March 28, 2026 • 41 mins
For a long time, the kiwi dream has been to do whatever it takes to get onto the property ladder and work your way up from there, but some investors are moving away from that advice - instead suggesting that it might be a better idea to rent and put your money elsewhere.
It's not just the cost of the property and the mortgage repayments. You're paying to maintain the property in a way you wouldn't be if it were a rental, you're covering rates, insurance, and all the other little costs that add up pretty quickly.
That's money that some investors argue could be spent on investments, or on a rental of your own that would at least bring some return.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk
sedb Dare you.
Speaker 2 (00:16):
New, yes? Welcome then, well, welcome back to the Weekend
(00:42):
Collective onton Beverage and we want your call. This is
the one roof radio show eight hundred and eighty ten
eighty and text ninety two nine. I'd love you to
join the conversation and what we have to talk kick
it off with today is that for look, for a
long time, most people, I think most people assume that
at some stage in your life you're going to end
up owning your own home. And I mean, I guess
(01:04):
the question is when you do that. But eventually there's
a question about whether you're going to own your own home,
do whatever it takes to get onto the property ladder
and then go from there. But there has been there's
always a suggestion to be honest, but there have been
a few increasing suggestions that might be moving away from
that advice, suggesting that it may be it is a
better idea to reput your money elsewhere. And I could
(01:28):
probably say that we've seen a shift in the discussions
around investment and a lot more enthusiasm than there used
to be for the shear market and other markets. But
of course, you know, when it comes to owning a property,
it's not just the cost of the property, but you've
got the mortgage repayments, you're paying to maintain the property.
I don't know, maybe you need a new roof not
long after you bought it. Speaking for a friend, I e.
Speaker 3 (01:49):
Me ah.
Speaker 2 (01:50):
And you know if you if it was a rental,
you know, maybe you wouldn't have to worry about that.
You've got to cover the rates, insurance. I mean, if
you're Wellington, you've got these water bills which are mounting up.
Other costs that can add up pretty quickly, and so
that is the money that some investors argue might be
better spent on investments and just rent somewhere, rent somewhere nice.
So have you gone through that equation yourself? I think,
(02:13):
to be honest, everyone goes through that equation at some stage.
But it still ends up being about just delaying or
advancing the question whether you when you buy. But there
are some people who say, look, just rent, just rent
and do something else with your money. Is it still
worth your money to buy a place on your own
And what are the considerations? Because I say, maybe it's
not just about about the money. It's a home, so yeah,
(02:36):
eight hundred eighty ten eighty would you get on the
property ladder at the same time, if you are having
your time right now, what would you be doing renting
or buying eight hundred eighty ten eighty anyway, sitting patiently there,
he's champing at the bit there as he always is,
to discuss that. He's resident economist at OPA's Partners and
his name is Ed McKnight.
Speaker 4 (02:57):
Great to be here to him.
Speaker 2 (02:58):
Hey, we were just talking before and despite you know,
the panel always has heavy topics, you've had a great
star to your day today.
Speaker 4 (03:06):
Well, I mean, what's lots of love about being up
here in Auckland. You know, it's a beautiful part of
the country. Anybody that living south of the bomb Bays
might might disagree with that, but.
Speaker 2 (03:15):
Or north of north of whatever it.
Speaker 4 (03:18):
Is, the Auckland, you can't what they're called. And I'm
such an Awkland neither can I.
Speaker 2 (03:27):
But actually, you know, because we've been through this terrible
period of weather and my thoughts and feeling going out
to people in Northland and things, but gosh, I was
just so relieved when the sky is cleared yesterday and
your blue sky and you know what, you know, life's
pretty good sometimes on a beautiful fine day, well sometimes
at Auckland.
Speaker 4 (03:43):
And that's where we get to sit here and ponder
whether you should be renting or whether you should be
out of your own home.
Speaker 2 (03:48):
Well, you you've been through. I mean, everyone goes through
that journey. Some people may sometimes wonder whether the choice
is driven by necessity, given house affordability and all that
sort of stuff. But you went through that whole thing yourself,
did you do you think you were going to rent
for longer than you did until you well re order.
Speaker 4 (04:07):
I only bought my own home after purchasing four investment
properties first, right, But I only bought my own home
because because I got married. Right, that was back in
December twenty twenty four. I bought that first home. And again,
the reason I did it was because I was engaged
at the time and owning a marital home to live
(04:29):
and was very important for Angela, my wife and her family.
And so we went ahead and we did it. But
I probably would have rented for a bit longer if
I had my choice, because owning my own home wasn't
that important to me. And I do see that this
is something that especially property people or investment people sometimes
talk about, which is renting first, either purchasing investment properties
(04:51):
or investing in things like key Wei Saver or the
share market before you do eventually pull that trigger. And
I suppose I saw Luke Kemey's talk about this on
the Prosperity Project Really Good endz Meat podcast the other day, saying, hey, look,
he lives in a really expensive home worth north of
two million dollars. And what he figured out is actually,
if you rent a really really expensive house, the yield
(05:13):
on it is quite low. Like the yield might only
be two or three percent in terms of what does
it cost you to live in that as a percentage
of the property's value, all right, Right, so it might
cost him twelve hundred bucks a week to live in
a two million dollar property. And so he thinks, well,
maybe I just don't buy this really expensive property and
I put my money into shares and other things. Now
(05:36):
that does work when we're talking about really really expensive houses.
The maths doesn't work quite as well if we're talking
about just a normal, average house like most people are
going to be living in.
Speaker 2 (05:47):
Is the is the yield on expensive houses a bit lousy.
Speaker 4 (05:51):
Oh one hundred percent right?
Speaker 2 (05:52):
Really? Yeah, yeah, it's not on PC's two or three.
That's really good.
Speaker 4 (05:59):
So so if you look at it at like a
really expensive house, some guys, some people might have been
following the Duval story.
Speaker 2 (06:06):
Right.
Speaker 4 (06:06):
We had Kenyan and Charlotte Clark who were running Duval.
They famously rented the properties that they lived in, which
is not actually as dumb as you might think first
on first hearing, because if you're living in a ten
million dollar house. I looked at some of the rental
properties they are living in. The rental yield on that
might have been one to two percent, right, So they
would be absolutely terrible, shocking investment properties to own, But
(06:28):
it'd be some rich person who wasn't living there so
wanted to rent it out for a while. So when
we're talking about those really expensive houses, the yield might
be two percent, whereas for a normal rental it might
be say four and a half to five percent. So
that's where the maths can really make sense. Especially some
one property developer I know actually lives in a ten
million dollar house over in Takapuna and he's figured out well,
(06:52):
rather than buying a big mansion like he's currently living in.
Maybe you should just take his deposit, which might be
quite a lot of money, and put that into developing
properties as opposed to putting it into one very big
expensive house. Again, that's where the maths makes more sense
at the big end of town in my mind, compared
to the average person listening to this show.
Speaker 2 (07:13):
Right, Actually, yeah, so, because it always feels that, I mean, remember,
there was a time when rent's got really expensive, and
in fact, I think that that equation has shifted where
people are like now, you know, the markets shifted more
towards in favor of the first time buy, and so
there are more people getting into their first hands because
I mean, as you say, you got a home because
(07:34):
you're you know.
Speaker 4 (07:36):
Because my wife wanted it.
Speaker 2 (07:37):
Your wife wanted a home in fact, you know what
I mean, if we were gonna, if we had to
do this hour in ten minutes, I'd say, well, hands
up those we've got a partner, and what chance is
it that the two of you don't want to have
a home together that you own. And I mean that's
a big emotional commitment and having your own roof over
(07:57):
your head, which is yours to do with as you want.
It's a big deal.
Speaker 4 (08:02):
I think so, And it's really the certainty of it.
I mean, it's so funn Only what I think about
is because that allowed me when we moved in there,
to go buy the couch that I always wanted, right,
or the speakers next to my TV that I always wanted,
you know, and just buy some of those things to
actually make a home. If you're living in a rental property,
and I've lived in a lot of rental properties in
(08:22):
my time, whether the apartments or townhouses or standalone houses,
and they're never they're not they never really feel like
yours because it's not yours, right, And so you don't
end up investing in things to make it more of
a home because you know that if you have to move,
you're gonna have to pack it all up, right. Whereas
if it's your own home and you know you're going
(08:43):
to be there for seven to ten years, you can
make it more homely.
Speaker 2 (08:47):
It's an interesting equation, isn't it. If you Yeah, we
want to know what you think. Have you wrestled with
the question about whether you're just better off renting than owning,
or is that just simply in the early days. The
equation that we all go through when we think, well,
you know, I haven't got a big enough deposit, can't
afford or you know what, my deposits not big enough.
(09:08):
In fact, this is the equation I went through before
we bought, was I thought, you know, my deposit isn't
big enough yet that I can buy something without feeling
I'm hemorrhaging on the interest. And that's so So that
was for me. I guess part of my thinking is
that there was a point where we couldn't afford to
buy until all of a sudden we could. And in
the end, the overarching consideration was wanting to own something
(09:30):
because you want to have kids and you want to
have certainty. We are living and it's your home, so
we're going to have from you. What was the decision
that motivated you as to whether you're going to continue
renting or you're going to actually buy a home. Because
the argument is there that maybe sometimes for some and
maybe it is the Biggert in town as ed saying
(09:50):
that it's better to rent eight hundred and eighty ten
to eighty text nine two nine two. And if you
are renting, I guess on what conditions would that commitment
be something makes it more palatable, like, okay, I'm going
to sign at least for two years certainty as opposed
to month by month or whatever. Sixteen past four. Let's
(10:11):
actually go to the call straight away, shall we ben Hello?
Speaker 5 (10:16):
You get a look. I own my neighbor's rent. The
difference in payments each week is eighty bucks, so I
pay eighty bucks more and that includes mortgage repayments, insurance,
and rates, so it's only eighty bucks difference. And at
(10:37):
the end of the year, my equity and my home's
gone up by about fifteen k and then whatever the
house price went up by. So I think you look
in the long run, your best. You're definitely better off
paying off your own mortgage than someone else's. And you know,
in seventeen years time, my house is going to be
paid off and it's going to be worth double what
(10:58):
I paid for it, and the rent is going to
have nothing, So you're definitely better off.
Speaker 4 (11:04):
Only how long have you owned that property for? Is
it about thirteen years?
Speaker 5 (11:09):
No, I've owned a coach eight.
Speaker 4 (11:12):
Okay, good, so you've paid it down for a while.
This is a really good example of what tends to
happen when a lot of people run the numbers about
renting versus owning, they look at it right at the start.
But Ben's example is actually very good because over time
what happens is as long as interest rates stay the same,
your mortgage payment is designed and calculated to stay exactly
(11:34):
the same for the full twenty five or odd years
that that Ben's mortgage is going to be over Whereas
over time rents increase, right, And so that's where Ben's costs. Yeah,
some of them will go up, like rates and maintenance,
but the big one, the mortgage is basically going to
stay the same while everybody else's rents go up. So
give it another five years, and actually your neighbor Ben
might be paying more than you are, and you're still
(11:56):
paying down some principle. And that's kind of that mechanism
or that people just forget about.
Speaker 2 (12:02):
You See, have you had to spend anything on the
property since you order?
Speaker 5 (12:06):
Yeah, we've done the kitchen, and we're in the process
of going in the bathroom, and I've slept the curve
bains on it. So look, it's definitely an increased in value.
And I think there's a difference between renting and owning
is if I want to paint a wall, or I
want to change something, will sleep a deck on I can?
So I think it is definitely a big dif to
the name, how much did.
Speaker 2 (12:27):
You have to spend on the bathroom and kitchen just
out of curiosity?
Speaker 5 (12:30):
We did it ourselves, and you know, some of it
was stuff we brought online. We got a little bit cheaper,
but I think I think we spent about seven or
eight grand on the kitchen and probably about the same on.
Speaker 2 (12:41):
The bathroom or bargain.
Speaker 4 (12:43):
The other thing to just point out as well is,
you know, let's say painting is a good example though, right,
because sometimes tenants will want to paint different rooms. If
you paint a room in the house that you own,
ben and it increases the value of your property, you
get the benefit of that. If the tenant does that
in a landlord owned property, the landlord gets the benefit.
So that's also any anything you spend on the property
(13:04):
as kind of it can benefit you as if whereas
if you were in a rental property it wouldn't.
Speaker 5 (13:11):
Yeah, and then like the property next door that's changed
teams twice since we've been here, and it's had about
four different tenants in it. So you know, there's beauty
about owning your own home as you know you're there
for as long as you're making the mortgage payments, so
you don't have to worry about that.
Speaker 2 (13:30):
Yeah, no, good stuff. Hey, thanks for you, cool mate.
I appreciate it, man, all right. One hundred and eighty
ten and eighty renting versus buying. The arguments are that
for some maybe it's worth renting for a bit longer.
I mean, I must admit to me, I think it's
always about whether you postpone that decision for a bit.
I don't think there's anyone who ultimately doesn't want to
own their own slice of property. In fact, tell me
(13:52):
I'm wrong. I mean, are there people out there who
are like, Look, my plan is I'm putting all my
disposable income if I that I can muster into investments
and I'm going to be worth a fortune that I
can live where I want, when I want, how I want.
How many of those people are there out there? Actually,
before we go to the break, how many do you
think they're out there?
Speaker 5 (14:10):
Like that?
Speaker 4 (14:12):
Ed, I'm going to say, like two people, you know,
both of them?
Speaker 2 (14:19):
I eight one hundred eighty ten eighty Or is the
question around wentting, renting and owning? Is that really just
a timing question? Because to me, I think ultimately, as
I said, you know, ultimately you're going to want to
own something. But then again maybe not, I don't know.
I eight hundred and eighty ten eighty. Also, by the way,
(14:40):
that does tie into the question. I know people who've
sold up, you know, I know of people should I
so've sold up their house for their latter years of
their life. They've freed up a lot of capitl and decided,
you know what, I'm going to rent for the rest
of my life and and have a good time. I mean,
maybe that's an example. I don't know. I might dig
into the economics of that with Ed and see if
he can dig into that as well. It's twenty one
(15:01):
past four. We'll be back and just detect John as
next three speed lines eight hundred eighty ten eighty News Talks.
They'd be with Tim Beverage. My guest is Ed McKnight.
The renting versus buying equation? What did it look like
for you and what were the reasons? Because it's easy
to say, oh, yes, you know, I'm going to rent
for the rest of my life because I'm going to
make brilliant investments and be worth millions and millions because
I won't have squatted it all on having to maintain
(15:24):
a property and all that sort of stuff. As Ed says,
maybe that's something for the big end of town. But
what was your what were your decisions when it came
to when it was time to rent or buy? John?
Speaker 6 (15:35):
Hello, Yeah, guys, good afternoon. I'm John and I live
in a two bedroom house in christ Church Own and
it's morgage free and I'm contemplating moving to Brisbane to
be closer to my daughter's baby.
Speaker 2 (15:50):
Yep.
Speaker 6 (15:51):
And I don't know whether I should rent always or
whether I should sell it you know.
Speaker 2 (15:57):
Oh, I mean rent it out as I came and.
Speaker 6 (16:01):
Go to Brisbane to rent, you know, in the meantime
sort of thing.
Speaker 2 (16:05):
It's an interesting one because you've got a foot in
the market. So Ed, what are you what's your initial
take on this?
Speaker 4 (16:09):
Well, the first question for you, John would be do
you have a sense of how long you're going to
be in Brisbane for? Is it going to be a year,
is it going to be forever? What are you kind
of thinking.
Speaker 6 (16:20):
I've moved a lot over the years up and down
to Tasman and I'm probably going to move now and
my grave mark will be there sort of thing.
Speaker 4 (16:28):
Yeah, so you go, so you go right, yeah.
Speaker 6 (16:32):
Yeah, yeah, it's the final move after a lot of
mounds from across the Tawsman and I bought this house
from my dad who passed away a couple of years.
It's an over sixties unit. It's no longer over sixties,
but it's Philly new sort of to bedroom.
Speaker 4 (16:47):
Okay, that's cool. And the other question I was going
to ask you, John, is when you go over to
Brisbane to be closer to your daughter, are you going
to live with her or are you going to try
and rent somewhere else or you're going to need to
buy buy your own place there?
Speaker 6 (17:01):
Yeah, look, I was thinking of renting first. Obviously I'll
probably get a job and that shouldn't be easy for
what I'm doing, But look, I think renting first. I
always find tipping my toes in getting settled first for
a bit, you know, and using them. I was seeing
of using the rent here to supplement autos. You know,
(17:24):
I don't know, well too bad.
Speaker 2 (17:26):
I mean, if you were wanting to get a two bedroom.
If you wanted to get a one bedroom in Brisbane
and you've got a two bedroom in christ Church, maybe
maybe you almost might wash its face. I don't know.
Speaker 6 (17:35):
Yeah, that's right. It's a bit of Yeah, I know
probably I thought some y sears that have done that
much might be able to say, hey, no that's the
way to go. But yeah, it's interesting.
Speaker 4 (17:48):
And John, last question for you before before I tell
you what's running through my head? Do you have many
other assets? Is it mainly just just the house you've
got or do you have a bit of money and
shares or a managed fund or savings or something.
Speaker 6 (18:00):
Yeah, I've got savings and I've got gold merchants and stuff. Yeah.
Speaker 2 (18:08):
Is this where you drop an eye? I've got an
extra couple of million in the bank, a bad house.
Speaker 6 (18:14):
Yeah it was previous Q super Australian super that I've
got stashed away, you know what I mean, that sort
of thing. So okay, there's something that I can draw on.
Speaker 3 (18:25):
Sweet.
Speaker 4 (18:25):
So the first thing that I'm thinking John, And of
course I always need to tell you. I'm not telling
you what to do because I can't give you financial advice. Ay,
because I'm not a financial advisor, B because we're talking
on a radio show and I've only asked you three questions.
But here's but here is how i'd go about thinking
about it. The first question you need to be asking
yourself is Okay, this property that you're currently living in,
(18:47):
the over sixties unit, it might be worth about say
three to five hundred thousand dollars. I might have got
that wrong. But what you'd want to ask yourself is
is this the best use of my money since I'm
not going to be living in it anymore and there's
pretty much no hope or you've got no intention of
ever moving back into it, moving into it because you're
off to Brisbane and that's where you think you're going
(19:08):
to be for the rest of your life. My first thought,
knowing nothing about that property, is that it would be
a good idea to look at what house you could
invest in, because that might not be the highest yielding property.
You know, you didn't buy this property for it to
be a good investment. You brought it to live in,
or you brought it off your your late father, and
so it might not be the best use of your money.
(19:30):
I think it'd be very worthwhile to win a financial
advisor and say okay, if I sold this, what else
could I do with it? You might not sell it
straight away. You know there's going to be a bit
of change for you at the moment moving over to Brisbane.
This probably is a good idea to rent there for
a bit, you know, find your feet. There is a
world though that you move over there, you absolutely hate
it and then move back. I've got a friend whose
(19:51):
parents moved over to Australia basically moved their life over there.
We're over there in Melbourne for four weeks and then
ended up moving back because they hated it. Not saying
that's going to happen to you, John, because you've got
a good reason your daughter over there to go go
spend some time with. But it would be worth not
necessarily making some snap decisions, but going over there renting
for a bit, have a conversation with a financial advisor
(20:13):
about potentially selling that. You'd also want to think about,
do you is your intention to eventually buy in Australia
and you just want to say, okay, well how much
is that going to cost for that property in Brisbane?
Am I still sorted for my retirement? So there are
a lot of That's kind of how I'd go about
thinking about it. But if I was to read my
(20:33):
tea leaves and you had a good convo with a
financial advisor, you probably would find that, actually, maybe that
property is not the absolute best use of my money
right now. Maybe I should sell that, maybe by a
high yielding investment property, maybe keeping that a bit more
liquid in terms of a managed bundle shares and drawing
some of that down to supplement your income. There are
lots of wee options. But that's how I'd go about
(20:56):
answering that question and thinking about it.
Speaker 6 (20:59):
Yeah, that's great because it's about five ninety four I
was to sell it, So that's quite good, you know. Really, Hey, look,
that's great advice. Guys, Thank you so much.
Speaker 2 (21:07):
That's what we got them for. Hey, got on you, John,
Good luck with that. Actually a big move, isn't it.
It was just while you were giving John a bit
of non financial advice, just looking at the sort of properties,
I was taking a guess at that price. And it's
a difficult one, isn't it when it comes to making
that decision as to whether you'd sell up everything and
(21:28):
then move over there Because you'd really want to get
us get a feeling for where you're going.
Speaker 4 (21:32):
Well, the first question that I always have when people
ask me these kinds of things is is that property
that you're thinking about selling or keeping as a rental
is that a good rental property. Now, what we often
see is that if somebody purchased a property to live
in it themselves, or in this case, purchased it off
their father or a parent or a mother's dogs aren't
(21:53):
or something like that, Often they are not necessarily the
best investment properties. They might be quite low yields, they
might not have a good shot at increasing in value
over time. And John's instance, it was an over sixties unit,
so that means that only people who are sixty years
old or over are allowed to live in it. That
can limit your tenant pool. That can also limit who
(22:14):
you sell to. I think John might have said that
it was no longer an over sixties unit, but I
might have missed that we detail. So I think that
there is a good argument for reviewing it. And most
of the time the advice might be to sell it,
depending on the situation, and invest it in something else,
whether that's a high yielding property or some other investment
(22:36):
that's going to give that better return. But if you
bought something with that homeowner mindset of of I'm buying
this because I want to live in it, it might
not be a good rental my own house. If I
moved out, it'd be a terrible investment property. I'd sell
it in a heartbeat and buy something better.
Speaker 2 (22:52):
Was a terrible investment property.
Speaker 4 (22:53):
Well, in my example, it's at the it's at the
upper end of Auckland. Now that's not to say that
it's by the way that's worth millions and millions, right,
but it's a nice part of all. It's above the
average house price. You know, my investment properties in Auckland,
they're worth about seven hundred and fifty to eight hundred
(23:16):
and fifty thousand dollars, right. My house is worth a
bit more than that, and so the rental yield would
be quite bad. And so that's where I'm like, I
bought that because I like it, but I would never
keep it as a rental property.
Speaker 2 (23:27):
Okay, that's interesting stuff. Right, we're going to be back
in just a moment. It is twenty No, we're not
going to be back in Just what am I saying?
We're not going anywhere. We're going to say hello to Eilane. Hello, Eilane. Hi, Hi,
what would you like to share with us today?
Speaker 7 (23:43):
Well, not sharing, it's just my logic would tell me that,
and probably thinking of if people lower down that could
probably only afford one property and not be looking at
buying shares or whatever to make money. Is it not
(24:05):
then preferable to if you can save a deposit to
buy your own home, because if you don't, if you're renting,
that money is dead. You may be losing five hundred
a week or one thousand a week, depending on where
you're renting and getting. It's not bringing you anything in
whereas if you if you're paying off a mortgage, even
(24:26):
though you are paying a lot of interest, you do
end up with something in the long run. It's marketable.
Speaker 4 (24:32):
Yeah, that's a really interesting question, Eileen. And the first
thing that I'd probably say is defending the people who
say just rent and see and invest. Sometimes the thinking
is that if you're able to rent, say it, five
hundred dollars a week, to buy that same property and
then pay your rates and your maintenance insurance, maybe that's
going to cost you eight or nine hundred dollars a week.
(24:52):
So perhaps what you do instead is you take that
three or four hundred dollars extra a week that you
would have spent owning a property, and you invest that
in shares, or you invest that in your key we Savor,
You invest that in some sort of managed fund, right,
but you put that money you would have otherwise spent
if you owned that property you keep renting, you put
that somewhere else. The one thing that I was saying
to that, I was just having a good old chit
(25:13):
chat to Peter wolf Camp as I was walking in
here and he was walking out from previously in the shows.
While that all sounds good in practice, I've never met somebody,
and hopefully somebody's going to call up and prove me wrong,
but I've never met somebody who's decided to rent and
actually taken that three or four hundred dollars extra a
week and put it into a managed fund all their
key we Saver and done that over twenty years or so.
(25:36):
And I think the reason that we probably don't meet
many of those people is that once people have money
in their account, they tend to spend it, because then
they go on lovely holidays or they say, oh, I've
got a bit of money in here, let's go buy
a nice account. Whereas if you own your own home
for savings, it's for savings. You can't say to the bay,
I don't feel like paper mortgage this week, I'd like
to I'd like to go on holiday. Well you can't
(25:57):
do that because am said says no, You've signed up
to pay them some money and you have to do it.
Speaker 7 (26:03):
Which more or less person my point, doesn't it suspect, Well,
that's your own rent.
Speaker 2 (26:09):
Yes, that's right. I mean that's look generally, that's that's
the understood sort of idea is that it's dead money.
But sometimes things can shift a bit where people think, well,
actually the rents, you know, the housing supplies improved rents
are not quite as expensive. Maybe there is more choice
to rent a bit longer and while it suits you.
I think that's generally where where the where the conversation oscillates,
(26:31):
isn't it anyway? But a home is a home. Hey,
thanks for your call. Thanks for your call, Eileen.
Speaker 4 (26:37):
I had to stop myself that entire call from singing
that song that but come on, Eileen.
Speaker 2 (26:44):
Well that's good. We could go to the break with
that just about, but maybe not. We will, in fact,
we will go to the break. It is when we
will touch on we want your cause, by the way,
the whole equation about renting versus buying, and when the
tension eases on having to do one or the other,
what do you prefer? It is twenty four minutes to five,
(27:08):
News Talks, News Talks. He'd be with Tim Beveridge and
we're with Sorry what I was going to say mcnatter.
We got so busy distracted talking about other things. We're
talking about renting versus buying, and Matt Hello.
Speaker 3 (27:20):
Yeah, so's yeah, I'm just ringing that I've got a
few problems myself. I read that we've got five places
a lot four now I solved on a couple of
weeks ago. But the best thing is I've always told them, John,
say that for your own place, because rents always go
up at the moment that just right to be well
the lowest So what wife of this place that twenty
(27:41):
odd years ago? That's a seven percent, so we haven't
seen them up there before.
Speaker 4 (27:48):
Well, that's exactly right, right. The thing that people always forget,
rents go up as long as you lock in your mortgage.
For if you lock in your mortgage at today's interest
rate for say five years, your mortgage repayment is not
going to change for five years, people's rents will go up.
Where are highly likely to go up over the next
five years, right, it tends to be about four percent
or so. So if you're on, if you're paying five
(28:09):
hundred bucks a week at the moment, it might be
five twenty next year, and then it's going to be
five forty, and then five sixty could be sex hundred
bucks that you're paying in five years time, whereas your
mortgage bound be saying the same. And that's why we
hear like Ben's example before little earlier in the show,
where he was saying, oh, yeah, I've owned my home
for eight years. I'm paying only eighty bucks an extra
a week compared to my neighbor who's renting at the moment.
(28:31):
And that's what tends to happen over time.
Speaker 3 (28:33):
So you did, right, Matt, Yeah, what wayes go up
each year too? So the long term is the best
bestrong and get your own house even if you have
an aortmum of that, if you've got a trade, you
can move outside, move somewhere else because you got to
want to bring up a family. That's what you should
be looking forward to the future.
Speaker 2 (28:51):
I think, Look, I agree wholeheartedly with you, Matt. I
think the discussion around renting and buying is simply about
how much pressure you're on and how long you can
give it. Because you know, there's a time when rents
are fairly stable for a while, when you can afford
to build up that deposit, and that's probably where the
discussion comes in, isn't it.
Speaker 3 (29:08):
Yeah, And in that way, your house haus is always
going to be going up too, So there's an investment
in the future as well.
Speaker 4 (29:14):
Yeah, of course depends on how long you're holding it for, right,
Like there are times where house prices have basically saved
flat for ten years. Like if you're in Wellington from
two thousand seventy sixteen, you had nine years where your
house basically didn't budge those Paul Wellingtonians. Actually, in some areas,
you know, house price is down thirty percent since the
peak of the market. Now you know, if they hold
(29:35):
it for twenty years, they'll probably be okay. You know,
house prices will likely recover, but you know it can
take a long time. Right now, how long have you
owned your five rentals for? When did you buy your
first one?
Speaker 3 (29:47):
I bought the first one, two fairs and the last
one of their two pairs and.
Speaker 4 (29:51):
Then yeah, okay, so over that time, property has probably
been great for you because you've owned that for like
fifteen to twenty five years. Yeah, I mean your mortgage
would have been about sixpence when you first purchased that
that investment proppery in the year two thousands, and you
would have seen the rink go up from maybe three
hundred to six hundred backs a week something on those lines.
Speaker 3 (30:12):
Oh, it's going up from three hundred up the four
four hundred. Well no, actually I don't have a read
one on only we're at four eighties of LUs because
I always see because I always took to the tenants.
I've always try to make them desaved and lady put
money away from the iron here.
Speaker 2 (30:28):
Good on you? On you so you're not trying to
squeeze the until the pip squeak.
Speaker 3 (30:32):
No, No, that's so. Yeah, I don't know. I'm a
pretty good name, would.
Speaker 2 (30:37):
Well that's good mate, I mean I think that's it's
all part of the rich tempest. Isn't it. You know,
pass but a good will on and you've got tenants
who want to stick around too.
Speaker 3 (30:44):
Yeah yeah, yeah, well that certainly something that you don't
want to. Well, got the last bike I sold at
the store to cook All and family and they weren't
good at looking a half of the house, but they
love the property. So I put the phone word on them.
I said, well, look, I'll give you a hundred days
either if they marry the up or you can board
the place. Come in and do that.
Speaker 2 (31:04):
Did they buy?
Speaker 3 (31:06):
They've goought it?
Speaker 6 (31:07):
Well when when pretty good with them?
Speaker 2 (31:10):
Good stuff, cheers Matt. Yeah, just now there was something
I did want to touch on as well. I mean,
here's a text here by the way, maybe I should
read this one out says house prices in New Zealand
is a complete ripoff. Now does that affect any of
the equation. I'm not sure house prices are. It's getting
more affordable, isn't it. But I mean, of course, you know,
(31:31):
even entry level it's still a lot a big commitment.
Speaker 4 (31:33):
Well, they have got more affordable, but more affordable doesn't
mean affordable, right, They're still expensive over time. What I
would say to is, if we look at the average
change in house prices and what's happened with wages and
how much the average person is earning. House prices today
are actually more affordable than they were before the COVID boom, right,
because incomes have gone up much faster than house prices
(31:56):
have over that five year period. Now that wasn't always
the case. Back in twenty twenty one, house price will
gone up much faster than incomes, but now they've come
back well, incomes have still continued to increase. I suppose
The thing when we talk about repoffs, though, is they're expensive,
but people are willing to pay them. And we see
that because New Zealand transacted about eighty thousand houses over
the last twelve months, and that's meaning that a seller
(32:19):
is willing to sell at a specific price and a
buyer is willing to pay that. So you know, whether
something's a ripoff or not probably depends on your perspective. Right,
if you're willing to pay a thousand dollars for a
French bottle of wine, I'd say that was a ripoff.
Other people would say that was good value. Right, But
it does come down to I do see tens of
(32:40):
thousands of people buying and selling properties at prices that
they're happy with, and so that kind of tells you
what the market price is as, doesn't it.
Speaker 2 (32:46):
Yeah. Yeah, unless you've done a really great job of
saving for your retirement as well, you're not going to
be paying much rent while you're on the pension, this
person says. Here, Kate says, having a home when I retire,
shabby and uninsulated as it is, I'll be grateful. I
don't know if to use my pension to pay mo
rent as well as everything else. I mean, that's the
basics of.
Speaker 4 (33:05):
Well, that is right, you know, even sometimes I mean
I'm quite young, right, but I walk around the house
and think, well, you know what if the world turned
to absolute not very nice stuff, you know, because I
can't say that that word that begins with this on
the radio. At least at half my house, right, like,
even if I got really sick and I couldn't work. Yes,
I've got a mortgage, but eventually I won't have one,
(33:26):
you know, at least at half my house at least
would be comfortable living here, even though it was built
in the nineteen thirties and sometimes needs a bit of work, right,
And I think that had a lot of key wes
take a lot of comfort in that.
Speaker 2 (33:38):
Yeah. Absolutely, Hey, let's take another call Alan, Hi.
Speaker 3 (33:42):
Yes, how you.
Speaker 8 (33:44):
I absolutely swear if I own your own home as
soon as you can, because you're paying rent, it is
absolute dead lost money. At least if you're paying a mortgage,
it's like putting money in the bank and getting the low.
Speaker 9 (33:58):
Interest rate on it. It's a long term venture and
it's a roof over your head to boot. Yeah, helped
our daughters do the same thing. We sat them down
and said, you're paying four hundred and fifty a week
at the time and rent and it's gone. Whereas if
that was mortgage, it's a means to an end, even
(34:23):
if it takes you twenty ideas.
Speaker 2 (34:27):
Yeah, I guess there's a point as if your mortgage
is how much more expense. It's about their affordability the
mortgage as well versus rent, and where you're at with
because if your.
Speaker 9 (34:36):
Well, we pointed out basically we put her in she's
aiming too high for our house, I says, first home,
don aim so high, bring it down and for an
extra forty to fifty dollars a week you got mortgage
paid for on top of the existing rent and there's
(34:57):
the only difference. But the big thing we pointed out
was hit some flatmates and friends and because you had
a three bedroom house.
Speaker 2 (35:06):
Actually, that's something to be said, isn't it when especially
when you're single, because once you're married you can, you know,
married couples, it's not so easy necessarily get the flatmates
to share the marital house with, doesn't it. So if
you're a young person, if you can try and get
them flatmates to pay your mortgage for you.
Speaker 4 (35:21):
No, we've seen that a lot, but it's much easier
when you're in your twenties.
Speaker 2 (35:25):
Right.
Speaker 4 (35:25):
Once you get into your thirties and you're married and
you're thinking about having kids, it's not as easy or
it's not as desirable to have other people living with you, right,
But there's a time stage for it. One of the
things I often say to people is, if you did
well Allen was talking about, and you buy this house,
you're into out one of the other bedrooms, charge your
flatmate two hundred and fifty bucks a week. If you're
(35:45):
putting that into extra debt repayment, you can shave years
off your mortgage. Right Because if you're paying it down
more quickly, especially at the start when your mortgage is
at the highest. That makes a hell of a difference, just.
Speaker 2 (35:56):
Quickly, because we haven't leved for much time for it.
But you write a piece about you've been doing a
bit of more of work about you know what's going
on around and how that's going to feed through to
interest rates. What's your take on things?
Speaker 4 (36:06):
Well, I suppose the big thing is that a lot
of people are worried that if we see petrol prices
going up, that means more inflation. So isn't the Reserve
Bank going to increase the OCR and does that mean
higher interest rates for us? Well, the Reserve Bank governor
just came out on Tuesday, actually gave it, giving a
speech saying, look, we're probably just going to look through
(36:26):
the initial or the increase. So the fact that petrol
prices are up right now, that's not going to necessarily
worry the Reserve Bank too much and force them to
increase the OCR. What they're going to be watching out
for is does that mean that the warehouse starts increasing
the prices of whatever is at the warehouse because it
costs more to ship stuff in from China, Because we're
(36:47):
burning diesel to get the stuff over here on the
boats and then we've got to move it from the
ports over into the warehouse. Does that turn into more
generalized inflation? And do we all expect more inflation because
of it? So that's what they're looking They're going to
look through and not worry too much about that first
effect of petrol prices. They're looking at that secondary effect.
Do we all start to expect more inflation? Are businesses
(37:10):
starting to increase their prices because of that? That's the question.
Speaker 2 (37:14):
It's kind of.
Speaker 4 (37:15):
Quite balanced at the moment. On one hand, the New
Zealand economy is quite weak. If one business starts racking
up their prices, maybe people stop buying off them and
go to their competitors, right because it's not like there's
heaps and heaps of demand out there and the economy
is running hot.
Speaker 2 (37:28):
Yeah, So I mean, what's your what if people are
looking at fixing? Of course, the banks always make it
a difficult, you know, equation, because it's all you if
it's cheaper short term and a more expensive long term.
You know, that's because they want you to go short
term because of the interest rates. Maybe are going to
creep up, I always think, But.
Speaker 4 (37:44):
Well sometimes you see the opposite. I mean, remember, back
when interest rates were up around seven point two percent,
the one year rate was actually higher than some of
the five year rates. Now it's the other way around.
The one thing that I've been very interested in is
many of the banks are increasing their rates, but they've
left the one year rate where it is. Most one
year rates are about four point five four point six
(38:05):
percent at the moment, whereas the two and the three
year rates are going up a bit more.
Speaker 2 (38:09):
Now.
Speaker 4 (38:09):
I recently locked in it two years because I thought
that gives me a bit of certainty. This was actually
before they went up, right, but it gives me a
little bit more certainty. And then if I need to
break it, well, if interest rates have gone up and
you break your ballgage, you're not going to pay a
break fee.
Speaker 2 (38:24):
Right, there's some food for thought for you. While we
will be back in just a moment. Of course, of course,
we've got the property of the week. It is in
Wellington and it is absolutely gorgeous. And I'll tell you
what I mean. For Auckland as would look at it
and go on, what a bargain. But it is an
(38:44):
absolutely stunning house. Will be back with the Property of
the week in just a moment. It's nine minutes to five.
Speaker 1 (38:50):
The one roof property of the week on the Weekend Collective.
Speaker 2 (38:55):
Yes, the one roof property of the Week is well
It has to be seen to be believed. And I'll
give you the address if you want to dial it
up on your phone. It's three Maramnui Way, Correct Bay's
Wellington City. It's four bedrooms, three bathrooms, two car garish.
The house is four hundred and thirty seven square meters.
It's quite big. Land of thirteen hundred is built in
(39:16):
nineteen seventy, which I sort of find that's a surprising date.
Maybe the extery would tell you that. But the house
inside and the views with the lap pool and everything,
and the view over Wellington, the outskirts of Wellington Harbor
with the ferry going past, it is absolutely stunning. It's
(39:37):
designed by an architect called Ian Athfield and it's just
an absolutely stunning house that I think, I don't want
to say if it was an awland because you probably
get sick of hearing that Walingtonians. But it's valued at
about two point seven million dollars. But I don't know how.
I don't know how I can sell this to people,
but it's what did you say yet?
Speaker 4 (39:58):
Well, I was just talking about that. When you look
at the photos of this property, they've done just an
outstanding job on the scaping. And you know, when you
walk out and you got all this nice greenery and
you've got this what looks like Mediterranean style stone not
as your deck, you just think, wow, you could be
anywhere in the world right now, but you're in Wellington.
The first thing I saw when I looked at this
(40:20):
property was the was that one roof estimate of two
point seventy seven MILLI and I just thought, thank God
for the Wellington property market downturn, because if you wound
back the clock maybe three or four years, that probably
could easily have been worth it around about that four
four and a half mil, just because how how battered
the Wellington property market has been recently. But yeah, it
(40:42):
has to be seen to be believed, be believed priced
by negotiation.
Speaker 2 (40:46):
So you know, look, maybe if I win the power ball,
I'll just put a little you know, pop in and
buy it just for a Wellington bolt hole for when
we went a few days away. Um, of course, if
Tim Beverrige disappears from the airwaves, we know what will
have happened tonight.
Speaker 4 (41:01):
What's the jackpot up to?
Speaker 2 (41:02):
I don't know, twenty something million. You know it's enough
enough to you can have a few nice little jaunts away.
Couldn't you a little bolt holes.
Speaker 4 (41:10):
Or one house in Hoon Bay.
Speaker 2 (41:14):
Anyway, great to catch up er the parents Squas next
with Nathan Wallace.
Speaker 1 (41:19):
For more from the Weekend Collective. Listen live to news
Talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talk
sedb Dare you.
Speaker 2 (00:16):
New, yes? Welcome then, well, welcome back to the Weekend
(00:42):
Collective onton Beverage and we want your call. This is
the one roof radio show eight hundred and eighty ten
eighty and text ninety two nine. I'd love you to
join the conversation and what we have to talk kick
it off with today is that for look, for a
long time, most people, I think most people assume that
at some stage in your life you're going to end
up owning your own home. And I mean, I guess
(01:04):
the question is when you do that. But eventually there's
a question about whether you're going to own your own home,
do whatever it takes to get onto the property ladder
and then go from there. But there has been there's
always a suggestion to be honest, but there have been
a few increasing suggestions that might be moving away from
that advice, suggesting that it may be it is a
better idea to reput your money elsewhere. And I could
(01:28):
probably say that we've seen a shift in the discussions
around investment and a lot more enthusiasm than there used
to be for the shear market and other markets. But
of course, you know, when it comes to owning a property,
it's not just the cost of the property, but you've
got the mortgage repayments, you're paying to maintain the property.
I don't know, maybe you need a new roof not
long after you bought it. Speaking for a friend, I e.
Speaker 3 (01:49):
Me ah.
Speaker 2 (01:50):
And you know if you if it was a rental,
you know, maybe you wouldn't have to worry about that.
You've got to cover the rates, insurance. I mean, if
you're Wellington, you've got these water bills which are mounting up.
Other costs that can add up pretty quickly, and so
that is the money that some investors argue might be
better spent on investments and just rent somewhere, rent somewhere nice.
So have you gone through that equation yourself? I think,
(02:13):
to be honest, everyone goes through that equation at some stage.
But it still ends up being about just delaying or
advancing the question whether you when you buy. But there
are some people who say, look, just rent, just rent
and do something else with your money. Is it still
worth your money to buy a place on your own
And what are the considerations? Because I say, maybe it's
not just about about the money. It's a home, so yeah,
(02:36):
eight hundred eighty ten eighty would you get on the
property ladder at the same time, if you are having
your time right now, what would you be doing renting
or buying eight hundred eighty ten eighty anyway, sitting patiently there,
he's champing at the bit there as he always is,
to discuss that. He's resident economist at OPA's Partners and
his name is Ed McKnight.
Speaker 4 (02:57):
Great to be here to him.
Speaker 2 (02:58):
Hey, we were just talking before and despite you know,
the panel always has heavy topics, you've had a great
star to your day today.
Speaker 4 (03:06):
Well, I mean, what's lots of love about being up
here in Auckland. You know, it's a beautiful part of
the country. Anybody that living south of the bomb Bays
might might disagree with that, but.
Speaker 2 (03:15):
Or north of north of whatever it.
Speaker 4 (03:18):
Is, the Auckland, you can't what they're called. And I'm
such an Awkland neither can I.
Speaker 2 (03:27):
But actually, you know, because we've been through this terrible
period of weather and my thoughts and feeling going out
to people in Northland and things, but gosh, I was
just so relieved when the sky is cleared yesterday and
your blue sky and you know what, you know, life's
pretty good sometimes on a beautiful fine day, well sometimes
at Auckland.
Speaker 4 (03:43):
And that's where we get to sit here and ponder
whether you should be renting or whether you should be
out of your own home.
Speaker 2 (03:48):
Well, you you've been through. I mean, everyone goes through
that journey. Some people may sometimes wonder whether the choice
is driven by necessity, given house affordability and all that
sort of stuff. But you went through that whole thing yourself,
did you do you think you were going to rent
for longer than you did until you well re order.
Speaker 4 (04:07):
I only bought my own home after purchasing four investment
properties first, right, But I only bought my own home
because because I got married. Right, that was back in
December twenty twenty four. I bought that first home. And again,
the reason I did it was because I was engaged
at the time and owning a marital home to live
(04:29):
and was very important for Angela, my wife and her family.
And so we went ahead and we did it. But
I probably would have rented for a bit longer if
I had my choice, because owning my own home wasn't
that important to me. And I do see that this
is something that especially property people or investment people sometimes
talk about, which is renting first, either purchasing investment properties
(04:51):
or investing in things like key Wei Saver or the
share market before you do eventually pull that trigger. And
I suppose I saw Luke Kemey's talk about this on
the Prosperity Project Really Good endz Meat podcast the other day, saying, hey, look,
he lives in a really expensive home worth north of
two million dollars. And what he figured out is actually,
if you rent a really really expensive house, the yield
(05:13):
on it is quite low. Like the yield might only
be two or three percent in terms of what does
it cost you to live in that as a percentage
of the property's value, all right, Right, so it might
cost him twelve hundred bucks a week to live in
a two million dollar property. And so he thinks, well,
maybe I just don't buy this really expensive property and
I put my money into shares and other things. Now
(05:36):
that does work when we're talking about really really expensive houses.
The maths doesn't work quite as well if we're talking
about just a normal, average house like most people are
going to be living in.
Speaker 2 (05:47):
Is the is the yield on expensive houses a bit lousy.
Speaker 4 (05:51):
Oh one hundred percent right?
Speaker 2 (05:52):
Really? Yeah, yeah, it's not on PC's two or three.
That's really good.
Speaker 4 (05:59):
So so if you look at it at like a
really expensive house, some guys, some people might have been
following the Duval story.
Speaker 2 (06:06):
Right.
Speaker 4 (06:06):
We had Kenyan and Charlotte Clark who were running Duval.
They famously rented the properties that they lived in, which
is not actually as dumb as you might think first
on first hearing, because if you're living in a ten
million dollar house. I looked at some of the rental
properties they are living in. The rental yield on that
might have been one to two percent, right, So they
would be absolutely terrible, shocking investment properties to own, But
(06:28):
it'd be some rich person who wasn't living there so
wanted to rent it out for a while. So when
we're talking about those really expensive houses, the yield might
be two percent, whereas for a normal rental it might
be say four and a half to five percent. So
that's where the maths can really make sense. Especially some
one property developer I know actually lives in a ten
million dollar house over in Takapuna and he's figured out well,
(06:52):
rather than buying a big mansion like he's currently living in.
Maybe you should just take his deposit, which might be
quite a lot of money, and put that into developing
properties as opposed to putting it into one very big
expensive house. Again, that's where the maths makes more sense
at the big end of town in my mind, compared
to the average person listening to this show.
Speaker 2 (07:13):
Right, Actually, yeah, so, because it always feels that, I mean, remember,
there was a time when rent's got really expensive, and
in fact, I think that that equation has shifted where
people are like now, you know, the markets shifted more
towards in favor of the first time buy, and so
there are more people getting into their first hands because
I mean, as you say, you got a home because
(07:34):
you're you know.
Speaker 4 (07:36):
Because my wife wanted it.
Speaker 2 (07:37):
Your wife wanted a home in fact, you know what
I mean, if we were gonna, if we had to
do this hour in ten minutes, I'd say, well, hands
up those we've got a partner, and what chance is
it that the two of you don't want to have
a home together that you own. And I mean that's
a big emotional commitment and having your own roof over
(07:57):
your head, which is yours to do with as you want.
It's a big deal.
Speaker 4 (08:02):
I think so, And it's really the certainty of it.
I mean, it's so funn Only what I think about
is because that allowed me when we moved in there,
to go buy the couch that I always wanted, right,
or the speakers next to my TV that I always wanted,
you know, and just buy some of those things to
actually make a home. If you're living in a rental property,
and I've lived in a lot of rental properties in
(08:22):
my time, whether the apartments or townhouses or standalone houses,
and they're never they're not they never really feel like
yours because it's not yours, right, And so you don't
end up investing in things to make it more of
a home because you know that if you have to move,
you're gonna have to pack it all up, right. Whereas
if it's your own home and you know you're going
(08:43):
to be there for seven to ten years, you can
make it more homely.
Speaker 2 (08:47):
It's an interesting equation, isn't it. If you Yeah, we
want to know what you think. Have you wrestled with
the question about whether you're just better off renting than owning,
or is that just simply in the early days. The
equation that we all go through when we think, well,
you know, I haven't got a big enough deposit, can't
afford or you know what, my deposits not big enough.
(09:08):
In fact, this is the equation I went through before
we bought, was I thought, you know, my deposit isn't
big enough yet that I can buy something without feeling
I'm hemorrhaging on the interest. And that's so So that
was for me. I guess part of my thinking is
that there was a point where we couldn't afford to
buy until all of a sudden we could. And in
the end, the overarching consideration was wanting to own something
(09:30):
because you want to have kids and you want to
have certainty. We are living and it's your home, so
we're going to have from you. What was the decision
that motivated you as to whether you're going to continue
renting or you're going to actually buy a home. Because
the argument is there that maybe sometimes for some and
maybe it is the Biggert in town as ed saying
(09:50):
that it's better to rent eight hundred and eighty ten
to eighty text nine two nine two. And if you
are renting, I guess on what conditions would that commitment
be something makes it more palatable, like, okay, I'm going
to sign at least for two years certainty as opposed
to month by month or whatever. Sixteen past four. Let's
(10:11):
actually go to the call straight away, shall we ben Hello?
Speaker 5 (10:16):
You get a look. I own my neighbor's rent. The
difference in payments each week is eighty bucks, so I
pay eighty bucks more and that includes mortgage repayments, insurance,
and rates, so it's only eighty bucks difference. And at
(10:37):
the end of the year, my equity and my home's
gone up by about fifteen k and then whatever the
house price went up by. So I think you look
in the long run, your best. You're definitely better off
paying off your own mortgage than someone else's. And you know,
in seventeen years time, my house is going to be
paid off and it's going to be worth double what
(10:58):
I paid for it, and the rent is going to
have nothing, So you're definitely better off.
Speaker 4 (11:04):
Only how long have you owned that property for? Is
it about thirteen years?
Speaker 5 (11:09):
No, I've owned a coach eight.
Speaker 4 (11:12):
Okay, good, so you've paid it down for a while.
This is a really good example of what tends to
happen when a lot of people run the numbers about
renting versus owning, they look at it right at the start.
But Ben's example is actually very good because over time
what happens is as long as interest rates stay the same,
your mortgage payment is designed and calculated to stay exactly
(11:34):
the same for the full twenty five or odd years
that that Ben's mortgage is going to be over Whereas
over time rents increase, right, And so that's where Ben's costs. Yeah,
some of them will go up, like rates and maintenance,
but the big one, the mortgage is basically going to
stay the same while everybody else's rents go up. So
give it another five years, and actually your neighbor Ben
might be paying more than you are, and you're still
(11:56):
paying down some principle. And that's kind of that mechanism
or that people just forget about.
Speaker 2 (12:02):
You See, have you had to spend anything on the
property since you order?
Speaker 5 (12:06):
Yeah, we've done the kitchen, and we're in the process
of going in the bathroom, and I've slept the curve
bains on it. So look, it's definitely an increased in value.
And I think there's a difference between renting and owning
is if I want to paint a wall, or I
want to change something, will sleep a deck on I can?
So I think it is definitely a big dif to
the name, how much did.
Speaker 2 (12:27):
You have to spend on the bathroom and kitchen just
out of curiosity?
Speaker 5 (12:30):
We did it ourselves, and you know, some of it
was stuff we brought online. We got a little bit cheaper,
but I think I think we spent about seven or
eight grand on the kitchen and probably about the same on.
Speaker 2 (12:41):
The bathroom or bargain.
Speaker 4 (12:43):
The other thing to just point out as well is,
you know, let's say painting is a good example though, right,
because sometimes tenants will want to paint different rooms. If
you paint a room in the house that you own,
ben and it increases the value of your property, you
get the benefit of that. If the tenant does that
in a landlord owned property, the landlord gets the benefit.
So that's also any anything you spend on the property
(13:04):
as kind of it can benefit you as if whereas
if you were in a rental property it wouldn't.
Speaker 5 (13:11):
Yeah, and then like the property next door that's changed
teams twice since we've been here, and it's had about
four different tenants in it. So you know, there's beauty
about owning your own home as you know you're there
for as long as you're making the mortgage payments, so
you don't have to worry about that.
Speaker 2 (13:30):
Yeah, no, good stuff. Hey, thanks for you, cool mate.
I appreciate it, man, all right. One hundred and eighty
ten and eighty renting versus buying. The arguments are that
for some maybe it's worth renting for a bit longer.
I mean, I must admit to me, I think it's
always about whether you postpone that decision for a bit.
I don't think there's anyone who ultimately doesn't want to
own their own slice of property. In fact, tell me
(13:52):
I'm wrong. I mean, are there people out there who
are like, Look, my plan is I'm putting all my
disposable income if I that I can muster into investments
and I'm going to be worth a fortune that I
can live where I want, when I want, how I want.
How many of those people are there out there? Actually,
before we go to the break, how many do you
think they're out there?
Speaker 5 (14:10):
Like that?
Speaker 4 (14:12):
Ed, I'm going to say, like two people, you know,
both of them?
Speaker 2 (14:19):
I eight one hundred eighty ten eighty Or is the
question around wentting, renting and owning? Is that really just
a timing question? Because to me, I think ultimately, as
I said, you know, ultimately you're going to want to
own something. But then again maybe not, I don't know.
I eight hundred and eighty ten eighty. Also, by the way,
(14:40):
that does tie into the question. I know people who've
sold up, you know, I know of people should I
so've sold up their house for their latter years of
their life. They've freed up a lot of capitl and decided,
you know what, I'm going to rent for the rest
of my life and and have a good time. I mean,
maybe that's an example. I don't know. I might dig
into the economics of that with Ed and see if
he can dig into that as well. It's twenty one
(15:01):
past four. We'll be back and just detect John as
next three speed lines eight hundred eighty ten eighty News Talks.
They'd be with Tim Beverage. My guest is Ed McKnight.
The renting versus buying equation? What did it look like
for you and what were the reasons? Because it's easy
to say, oh, yes, you know, I'm going to rent
for the rest of my life because I'm going to
make brilliant investments and be worth millions and millions because
I won't have squatted it all on having to maintain
(15:24):
a property and all that sort of stuff. As Ed says,
maybe that's something for the big end of town. But
what was your what were your decisions when it came
to when it was time to rent or buy? John?
Speaker 6 (15:35):
Hello, Yeah, guys, good afternoon. I'm John and I live
in a two bedroom house in christ Church Own and
it's morgage free and I'm contemplating moving to Brisbane to
be closer to my daughter's baby.
Speaker 2 (15:50):
Yep.
Speaker 6 (15:51):
And I don't know whether I should rent always or
whether I should sell it you know.
Speaker 2 (15:57):
Oh, I mean rent it out as I came and.
Speaker 6 (16:01):
Go to Brisbane to rent, you know, in the meantime
sort of thing.
Speaker 2 (16:05):
It's an interesting one because you've got a foot in
the market. So Ed, what are you what's your initial
take on this?
Speaker 4 (16:09):
Well, the first question for you, John would be do
you have a sense of how long you're going to
be in Brisbane for? Is it going to be a year,
is it going to be forever? What are you kind
of thinking.
Speaker 6 (16:20):
I've moved a lot over the years up and down
to Tasman and I'm probably going to move now and
my grave mark will be there sort of thing.
Speaker 4 (16:28):
Yeah, so you go, so you go right, yeah.
Speaker 6 (16:32):
Yeah, yeah, it's the final move after a lot of
mounds from across the Tawsman and I bought this house
from my dad who passed away a couple of years.
It's an over sixties unit. It's no longer over sixties,
but it's Philly new sort of to bedroom.
Speaker 4 (16:47):
Okay, that's cool. And the other question I was going
to ask you, John, is when you go over to
Brisbane to be closer to your daughter, are you going
to live with her or are you going to try
and rent somewhere else or you're going to need to
buy buy your own place there?
Speaker 6 (17:01):
Yeah, look, I was thinking of renting first. Obviously I'll
probably get a job and that shouldn't be easy for
what I'm doing, But look, I think renting first. I
always find tipping my toes in getting settled first for
a bit, you know, and using them. I was seeing
of using the rent here to supplement autos. You know,
(17:24):
I don't know, well too bad.
Speaker 2 (17:26):
I mean, if you were wanting to get a two bedroom.
If you wanted to get a one bedroom in Brisbane
and you've got a two bedroom in christ Church, maybe
maybe you almost might wash its face. I don't know.
Speaker 6 (17:35):
Yeah, that's right. It's a bit of Yeah, I know
probably I thought some y sears that have done that
much might be able to say, hey, no that's the
way to go. But yeah, it's interesting.
Speaker 4 (17:48):
And John, last question for you before before I tell
you what's running through my head? Do you have many
other assets? Is it mainly just just the house you've
got or do you have a bit of money and
shares or a managed fund or savings or something.
Speaker 6 (18:00):
Yeah, I've got savings and I've got gold merchants and stuff. Yeah.
Speaker 2 (18:08):
Is this where you drop an eye? I've got an
extra couple of million in the bank, a bad house.
Speaker 6 (18:14):
Yeah it was previous Q super Australian super that I've
got stashed away, you know what I mean, that sort
of thing. So okay, there's something that I can draw on.
Speaker 3 (18:25):
Sweet.
Speaker 4 (18:25):
So the first thing that I'm thinking John, And of
course I always need to tell you. I'm not telling
you what to do because I can't give you financial advice. Ay,
because I'm not a financial advisor, B because we're talking
on a radio show and I've only asked you three questions.
But here's but here is how i'd go about thinking
about it. The first question you need to be asking
yourself is Okay, this property that you're currently living in,
(18:47):
the over sixties unit, it might be worth about say
three to five hundred thousand dollars. I might have got
that wrong. But what you'd want to ask yourself is
is this the best use of my money since I'm
not going to be living in it anymore and there's
pretty much no hope or you've got no intention of
ever moving back into it, moving into it because you're
off to Brisbane and that's where you think you're going
(19:08):
to be for the rest of your life. My first thought,
knowing nothing about that property, is that it would be
a good idea to look at what house you could
invest in, because that might not be the highest yielding property.
You know, you didn't buy this property for it to
be a good investment. You brought it to live in,
or you brought it off your your late father, and
so it might not be the best use of your money.
(19:30):
I think it'd be very worthwhile to win a financial
advisor and say okay, if I sold this, what else
could I do with it? You might not sell it
straight away. You know there's going to be a bit
of change for you at the moment moving over to Brisbane.
This probably is a good idea to rent there for
a bit, you know, find your feet. There is a
world though that you move over there, you absolutely hate
it and then move back. I've got a friend whose
(19:51):
parents moved over to Australia basically moved their life over there.
We're over there in Melbourne for four weeks and then
ended up moving back because they hated it. Not saying
that's going to happen to you, John, because you've got
a good reason your daughter over there to go go
spend some time with. But it would be worth not
necessarily making some snap decisions, but going over there renting
for a bit, have a conversation with a financial advisor
(20:13):
about potentially selling that. You'd also want to think about,
do you is your intention to eventually buy in Australia
and you just want to say, okay, well how much
is that going to cost for that property in Brisbane?
Am I still sorted for my retirement? So there are
a lot of That's kind of how I'd go about
thinking about it. But if I was to read my
(20:33):
tea leaves and you had a good convo with a
financial advisor, you probably would find that, actually, maybe that
property is not the absolute best use of my money
right now. Maybe I should sell that, maybe by a
high yielding investment property, maybe keeping that a bit more
liquid in terms of a managed bundle shares and drawing
some of that down to supplement your income. There are
lots of wee options. But that's how I'd go about
(20:56):
answering that question and thinking about it.
Speaker 6 (20:59):
Yeah, that's great because it's about five ninety four I
was to sell it, So that's quite good, you know. Really, Hey, look,
that's great advice. Guys, Thank you so much.
Speaker 2 (21:07):
That's what we got them for. Hey, got on you, John,
Good luck with that. Actually a big move, isn't it.
It was just while you were giving John a bit
of non financial advice, just looking at the sort of properties,
I was taking a guess at that price. And it's
a difficult one, isn't it when it comes to making
that decision as to whether you'd sell up everything and
(21:28):
then move over there Because you'd really want to get
us get a feeling for where you're going.
Speaker 4 (21:32):
Well, the first question that I always have when people
ask me these kinds of things is is that property
that you're thinking about selling or keeping as a rental
is that a good rental property. Now, what we often
see is that if somebody purchased a property to live
in it themselves, or in this case, purchased it off
their father or a parent or a mother's dogs aren't
(21:53):
or something like that, Often they are not necessarily the
best investment properties. They might be quite low yields, they
might not have a good shot at increasing in value
over time. And John's instance, it was an over sixties unit,
so that means that only people who are sixty years
old or over are allowed to live in it. That
can limit your tenant pool. That can also limit who
(22:14):
you sell to. I think John might have said that
it was no longer an over sixties unit, but I
might have missed that we detail. So I think that
there is a good argument for reviewing it. And most
of the time the advice might be to sell it,
depending on the situation, and invest it in something else,
whether that's a high yielding property or some other investment
(22:36):
that's going to give that better return. But if you
bought something with that homeowner mindset of of I'm buying
this because I want to live in it, it might
not be a good rental my own house. If I
moved out, it'd be a terrible investment property. I'd sell
it in a heartbeat and buy something better.
Speaker 2 (22:52):
Was a terrible investment property.
Speaker 4 (22:53):
Well, in my example, it's at the it's at the
upper end of Auckland. Now that's not to say that
it's by the way that's worth millions and millions, right,
but it's a nice part of all. It's above the
average house price. You know, my investment properties in Auckland,
they're worth about seven hundred and fifty to eight hundred
(23:16):
and fifty thousand dollars, right. My house is worth a
bit more than that, and so the rental yield would
be quite bad. And so that's where I'm like, I
bought that because I like it, but I would never
keep it as a rental property.
Speaker 2 (23:27):
Okay, that's interesting stuff. Right, we're going to be back
in just a moment. It is twenty No, we're not
going to be back in Just what am I saying?
We're not going anywhere. We're going to say hello to Eilane. Hello, Eilane. Hi, Hi,
what would you like to share with us today?
Speaker 7 (23:43):
Well, not sharing, it's just my logic would tell me that,
and probably thinking of if people lower down that could
probably only afford one property and not be looking at
buying shares or whatever to make money. Is it not
(24:05):
then preferable to if you can save a deposit to
buy your own home, because if you don't, if you're renting,
that money is dead. You may be losing five hundred
a week or one thousand a week, depending on where
you're renting and getting. It's not bringing you anything in
whereas if you if you're paying off a mortgage, even
(24:26):
though you are paying a lot of interest, you do
end up with something in the long run. It's marketable.
Speaker 4 (24:32):
Yeah, that's a really interesting question, Eileen. And the first
thing that I'd probably say is defending the people who
say just rent and see and invest. Sometimes the thinking
is that if you're able to rent, say it, five
hundred dollars a week, to buy that same property and
then pay your rates and your maintenance insurance, maybe that's
going to cost you eight or nine hundred dollars a week.
(24:52):
So perhaps what you do instead is you take that
three or four hundred dollars extra a week that you
would have spent owning a property, and you invest that
in shares, or you invest that in your key we Savor,
You invest that in some sort of managed fund, right,
but you put that money you would have otherwise spent
if you owned that property you keep renting, you put
that somewhere else. The one thing that I was saying
to that, I was just having a good old chit
(25:13):
chat to Peter wolf Camp as I was walking in
here and he was walking out from previously in the shows.
While that all sounds good in practice, I've never met somebody,
and hopefully somebody's going to call up and prove me wrong,
but I've never met somebody who's decided to rent and
actually taken that three or four hundred dollars extra a
week and put it into a managed fund all their
key we Saver and done that over twenty years or so.
(25:36):
And I think the reason that we probably don't meet
many of those people is that once people have money
in their account, they tend to spend it, because then
they go on lovely holidays or they say, oh, I've
got a bit of money in here, let's go buy
a nice account. Whereas if you own your own home
for savings, it's for savings. You can't say to the bay,
I don't feel like paper mortgage this week, I'd like
to I'd like to go on holiday. Well you can't
(25:57):
do that because am said says no, You've signed up
to pay them some money and you have to do it.
Speaker 7 (26:03):
Which more or less person my point, doesn't it suspect, Well,
that's your own rent.
Speaker 2 (26:09):
Yes, that's right. I mean that's look generally, that's that's
the understood sort of idea is that it's dead money.
But sometimes things can shift a bit where people think, well,
actually the rents, you know, the housing supplies improved rents
are not quite as expensive. Maybe there is more choice
to rent a bit longer and while it suits you.
I think that's generally where where the where the conversation oscillates,
(26:31):
isn't it anyway? But a home is a home. Hey,
thanks for your call. Thanks for your call, Eileen.
Speaker 4 (26:37):
I had to stop myself that entire call from singing
that song that but come on, Eileen.
Speaker 2 (26:44):
Well that's good. We could go to the break with
that just about, but maybe not. We will, in fact,
we will go to the break. It is when we
will touch on we want your cause, by the way,
the whole equation about renting versus buying, and when the
tension eases on having to do one or the other,
what do you prefer? It is twenty four minutes to five,
(27:08):
News Talks, News Talks. He'd be with Tim Beveridge and
we're with Sorry what I was going to say mcnatter.
We got so busy distracted talking about other things. We're
talking about renting versus buying, and Matt Hello.
Speaker 3 (27:20):
Yeah, so's yeah, I'm just ringing that I've got a
few problems myself. I read that we've got five places
a lot four now I solved on a couple of
weeks ago. But the best thing is I've always told them, John,
say that for your own place, because rents always go
up at the moment that just right to be well
the lowest So what wife of this place that twenty
(27:41):
odd years ago? That's a seven percent, so we haven't
seen them up there before.
Speaker 4 (27:48):
Well, that's exactly right, right. The thing that people always forget,
rents go up as long as you lock in your mortgage.
For if you lock in your mortgage at today's interest
rate for say five years, your mortgage repayment is not
going to change for five years, people's rents will go up.
Where are highly likely to go up over the next
five years, right, it tends to be about four percent
or so. So if you're on, if you're paying five
(28:09):
hundred bucks a week at the moment, it might be
five twenty next year, and then it's going to be
five forty, and then five sixty could be sex hundred
bucks that you're paying in five years time, whereas your
mortgage bound be saying the same. And that's why we
hear like Ben's example before little earlier in the show,
where he was saying, oh, yeah, I've owned my home
for eight years. I'm paying only eighty bucks an extra
a week compared to my neighbor who's renting at the moment.
(28:31):
And that's what tends to happen over time.
Speaker 3 (28:33):
So you did, right, Matt, Yeah, what wayes go up
each year too? So the long term is the best
bestrong and get your own house even if you have
an aortmum of that, if you've got a trade, you
can move outside, move somewhere else because you got to
want to bring up a family. That's what you should
be looking forward to the future.
Speaker 2 (28:51):
I think, Look, I agree wholeheartedly with you, Matt. I
think the discussion around renting and buying is simply about
how much pressure you're on and how long you can
give it. Because you know, there's a time when rents
are fairly stable for a while, when you can afford
to build up that deposit, and that's probably where the
discussion comes in, isn't it.
Speaker 3 (29:08):
Yeah, And in that way, your house haus is always
going to be going up too, So there's an investment
in the future as well.
Speaker 4 (29:14):
Yeah, of course depends on how long you're holding it for, right,
Like there are times where house prices have basically saved
flat for ten years. Like if you're in Wellington from
two thousand seventy sixteen, you had nine years where your
house basically didn't budge those Paul Wellingtonians. Actually, in some areas,
you know, house price is down thirty percent since the
peak of the market. Now you know, if they hold
(29:35):
it for twenty years, they'll probably be okay. You know,
house prices will likely recover, but you know it can
take a long time. Right now, how long have you
owned your five rentals for? When did you buy your
first one?
Speaker 3 (29:47):
I bought the first one, two fairs and the last
one of their two pairs and.
Speaker 4 (29:51):
Then yeah, okay, so over that time, property has probably
been great for you because you've owned that for like
fifteen to twenty five years. Yeah, I mean your mortgage
would have been about sixpence when you first purchased that
that investment proppery in the year two thousands, and you
would have seen the rink go up from maybe three
hundred to six hundred backs a week something on those lines.
Speaker 3 (30:12):
Oh, it's going up from three hundred up the four
four hundred. Well no, actually I don't have a read
one on only we're at four eighties of LUs because
I always see because I always took to the tenants.
I've always try to make them desaved and lady put
money away from the iron here.
Speaker 2 (30:28):
Good on you? On you so you're not trying to
squeeze the until the pip squeak.
Speaker 3 (30:32):
No, No, that's so. Yeah, I don't know. I'm a
pretty good name, would.
Speaker 2 (30:37):
Well that's good mate, I mean I think that's it's
all part of the rich tempest. Isn't it. You know,
pass but a good will on and you've got tenants
who want to stick around too.
Speaker 3 (30:44):
Yeah yeah, yeah, well that certainly something that you don't
want to. Well, got the last bike I sold at
the store to cook All and family and they weren't
good at looking a half of the house, but they
love the property. So I put the phone word on them.
I said, well, look, I'll give you a hundred days
either if they marry the up or you can board
the place. Come in and do that.
Speaker 2 (31:04):
Did they buy?
Speaker 3 (31:06):
They've goought it?
Speaker 6 (31:07):
Well when when pretty good with them?
Speaker 2 (31:10):
Good stuff, cheers Matt. Yeah, just now there was something
I did want to touch on as well. I mean,
here's a text here by the way, maybe I should
read this one out says house prices in New Zealand
is a complete ripoff. Now does that affect any of
the equation. I'm not sure house prices are. It's getting
more affordable, isn't it. But I mean, of course, you know,
(31:31):
even entry level it's still a lot a big commitment.
Speaker 4 (31:33):
Well, they have got more affordable, but more affordable doesn't
mean affordable, right, They're still expensive over time. What I
would say to is, if we look at the average
change in house prices and what's happened with wages and
how much the average person is earning. House prices today
are actually more affordable than they were before the COVID boom, right,
because incomes have gone up much faster than house prices
(31:56):
have over that five year period. Now that wasn't always
the case. Back in twenty twenty one, house price will
gone up much faster than incomes, but now they've come
back well, incomes have still continued to increase. I suppose
The thing when we talk about repoffs, though, is they're expensive,
but people are willing to pay them. And we see
that because New Zealand transacted about eighty thousand houses over
the last twelve months, and that's meaning that a seller
(32:19):
is willing to sell at a specific price and a
buyer is willing to pay that. So you know, whether
something's a ripoff or not probably depends on your perspective. Right,
if you're willing to pay a thousand dollars for a
French bottle of wine, I'd say that was a ripoff.
Other people would say that was good value. Right, But
it does come down to I do see tens of
(32:40):
thousands of people buying and selling properties at prices that
they're happy with, and so that kind of tells you
what the market price is as, doesn't it.
Speaker 2 (32:46):
Yeah. Yeah, unless you've done a really great job of
saving for your retirement as well, you're not going to
be paying much rent while you're on the pension, this
person says. Here, Kate says, having a home when I retire,
shabby and uninsulated as it is, I'll be grateful. I
don't know if to use my pension to pay mo
rent as well as everything else. I mean, that's the
basics of.
Speaker 4 (33:05):
Well, that is right, you know, even sometimes I mean
I'm quite young, right, but I walk around the house
and think, well, you know what if the world turned
to absolute not very nice stuff, you know, because I
can't say that that word that begins with this on
the radio. At least at half my house, right, like,
even if I got really sick and I couldn't work. Yes,
I've got a mortgage, but eventually I won't have one,
(33:26):
you know, at least at half my house at least
would be comfortable living here, even though it was built
in the nineteen thirties and sometimes needs a bit of work, right,
And I think that had a lot of key wes
take a lot of comfort in that.
Speaker 2 (33:38):
Yeah. Absolutely, Hey, let's take another call Alan, Hi.
Speaker 3 (33:42):
Yes, how you.
Speaker 8 (33:44):
I absolutely swear if I own your own home as
soon as you can, because you're paying rent, it is
absolute dead lost money. At least if you're paying a mortgage,
it's like putting money in the bank and getting the low.
Speaker 9 (33:58):
Interest rate on it. It's a long term venture and
it's a roof over your head to boot. Yeah, helped
our daughters do the same thing. We sat them down
and said, you're paying four hundred and fifty a week
at the time and rent and it's gone. Whereas if
that was mortgage, it's a means to an end, even
(34:23):
if it takes you twenty ideas.
Speaker 2 (34:27):
Yeah, I guess there's a point as if your mortgage
is how much more expense. It's about their affordability the
mortgage as well versus rent, and where you're at with
because if your.
Speaker 9 (34:36):
Well, we pointed out basically we put her in she's
aiming too high for our house, I says, first home,
don aim so high, bring it down and for an
extra forty to fifty dollars a week you got mortgage
paid for on top of the existing rent and there's
(34:57):
the only difference. But the big thing we pointed out
was hit some flatmates and friends and because you had
a three bedroom house.
Speaker 2 (35:06):
Actually, that's something to be said, isn't it when especially
when you're single, because once you're married you can, you know,
married couples, it's not so easy necessarily get the flatmates
to share the marital house with, doesn't it. So if
you're a young person, if you can try and get
them flatmates to pay your mortgage for you.
Speaker 4 (35:21):
No, we've seen that a lot, but it's much easier
when you're in your twenties.
Speaker 2 (35:25):
Right.
Speaker 4 (35:25):
Once you get into your thirties and you're married and
you're thinking about having kids, it's not as easy or
it's not as desirable to have other people living with you, right,
But there's a time stage for it. One of the
things I often say to people is, if you did
well Allen was talking about, and you buy this house,
you're into out one of the other bedrooms, charge your
flatmate two hundred and fifty bucks a week. If you're
(35:45):
putting that into extra debt repayment, you can shave years
off your mortgage. Right Because if you're paying it down
more quickly, especially at the start when your mortgage is
at the highest. That makes a hell of a difference, just.
Speaker 2 (35:56):
Quickly, because we haven't leved for much time for it.
But you write a piece about you've been doing a
bit of more of work about you know what's going
on around and how that's going to feed through to
interest rates. What's your take on things?
Speaker 4 (36:06):
Well, I suppose the big thing is that a lot
of people are worried that if we see petrol prices
going up, that means more inflation. So isn't the Reserve
Bank going to increase the OCR and does that mean
higher interest rates for us? Well, the Reserve Bank governor
just came out on Tuesday, actually gave it, giving a
speech saying, look, we're probably just going to look through
(36:26):
the initial or the increase. So the fact that petrol
prices are up right now, that's not going to necessarily
worry the Reserve Bank too much and force them to
increase the OCR. What they're going to be watching out
for is does that mean that the warehouse starts increasing
the prices of whatever is at the warehouse because it
costs more to ship stuff in from China, Because we're
(36:47):
burning diesel to get the stuff over here on the
boats and then we've got to move it from the
ports over into the warehouse. Does that turn into more
generalized inflation? And do we all expect more inflation because
of it? So that's what they're looking They're going to
look through and not worry too much about that first
effect of petrol prices. They're looking at that secondary effect.
Do we all start to expect more inflation? Are businesses
(37:10):
starting to increase their prices because of that? That's the question.
Speaker 2 (37:14):
It's kind of.
Speaker 4 (37:15):
Quite balanced at the moment. On one hand, the New
Zealand economy is quite weak. If one business starts racking
up their prices, maybe people stop buying off them and
go to their competitors, right because it's not like there's
heaps and heaps of demand out there and the economy
is running hot.
Speaker 2 (37:28):
Yeah, So I mean, what's your what if people are
looking at fixing? Of course, the banks always make it
a difficult, you know, equation, because it's all you if
it's cheaper short term and a more expensive long term.
You know, that's because they want you to go short
term because of the interest rates. Maybe are going to
creep up, I always think, But.
Speaker 4 (37:44):
Well sometimes you see the opposite. I mean, remember, back
when interest rates were up around seven point two percent,
the one year rate was actually higher than some of
the five year rates. Now it's the other way around.
The one thing that I've been very interested in is
many of the banks are increasing their rates, but they've
left the one year rate where it is. Most one
year rates are about four point five four point six
(38:05):
percent at the moment, whereas the two and the three
year rates are going up a bit more.
Speaker 2 (38:09):
Now.
Speaker 4 (38:09):
I recently locked in it two years because I thought
that gives me a bit of certainty. This was actually
before they went up, right, but it gives me a
little bit more certainty. And then if I need to
break it, well, if interest rates have gone up and
you break your ballgage, you're not going to pay a
break fee.
Speaker 2 (38:24):
Right, there's some food for thought for you. While we
will be back in just a moment. Of course, of course,
we've got the property of the week. It is in
Wellington and it is absolutely gorgeous. And I'll tell you
what I mean. For Auckland as would look at it
and go on, what a bargain. But it is an
(38:44):
absolutely stunning house. Will be back with the Property of
the week in just a moment. It's nine minutes to five.
Speaker 1 (38:50):
The one roof property of the week on the Weekend Collective.
Speaker 2 (38:55):
Yes, the one roof property of the Week is well
It has to be seen to be believed. And I'll
give you the address if you want to dial it
up on your phone. It's three Maramnui Way, Correct Bay's
Wellington City. It's four bedrooms, three bathrooms, two car garish.
The house is four hundred and thirty seven square meters.
It's quite big. Land of thirteen hundred is built in
(39:16):
nineteen seventy, which I sort of find that's a surprising date.
Maybe the extery would tell you that. But the house
inside and the views with the lap pool and everything,
and the view over Wellington, the outskirts of Wellington Harbor
with the ferry going past, it is absolutely stunning. It's
(39:37):
designed by an architect called Ian Athfield and it's just
an absolutely stunning house that I think, I don't want
to say if it was an awland because you probably
get sick of hearing that Walingtonians. But it's valued at
about two point seven million dollars. But I don't know how.
I don't know how I can sell this to people,
but it's what did you say yet?
Speaker 4 (39:58):
Well, I was just talking about that. When you look
at the photos of this property, they've done just an
outstanding job on the scaping. And you know, when you
walk out and you got all this nice greenery and
you've got this what looks like Mediterranean style stone not
as your deck, you just think, wow, you could be
anywhere in the world right now, but you're in Wellington.
The first thing I saw when I looked at this
(40:20):
property was the was that one roof estimate of two
point seventy seven MILLI and I just thought, thank God
for the Wellington property market downturn, because if you wound
back the clock maybe three or four years, that probably
could easily have been worth it around about that four
four and a half mil, just because how how battered
the Wellington property market has been recently. But yeah, it
(40:42):
has to be seen to be believed, be believed priced
by negotiation.
Speaker 2 (40:46):
So you know, look, maybe if I win the power ball,
I'll just put a little you know, pop in and
buy it just for a Wellington bolt hole for when
we went a few days away. Um, of course, if
Tim Beverrige disappears from the airwaves, we know what will
have happened tonight.
Speaker 4 (41:01):
What's the jackpot up to?
Speaker 2 (41:02):
I don't know, twenty something million. You know it's enough
enough to you can have a few nice little jaunts away.
Couldn't you a little bolt holes.
Speaker 4 (41:10):
Or one house in Hoon Bay.
Speaker 2 (41:14):
Anyway, great to catch up er the parents Squas next
with Nathan Wallace.
Speaker 1 (41:19):
For more from the Weekend Collective. Listen live to news
Talks It'd be weekends from three pm, or follow the
podcast on iHeartRadio.
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