the past, so maybe
we can predict whether another boom's coming and at what
(02:00):
point did real estate get out of reach for the
average buyer. But of course people always tell you that
it's always been tough. So was it political decisions? Was
it cheap money? Was it immigration? That's a political decision,
of course. What do you think we want your cause?
What have been the worst booms if you want to
look at it that way, in terms of putting property
(02:21):
out of reach for first time buyers and others. What
have been the biggest booms, but what has driven it?
What have been the causes of those and who was
to blame? What was to blame? We want your calls
on eight hundred and eighty ten to eighty and you
can text on nine two nine two, of course, and
to discuss that we are are joined by Property Apprentice
investment coach Debbie Roberts is with us today. Debbie, how
(02:42):
are you going.
Speaker 4 (02:43):
I'm doing great, Thanks for having me.
Speaker 3 (02:45):
You're just getting out of a bit of a lurgy,
as you confessed earlier of it. It's there's a few
bugs going around, aren't there.
Speaker 4 (02:52):
Yeah, and this year's flew I think was nasty, nasty
just about everyone I've spoken to you so that they've
had it and or still recovering, so yet not brutal.
Speaker 3 (03:01):
It's good to see it.
Speaker 5 (03:02):
Now.
Speaker 3 (03:05):
What was our last property broom? Let's look at the
broom boom? What was the last property boom?
Speaker 4 (03:12):
So the last property boom was just during COVID and
leading up to the peak of the market, so yeah,
and it was an absolute stonker. So yeah, we've I
mean unaffordability. You know, housing has been unaffordable in New
Zealand for decades. It has been getting more and more
unaffordable since about the nineties, so you know, it's not
(03:36):
a new trend. But certainly there were some things that
happened leading up to the peak of this last boom,
which had a major impact on house prices. At the
end of the day, it all boils down to supply
and demand. You know, when when demand exceeds supply, prices
go up, whether that's housing or market rent or anything
(03:56):
like that. So yeah, if we want to stabilize house
prices a bit more, we need more properties.
Speaker 3 (04:02):
Yeah, because I've every going back to the John Key years,
I was thinking to myself, how because it's easy for
people to sort of blame a particular politician or a
particular policy. In fact, did Roger nomics did that contribute
to any sort of property boom? Or was that a
bad time?
Speaker 4 (04:21):
But oh god, I don't remember. I'm way too young. No,
I honestly don't remember. I've looked at some data going back.
If we look at at house prices history of median
values in New Zealand going back to about nineteen ninety two.
The biggest boom that we've had since then was during COVID,
(04:45):
but the one prior to that was just leading up
to the Global Financial Crisis.
Speaker 3 (04:50):
So actually, now put that in context for me, when
was the GFC?
Speaker 4 (04:53):
Oh that was THEFC was the end of two thousand
and seven?
Speaker 3 (04:55):
Oh, that was just before Oh, because then Bill English
came in and apparently he was quite a good Minister
of Finance and helped us through that. And was that
when we had the talk the rock star economy? Following that?
Speaker 4 (05:07):
Yes, absolutely, so yes, so following that we did have
that rock star economy. So it's interesting, you know, following
on from what your previous caller talking about, the two
biggest booms since the nineties have both been under labor
or labor colored listian governments.
Speaker 3 (05:26):
Oh oh, okay, so we're playing that it's all labour's
fault generally, No.
Speaker 4 (05:30):
Because I mean, at the end of the day, I
don't think it really matters who's in power. Like I
don't care who people vote for. It makes no difference
to me as far as I'm concerned. The fundamentals of
property investing stay the same.
Speaker 3 (05:42):
Because there was a time. Maybe it's just because in
my consciousness as an adult, you remember particular errors, But
for me, if I look back in hindsight, there was
a time as well when I think people worked out well.
There was the message from John Key, I think, was
you need to be provisioning for your own retirement because
(06:05):
Souper's not going to do it for you as much
as you need.
Speaker 4 (06:07):
And that still rings true today doesn't And yes it does.
Speaker 3 (06:11):
And then it's like everyone woke up to the idea
of leverage that basically, because of what you can borrow,
you can buy something and the capital gain will be
there for you, which will get way ahead of what
you can do with effectively what your depositors if you
(06:31):
just invest it. And everyone woke up to this idea
of leverage. Then they saw lots of other people making
money and thought, God, I need to do that too,
and it became a bit of a bit of a craze.
We difinitely went through a phase when we went all
of it party about property.
Speaker 4 (06:46):
Do you think absolutely? And look, this happens every boom,
you know, every single property boom. It's you know, we
always sort of joke about how whenever the conversation around
a barbecue over summer is whether or not people should
be investing in property, chances are that's the time to
start getting really nervous about buying property. You know, when
everyone's talking about doing it, it's because the market's booming significantly,
(07:09):
So yeah, time to be careful.
Speaker 3 (07:11):
One of the things that I think also in the
John Key years was I haven't got the figures in
front of me, but I do tend seem to remember
that we did have quite relatively high net migration as well.
So we're bringing a lot of so some people would
centically say, looky, you've got a lot of people in
the country and artificially pushed demand up and we sort
of we boosted our economy on the back of real estate.
Speaker 4 (07:32):
Yeah, our net migration was very strong leading up to
the peak of this last boom, you know, following COVID.
So yeah, so migration was ridiculously high. It was almost
twice the long term average. Long term average is about
thirty thousand people a year net migration, so you know,
(07:53):
people coming in versus people leaving.
Speaker 3 (07:55):
We're over one hundred thousand one stage, won't we.
Speaker 4 (07:58):
The top figure I remember off the top of my
head was into the nineties.
Speaker 3 (08:01):
Yeah, net migration, that's net migration.
Speaker 4 (08:04):
Yeah, it was massive, So you know that that that
caused a bit of a shortage and property in a
number of different areas, and then developers picked up their
game and started building more, which we needed. And yeah,
so like I think, I think it's a bit of
a moment in time where we're at at the moment,
you know, some people are talking about an oversupply of property,
(08:26):
but you know, we're starting to see sales picking up now.
Net migration at the moment is only about half of
the long term average, so it's not going to take
much before that amount of supply in the market gets
soaked up pretty quickly.
Speaker 3 (08:41):
With the last sort of boom, which of course did
sort of go. I don't want to use the word
bust either, but certainly there's been a turnaround since since
the last boom where I would have thought that the major,
the big thing was money was just so cheap, and
then you know, they saw prices going and people thought,
I've just got to get in there now. Yeah, and no,
and we've had such a prosperous time and real estate
(09:03):
it was almost like people couldn't imagine the bad side
of it.
Speaker 4 (09:07):
Absolutely, And in my opinion, there were three key things
that went wrong leading up to that peak of the boom,
and I think all three of them were pretty unavoidable.
So I can get quite opinionated on this if you want.
Speaker 3 (09:21):
Well, we're not here to have you sit on the fence, Okay, excellently.
Speaker 4 (09:24):
Let me get correct.
Speaker 3 (09:25):
Okay, let's give us some things. By the way, eight
hundred eighty ten eighty, what do you reckon was responsible
for the boom? There is a broader question, is our
boom's a good thing? Because if you're on the receiving
end of of a profit on the back of an
investment and a boom, you'd say booms are great. But
if you are a first home buyer who's maybe not
(09:46):
managed to save up enough, a boom, maybe he's not
such great news for you. So would you recognize when
a boom was coming, oh, eight hundred eighty ten eighty,
and as a boom a good thing? Or are we
better to have sustained growth at a certain rate, which
we're sort of sitting on the fence a bit. Anyway,
over to you now, well you've shut your laptop.
Speaker 4 (10:06):
Wait, hold your phone.
Speaker 3 (10:12):
Okay, the three things you were talking about?
Speaker 4 (10:14):
Yeah, so the three things. So, first of all, we've
had about a seventeen percent decrease since the peak of
the boom. But I think it's important to remember that
we had over sixteen percent increase in the two months
leading up to the peak of the boom.
Speaker 3 (10:30):
So when we looked two months in two months, two months.
Speaker 4 (10:33):
And that's based on the median values. So the three
key things that happened, in my opinion, which caused this
massive spike in house prices, which sureer's eggs resulted in
a massive correction. First thing that happened the government at
the time announced that they were implementing changes to the
Triple CFA, that's the Credit Contracts and Consumer Finance Act.
(10:54):
And you might remember that was where we started seeing
headlines because banks were caught in that net. You know,
it was designed to protect low income people from low sharks,
but banks were caught in that and you might remember
hearing the headlines about first home buyers being turned down
for a home for a mortgage because they brought too
(11:15):
many cappuccinos or they ate too much.
Speaker 3 (11:17):
Case avocado and toyster.
Speaker 4 (11:20):
Absolutely yeah. So it banks were literally going through your
bank statements lined by line and seeing what your spending was.
So that was the first thing. Banks tightened up their
lending criteria overnight. It has relaxed since then because of
amendments to the Triple CFA. But this all happened just
a few months before the peak of the boom. The
(11:40):
second thing that happened was, in my opinion, the Reserve
Bank took way too long to reimpose the deposit restrictions
that they lifted during COVID, So you know, when the
property market started absolutely booming, I think the Reserve Bank
should have reimposed deposit restrictions much sooner to take some
of that heat out of the market. And the third
(12:02):
thing that happened was that the Reserve Bank, in my opinion,
took way too long to start fighting inflation. So when
inflation screamed upwards, they took too long to start lifting
the ocr to fight inflation. So it all happened, created
a perfect storm, and yeah, buyers were panicking.
Speaker 3 (12:24):
Actually, and tied into that, if my memory serves me correctly,
is the fact that the government of the day had
changed the Reserve Bank's remit not just to controlling inflation
but also to controlling unemployment, wasn't it. Which are two
conflicting things which might have been meant that there was
a more of a handbreak on the Reserve bank reserve
(12:45):
reversing what might have been a mistake. What was a mistake?
Speaker 4 (12:49):
Yeah, I mean, and you know, to be fair, I'm
talking with the benefit of hindsight.
Speaker 3 (12:55):
Look, let's enjoy hindsight judging as it's literally the whole
point of this hour is using our hindsight.
Speaker 4 (13:01):
To see see how things could have been done better.
So yeah, in that really short time frame, anyone who
had a pre approval for lending was literally told, if
you don't find something to buy before your pre approval expires,
you're going to need a bigger deposit because the Reserve
Bank had reimposed those restrictions. The mortgage is going to
(13:21):
cost you more because interest rates were rising. And what
was the third thing? Oh, you're so you're going to
need a bigger deposit and your mortgage is going to
cost you more, and you might not be able to
get the same amount of lending as you had for
your pre approval because the banks had tightened up their
lending criteria.
Speaker 3 (13:38):
Hey, just quickly, what was it Wellington that had the
biggest rise? Because Auckland certainly went I mean in terms
of percentage of properties, it was more about just that
literally the hundreds of thousands of dollars more that houses
in certain areas cross. But I seem to remember that
Wellington really went bonkers, didn't it.
Speaker 4 (13:54):
Wellington did go bonkers, and part of that was because
of the large number of employees working at the government.
Auckland absolutely had a massive boom, and I think part
of the reason for that is because when we get
migrants coming into New Zealand, they tend to settle in
Auckland first, so you know, we had huge demand on
(14:15):
rental properties. And then as they you know, as they
got to the point where they were able to buy
their first time or in New Zealand, that put extra
demand on pricing there too.
Speaker 3 (14:25):
Right, we want your cause on this. What do you
think was have been the reasons that we've seen a
property boom? Would you actually be able to predict what's
going to happen based on what we're going to reflect
on now, but also as a property boom in your eyes,
a bad thing or just I don't know, something that's
part and parcel and we shouldn't worry about it too much.
(14:45):
I eight hundred eighty ten eighty text nine two nine two.
It's twenty one and a half past four. That can
I take news talk said be This is one rufradio show.
My guest is Debi Roberts from Property Apprentice. We're looking
at past booms, what caused them? And could you eight
hundred eighty ten eighty.
Speaker 6 (15:02):
John, Hello, yes, good afternoon, the whole you can hear me.
There's three items I see that was the problem even
if we look at the last one, and that was
that the ad minister or mission the governor let the
interest rate for and inever put the bridge on it.
(15:25):
The second items was the government itself. One they should
have said, look, yes you could come into New Zealand,
but this is where your vehicle live, and would say
drawn a line with the new plomas and that the
assouse of that, not norse of that. And the third
item is you know, the government also didn't look further
(15:48):
enough the pain that was going to cost people, because
I've dealt with people and they bought you know, houses
a million bucks eight hundred sous at two percent, and
they could do it quite easy. But now no, And
of course when the how process go up, you can
guarantee that your materials go up the two hour morning.
(16:11):
And now for it to get back up, I don't
think so, because I see people have now starting to
realize well, yes, yes it might comes down. But what
happened because mister Trump is on the steering wheel, and
it's going to come and I might go up again.
And I think that I don't can't see your property
boom at ressent moment because people are too scared, especially
(16:33):
tends the terrace from America that start to hit us. Yeah,
and you know, and everybody crying, ah point nine percent. Hang,
I already at one point nine before get a grip
on the situation. But everything got to adjust. But I
can't see a property boom happening for another eight years.
Speaker 3 (16:50):
Eight years, that's that's a specific number, actually, John, how
do you pick eight years just out of curiosity?
Speaker 6 (16:56):
Well, before it do we get rid of mister Trump
and a all this three Well, that's.
Speaker 3 (17:00):
Three years you're going to get You're going to get
the hate mail on the TIC. But I'll keep quiet
on that one, John, that's three years.
Speaker 6 (17:08):
I don't worry about it. I'm not worried about it. Teller.
The other thing is what you've got to remember is
money is now tight because and this is what creates
it too. There's not enough jobs and firms are still
building over and therefore people are now a lot more gage.
And I don't think before you see new businesses arrive
(17:29):
again I think you look at about five, six, maybe
seven years before you see any movement. I know to
go the strong heart, but personally I can't see it,
and I can't see a boom for ages.
Speaker 3 (17:44):
To me, your biggest point is that people have lost
trust that their money might be as safe as they
might have fourteen years ago in property.
Speaker 6 (17:52):
Yes, you're right, you're right. Once the pototome says, people
sticking in property, but still the old value still stands.
You never lose money on land, but you won't lose
money on property.
Speaker 3 (18:04):
Okay, okay, I'm going to keep you on the line
while my debut digs into that one. I don't I
mean property is land really unless he's talking about apartments
versus freehold?
Speaker 4 (18:14):
Well, yeah, I mean he's you've got an a. You've
absolutely got a point. You know, land is the thing
that increases in values because the dwellings that sit on
those lands tend to depreciate over time. You know, they
lose their value the older they get. So, yeah, you're
absolutely right. Land is what where the value sits?
Speaker 3 (18:32):
How much do you think? I mean? I think John's
point about temperament, it's is there a certain level at
which trust in the property market is the no brainer.
Got got a real head of steam. It wasn't just
a panic, it was sort of there was a mixture
of people think I've just got to just got to
get on, plus you know, the motive of leverage and
(18:53):
all that. But underpinning it all was a fairly strong
level of trust that it was a no brainer. Do
you think.
Speaker 4 (19:00):
Look, and this is this is part of the issue
when it comes to investing in anything. You know, when
when things are increasing rapidly, everyone wants to jump on
the bandwagon, like you know, gold, for example, gold has
increased significantly in value, so there's lots of people that
are now going, oh, we should be investing in gold,
whereas you know, you could also argue that it's increased
(19:22):
significantly and that's not likely to carry on forever. So
you know, it's it's about counter cyclical investing in my opinion.
But when it comes to property booms, there's actually quite
a few different things that line that have to line
up in order to create a boom. So five different things.
Speaker 3 (19:41):
Yeah, okay, and let's go. Let's let's roll. And by
the way, when you disagree with Debbie, jump on the blow.
Eight eighty ten eighty Yeah, we can fight it out, okay.
Speaker 4 (19:51):
So Number one property affordability. So affordability is a combination
of property values and also interest rates. So at the moment,
values are down and interest rates are down, so property affordability.
It's still not affordable by a long stretch. Because to
be affordable, like if we look internationally, they reckon three
(20:14):
times your income is what is needed for help to
be affordable. Yeah, and I don't think it's ever been
like that in New Zealand. We'll certainly not a few decades.
Speaker 7 (20:23):
Now.
Speaker 4 (20:23):
It's currently sitting I've got this written down somewhere. It
is currently sitting at about six and a half times income.
Speaker 3 (20:31):
So affordable that is, actually it's worth it's worth mentioning
it and reminding ourselves of that because a lot of that,
Oh probably prices are good, you know, first home buyers
are getting in and there's almost this narrative that suggests
it's much easier whereas it's less difficult, but it's still
bloody expensive to buy house.
Speaker 4 (20:52):
So six and a half times your average income is
considered to be seriously unaffordable. So you know, now it
takes about ten years to save a first home deposit, Yeah,
which is still a lot time, you know, but if
you start when you're in your twenties, you could buy
home in your early thirties, so it's not too late.
The soon as you start, the easier it is. It
(21:14):
was ten times income in late twenty twenty one, so
you know, we're a lot better now than we were.
So housing affordability is definitely improving. So that's the values
and interest rates. Unemployment levels, now, this is another key
driver of property booms. So when unemployment is high, there's
(21:34):
less people who can buy houses and less certainty in
the market. So yeah, so I think that's one of
the key ones to watch because at the moment unemployment
levels are high. The next one is net migration. We've
already talked a little bit about that, so it's way
down at the moment. So when that turns and when
unemployment levels start getting better, that's two things. Building construction,
(22:00):
so you know, we need we need dwellings to be built.
One of the things that we've seen, you know, leading
up to the peak of the boom, we saw massive
increases in construction and that has caused a bit of
an oversupply in some areas. Of certain types of property.
Speaker 3 (22:15):
So somebody sent me a link saying that there's some
parts of New Zealand where the supply is outstripping the
growth in the region. Yeah, so literally the more houses
been created for few and few people who are arriving. Yeah.
Speaker 4 (22:27):
Yeah, So, like there's so many things that you need
to look at, and vacancy rates as well. Those are
all the key things that cause property booms. So yeah,
my opinion is that the two key things to watch
is net migration and unemployment levels. Now, we just had
a bit of a shocker when it came to the GDP. Yeah,
(22:47):
so you know, that's showing the economy contracted it.
Speaker 3 (22:51):
To be honest, I wasn't particularly surprised by that.
Speaker 4 (22:54):
It was a lot worse than most bank economists and
other economists were expecting, and I think that was the shocker.
You know, even the Reserve Bank was expecting one point
three percent reduction. Most of the bank economists were saying
point five, but it was it was horrific at some
point nine drop.
Speaker 3 (23:11):
So yeah, let's take some more calls. What do you
reckon eight hundred eighty, ten eighty and which are those?
And actually, as Debbi's mentioned, those five things there, Which
of those would you be looking for in particular? Which
might think all things might be turning around soon, Not
that they look like they're turning around anytime soon, but yeah,
your reckons. Right, let's go to Sue. Thanks for holding.
Speaker 7 (23:32):
Oh oh good, Yeah, I wanted to fill in a
gift going back. Oh when Roger Douglas was in three
strates were up to twenty three percent. Yeah, yeah, they were.
And I think the the cycles started after the sheer
(23:59):
market question eighty seven. That's when I saw the first one,
because people don't want to put their money into shares
and that anymore.
Speaker 3 (24:10):
Actually, that is as Deb's just said, So I think
you've nailed the point we've forgotten to mention. Absolutely, people
fell out of love with shares because they've been bitten.
Speaker 4 (24:19):
Yeah, and at the moment it's the opposite, right. Share
market is increasing quite nicely, so people in property markets
not so.
Speaker 8 (24:27):
Yeah.
Speaker 7 (24:28):
Yeah, and that was a very of course I was
doing the house in back then, but that was a
very interesting time. But I think the cycles go every
ten years basically, and in recent years it was really
(24:52):
you know, yeah, the cheap money was a bit of it,
but really trying to build an economy on the property
market and tourism. Those two things actually saw speculators coming
here buying up large parcels of land and land banking
(25:15):
and forcing up values. They did it in the suburbs
as well. We had lists and lists of these places.
Speaker 9 (25:23):
Ah.
Speaker 7 (25:24):
And also we had hundreds I forgot how many, but
we had hundreds and photos of all the ghost houses
in Auckland. I think it was forty four thousand there was.
They were saying at that time, oh, well there's a
property shortage. But actually no one except for me mentioned
(25:46):
the ghost houses. And I had proof of it as well.
You see, but that's that'd.
Speaker 3 (25:51):
Be a lot of that'll be a lot of photos
so to have done.
Speaker 4 (25:58):
Yeah, we had We had a go a ghost house
across across the road from one place that we were
in at the time, and my husband kept trying to
buy it. So he was sticking letters in the letter
box every week, so you know, we're interested in buying
your property because it was empty and the grass was
overgrown the gardens where weedy airs. So he gets sticking
(26:19):
letters on the letter box saying, hey, I'm interested in
buying buying your house. Let me know, if you're interested
in selling and every week you dropped something in there
until they removed the letter box.
Speaker 5 (26:28):
Oh well, at least that somebody, somebody'd actually, I mean,
if you bought, I mean, if you bought at an
expensive time, then you don't really want your house to
be empty right now because you're just losing money.
Speaker 3 (26:41):
So I actually I don't know how many but how
has this said been? I mean, the AI tells me,
gives me a range of reasons that that places are empty.
One would be deliberately empty as you're referring to. Then
there's between tenancies and renovation and repairs, and there's holiday
homes and stuff.
Speaker 7 (27:00):
Yeah, did you know one of the biggest drivers of
all and I think it's to do with people, it's
greed because I can remember, you know, to Westomachy Road,
Yugobar lovely property or a biog bit a land for
ten grand up there.
Speaker 3 (27:19):
Well, well, yeah, what year are we talking nineteen sixty
three or something? Okay, just really, I.
Speaker 4 (27:26):
Mean, you're you're absolutely right though. Fear and greed has
a huge amount to huge cause of property market drives
and also the shear market. It's fear and greed that
drive markets.
Speaker 3 (27:39):
I mean, I guess one person's greed is another person's
ambition if you I mean it's it's sort of one
of those pejorative terms where okay, if somebody's I don't
know when is ambition greed? That's the thing because if
you are, say someone with just your own house, and
you want to buy an investment property because you want
to be able to invest in your children's future and
(28:00):
give them something to go with, someone might say you're
just being greedy. You might just say, well, I'm just
being ambitious. Family. It's it's a problematic word, isn't it, Sue. No, Really,
someone trying to get a house so they can get
ahead for their kids, an next an investment property.
Speaker 7 (28:16):
Well I wouldn't say that that's screed, but I just
wanted to say tu to Debby. Now I can remember
before those attitudes were there, when there was a family
benefit and people could capitalize them by their first home,
when they tuned puckeringa from Ortsons and or farms and
(28:38):
that into you know, these house lovely houses. And it
was actually rots A Douglas that cut that out and
brought in the textable family support.
Speaker 3 (28:51):
You see, Yeah, we're getting a little bit off the
topic there, but I think one of Sue's points at
the start was it's the falling out of love with
one area where we thought we had our prosperity nailed,
and the falling in love with another.
Speaker 4 (29:05):
And it's interesting because when we look at what drives
the property market and what just influences the property market,
that's one of the influencers is whether there's other investment alternatives.
So it influences the property market, but it doesn't actually
drive it through to the next day.
Speaker 3 (29:22):
Which is why I wonder, and we've got to take
a break. We'll come back with our callers in a second.
I don't know if we're ever going to see quite
those conditions of member when everyone was in love with
Brilly shares and all that sort of thing and everything
when we went through the roof and then suddenly, you know,
we had the stock market crash and a lot of
people never trusted shares again, and so they went towards
it's property, whereas it feels that when it comes to
(29:43):
share markets and that sort of investing, there's a lot
more analysis and research available and advisors out there who
can help navigate your journey there where we might not
see the same crazy like, oh here, this is the
hot share of the day. Pile in, pile out. Yeah.
Speaker 4 (29:59):
And I think, you know, some of the things that
happened leading up to the peak of the last boom,
I think that caused a lot of blood in the water.
You know, there were an awful lot of people that
were promoting new builds as investments because they had the
interested actibility where existing properties didn't. So that drove mum
(30:19):
and dad investors into one sector of the property market,
which increased demand there, which push prices up.
Speaker 3 (30:25):
By the way, it's worth remembering that MB study in
twenty twenty showed that seventy seven percent of New Zealand
property investors only own one property. Yeah, there remaining twenty
three percent other ones. Maybe they're the ones that SO
would say they agreed.
Speaker 4 (30:37):
Yeah. And I also think it's important to point out
that eighty five percent of all rental properties in New
Zealand are provided by private landlords and thirty three percent
of the population live in rentals.
Speaker 3 (30:49):
So got a call on the morning, would say there's
lies and damn lies, and then their statistics, yep are
But you know, I pushed back against the little It
would be fair to say it's nineteen and a half
minutes to fire back and attackest news talks that'd be
with Tim Beverage and Deba Roberts from Property Apprentice is
with us talking about booms past and can we predict
(31:10):
the future. I don't know your calls, Douglas Hello, oh.
Speaker 8 (31:14):
Hello, Yes, I just wanted to give an example from
myself of property. I've never actually lost money through property.
I've made it enormous amounts of money and gone through
some hard times because of basically I've gone where I
could go, and partly it was my job. I was
a teacher, so I could teach in most places and
(31:36):
that helped. But I do think that a lot of
people sort of like, I mean, if you're going to
waste money on cars, you buy a Ferrari and you
lose all your money whereas you know, and or you
go to some fancy part of Auckland or fencing part
of Wellington or somewhere. I mean when we first got married,
I've sent to Wallstone. When we got married, we bought
(31:57):
a little place in Plemison.
Speaker 3 (32:00):
Yeah.
Speaker 8 (32:00):
Seventeen thousand and the mid seventies. Seventeen ratings and when
we when we started having kids and stuff and getting
a family, we moved to Wadstown and had to buy
a place for thirty grand, but we sold the place
and I mean we just doubled our value on the
place in Plymuton. So we didn't you know, didn't have
a didn't have a huge boards. We had a big book,
(32:22):
but not a huge boogage. And then after after getting
divorced from my wife and she acted on the bank.
I think banks are very conservative and usually wrong with
their house prices, partly because they don't want to lend
your money.
Speaker 3 (32:37):
Are you saying that your secret to your success was
having modest ambitions every time you bought.
Speaker 8 (32:43):
Oh well, I do think that helps. But also I
mean name the banks or anything, because it's it's all
of them basically. But bankers tend to be conservative because
they don't want to lend your money, so they're not
going to say all your house is worth so much
simply for business reasons. And then of course they caught
out when when when you when you actually want to
(33:03):
sell the place because they thought my house was worth
a hundred pounds.
Speaker 5 (33:07):
So what do you think?
Speaker 8 (33:07):
What do you think?
Speaker 3 (33:09):
What do you thinks driving the bones, then, Douglas, what's
your take on it?
Speaker 8 (33:12):
I think it's stupidity, I really do. I just think
it's stupidity. I mean, this place is meantly with meantly
with one hundred thousands, and I had people who were
offering me, although they were terribly nice people, and I
didn't buy from them, but they were offering me three
hundred and fifty thousand the house in wads Town.
Speaker 3 (33:29):
So have we been cured of asked stupidity by recent events?
Speaker 7 (33:34):
Oh?
Speaker 8 (33:34):
I think it's a human I think it's a human thing.
I'm not going to say stupid. I don't say the
bad people or silly people. It's just a human thing.
And you don't you don't necessarily get all the correct
information from the people you should. You bring up your
bank manager or whoever it is at the bank, and
you expect them to tell you stuff and for it
(33:54):
to be gold plate, and it should be really, but
it's just not. I mean, I sold my place in
wade Town for three times. That's what the bea said
it was there.
Speaker 3 (34:06):
Well that's good, that's a good win, mate. We got
lots of calls to get through. I appreciate that I
mean emotion. Really, let's not say stupidity, but that's what
a crazy is all about. When everyone's phomo, yeah, and I.
Speaker 4 (34:17):
Think, you know what something not calling people stupid, but
just people don't know what they don't know. So, you know,
when interest rates were around two and a half and
two point nine to nine percent, people didn't know that
that wasn't normal, and so when they saw how much
their mortgage was going to cost them, you know during COVID,
they were like, well, this is pretty cheap, this is
(34:38):
we can do this. But they didn't realize that the
long term average interest rate is about six point three percent,
you know, so when interest rates started to climb, a
lot of people really got into trouble.
Speaker 3 (34:50):
And a lot of people didn't get bitten by breaking
that rule because they made a lot of money and
this sold out, et cetera. It's the people who come
on along later who just think, okay, four and a
half percent interests great, let's rock Yeah.
Speaker 4 (35:02):
Absolutely, And then you know people that purchased right at
the peak of the boom, especially the ones that bought
off the plans, you know, new builds off the plans
when properly values dropped a lot of the time they
couldn't get lending to settle that deal because they needed
a registered valuation in a lot of cases which didn't
stack up, and interest rates were higher. So, yeah, it
was it was blood in the water, right.
Speaker 3 (35:25):
Let's go to David High.
Speaker 9 (35:27):
Yeah, High there. I was listening to talk about radio
while back, and I rang up and he'd been a surveyor.
He said he was working through the seventies and eighties
and somebody had developer would buy a piece of farmland,
decided to turn it into residential and from the day
(35:50):
he bought it and came in and said, here's the
plot I've signed up for that subdivided through all the
roads and sections and that type of thing, and get
it through the council. It took them six months, said
those sections are on the market six months later.
Speaker 3 (36:07):
Now, yeah, sorry, I think we losed over there. Sorry, sorry,
I lost you there second. That was my fault.
Speaker 9 (36:19):
Oh okay, Anyway, I used to be able to buy
a section in those days. You said the price of
a section was the annual income of a tradesman, an
electrician or a builder or whatever. There was the price
of the section. It's the land that's gone up rather
than the building costs. While both have got up, the
majority of it's been in the land and that's because
(36:42):
of all the complicated resource management that carry on either
on the north Shore and awkward and a big Peterkawa
fell down on a residential apartment block land. It took
three years and it's only just been finalized for the
(37:05):
permission to remove that tree.
Speaker 3 (37:07):
Yeah, that's crazy, isn't it. I mean, that's I think
that's some of the difficulty around. It just makes everything
more expensive, doesn't it. Debbie.
Speaker 4 (37:13):
Yep.
Speaker 3 (37:14):
Anyway, Hey, look we've got to take a quick moment.
We'll be back with the one roof properly of the
week in just a moment. It's ten to five, the.
Speaker 1 (37:21):
One roof property of the week on the Weekend Collective.
Speaker 3 (37:25):
Yes, the one roof property of the week, I think
the Debbie, have you seen the one roof probably the
week this week?
Speaker 4 (37:30):
I had and it is.
Speaker 3 (37:32):
Look, look, most of our property of the week's are
pretty spectacular. This is waterfront lifestyle on the Hibiscus Coast Highway.
It's apparently designed with family living in mind, perhaps not
a family budget. The home is expansive, versatile, It offers
multiple living areas, four bedrooms, a study, fully self contained
area containing a bathroom in kitchenette. It is, it's five bedrooms,
(37:56):
three bathrooms. It sounds all right, modest, two car garage,
garage with a house of three hundred and thirty nine
square meters.
Speaker 4 (38:06):
Views to die for.
Speaker 3 (38:08):
I think that's the reason for the estimate of three
and a half million, basically, isn't it. And the I
mean the Hibiscus Coast, that's the thing. Look at the
beaches and the views absolutely absolutely stunning.
Speaker 4 (38:20):
Isn't it a big chunk of land on that too.
Speaker 3 (38:23):
Yeah, so with the spar pool, and they've staged it
really well as well, four well fenced grazing paddocks, two
sets of yards, and as well as enclaves of native bush. Actually,
I guess three and a half million. If you won
the powerball, you'd be thinking it makes a nice little
spot for what do you reckon? Would you fancy a
(38:45):
property like that? Debbie?
Speaker 4 (38:48):
Not personally, but you know, I like it's absolutely got appeal.
The views. The views are incredible, you know, And I
mean if there's anything like coastal erosion or cliff you know,
because it looks like it's on a bit of a cliff,
so there's plenty of room to move the house if
you needed to.
Speaker 3 (39:03):
It's actually it does look like it's sort of more
more gently sloping than at first impression.
Speaker 5 (39:11):
Doesn't.
Speaker 3 (39:11):
It's not quite a drop off that would.
Speaker 4 (39:13):
Be, and it's not right on the edge. I'm exaggerating.
It's beautiful.
Speaker 3 (39:17):
I think if there's a boat in the driveway, if
I think if they throw that in, that would advis
face it. No, I don't think so anyway, but it is.
It is gorgeous. So if you want to check it out,
And as I say, I think if you're looking for
ideas for your own home, whether you're shopping around, just
go and have a look at seven hundred Hibiscus Coast Highway.
Why would are in Rodney. Estimate of around three point
(39:41):
four to four million. It's a deadline sale, so go
and take a look at that. Anyway, Hey, Debb, be
good to see it. That was even chat about booms,
because you know, we always have market talk about what's
happening now, well, not always, but sometimes we do. And
I suddenly thought, well, hang on, really, it's worth having
a look at the past to try and put it
the future.
Speaker 4 (40:00):
Absolutely, and that's what we do. I'm doing a market
update for our clients next month actually to let them
know where things are sitting and what to expect next.
Speaker 3 (40:09):
That's a difficult one playing that game of prediction, isn't it.
Speaker 4 (40:11):
I don't have a crystal ball, but you know, educating
guesses and of course.
Speaker 3 (40:15):
People want to check Property Prentice out then go to
Property Prentice dot co dot nz.
Speaker 4 (40:21):
Right, that's the one.
Speaker 3 (40:22):
Excellent. Hey, thank you so much. Now we're got to
be That wraps up the One With radio show. If
you've missed any of the hour, go and check out
our podcast on Newstalk SEB dot co dot nz. Up next,
Google Sutherland. It's the time of the year when a
lot of kids are having to make subject choices and
how do you navigate those times? Because you know, in
our school the parents can't actually make the choice. It's
(40:44):
up to the kids, which I quite like. But what
should you advise your kids to do if they don't
know what to do with the rest of their lives.
Speaker 1 (40:50):
For more from the Weekend Collective, listen live to News
Talk zed B weekends from three pm, or follow the
podcast on iHeartRadio.
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