August 10, 2024 • 39 mins
After purchasing a house, many think the next step is buying an investment property; but does the equation for property investing justify further buying right now?
Property expert Ashley Church joins Tim Beveridge on The Weekend Collective to discuss this and more.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:11):
And welcome back to the Weekend Collective. I'm Tim Beveridge.
Thanks for your company we want this is by the way,
if you missed the panel, you can go and check
it out on the Weekend Collective's podcast. Just look for
wherever you get your podcasts, and a good starting place
would be iHeartRadio, or you can just listen on demand
as well, of course. But this is the one Ruth
(00:32):
Radio show. I want your calls on eight hundred and
eighty ten and eighty text nine to nine to two
and joining me. He's he's been he's been coming on
the show for a little bit, a little while now.
He's a property commentator, investor and his name is Ashley
Church Today, Ashley, how are you going?
Speaker 3 (00:51):
I'm going good, Tim, How are you?
Speaker 2 (00:52):
Oh? Not too bad? Actually we've had I've had a
few texts about you in advance of coming on thing,
just suggesting that you actually that it was just a
stupid suggesting, given your name and your interest in property,
that maybe you could help fund the cathedral in christ Church.
But that's a very weak link to some sort of
joke that didn't happen from me. But there we go.
How are you?
Speaker 3 (01:12):
Yeah good, I'm good. I'm good. By the way, The
answer to your question about how long I have been
coming on the show is I think twenty seventeen. Wow,
it was a long time ago.
Speaker 2 (01:21):
That was back with that back with the original two Tims.
Speaker 3 (01:25):
It was. It was with Tim Robsboro and Tim Wilson.
Wilson Sorry, yes, yeah, yeah, one a hey before your
illustrious entry to the show.
Speaker 2 (01:36):
Yes, indeed, indeed, Hey, look there's a couple of there's
a big announcement for the RBNZ coming up this week
on the OCR, and I guess there'd be a lot
of people because it sort of ties into our whole
question around the equation for property investing and all that.
But let's let's kick it off with the discussion on
the OCR, which is coming this week. Inflation figures are down,
(01:59):
This is I had been talking a couple of weeks ago.
People are saying it's not traditionally the date where they
wouldnnow's to change cut in the cash rate. But simple
question for you, because it means a hell of a
lot to people who have got mortgages. Should they and
will they.
Speaker 3 (02:16):
They won't interesting the comedy about tradition, because there is
no tradition around this stuff. There's no set rules. It
depends on what's going on in the market.
Speaker 2 (02:24):
Any pattern maybe, okay, even that.
Speaker 3 (02:27):
I'd defy somebody to find any real pattern in this stuff.
He won't, and he won't for a range of reasons
that relate to wanting to make sure that he gets
that OC figure, so it gets that inflation figure under
that three percent mark for both non tradable and tradable inflation. However,
so I would be stunned if there was an announcement
that the o C. I will be catt at this
(02:49):
announcement next week, however, he will give a very dubbish
indication that it's either going to be cut later in
the year in stronger terms that he's given in the past,
or he at least going to give an indication that
the tracking is going to be down and that in
(03:09):
itself will be enough for the banks to continue dropping
mortgage interest rates. So the effect will be the same
as if he had cut the OCR.
Speaker 2 (03:15):
Because last time didn't he say that he'd thought about
even putting the rate up.
Speaker 3 (03:21):
Yes, he did. It's just a reason why. I think
there's a little bit of gainsmanship and brinksmanship that goes
on between the governor and the banks themselves. And so
the banks have had the ability and the capacity to
drop mortgage interest rates for quite some period of time.
And if you remember, around about that same time, there
was a couple of them that had actually wasn't by
a huge amount, but there was a couple of them
that had dropped some of their fixed term rates, and
(03:42):
I think that was his way of saying to them,
carry on with that, and I'll put the rates up
and basically deal to you in that way. So I
think it was basically just a little bit of game playing.
But things have moved on quite a bit since then,
and it's obvious that the economies and free fall that
were in a pretty bad way. And it's also obvious
that he has all but achieved the tag that he
(04:05):
has to, which is the getting inflation under three percent,
and so all of the conditions are right to drop it.
But as I say, won't be this announcement will probably
be the next one, but it won't matter because on
the back of what he does next week, more interest
rates will drop anyway.
Speaker 2 (04:19):
Of course, it's easy to have our reckons from the sideline,
But if you were in, if you were having a
significant say or making the decision, what do you think
should happen? What would you do?
Speaker 3 (04:33):
I'd broadly, and I hate to say this because you
know I'm not as big as supporter. Broadly, I think
he's probably doing it about right. I mean that three
percent is there for a reason, that one to three percent,
So he does have to get it back within that band.
And so the pain that we've just gone through, as
unpleasant as it was, was necessary. But equally it's time
now to do something to loosen it. The problem he's got,
(04:55):
he's damned if he does, any damned if he doesn't,
because if he did make an announcement to drop it
next week, any won't. But if he did, all that
means is at the rate at which morgage interest rates
would fall would be that much quicker. And that's the
la thing he wants to see. He wants an orderly
retreat of rates over the next twelve months, so he'll
achieve what he wants to without actually having to drop
it next week.
Speaker 2 (05:12):
I guess the worry that some economists might have and
just punters who've got their own reckons like me. Is
that it's I've always thought an analogy. In fact, it
might have somebody might have even agreed with me on
it is that it's a bit like It's not like
you're driving a sports car. It's like steering a freighter.
(05:32):
You can take your foot off the power and make
it and sort of try and put it in reverse
or slow something down. But it's one thing to exercise control.
It's another thing for the for the effects of that
exercise of control to actually have an impact. And I
worry that what he's that, you know, things are pretty
grim for businesses. I think, you know, power, the costs
(05:53):
of power and all that sort of stuff. There's a
lot of negative news out there, and you know, a
bit of a negative vibe. And I just worry that
if he doesn't make a change, it's almost keeping the
foot on for so long that you know, the foot
on the throats. Should I say that it could really
have a much more die consequence.
Speaker 3 (06:13):
That's the balancing act that he's playing at the moment. Interestingly,
there's one thing that hasn't happened yet, or certainly hasn't
happened to the degree that it needs to. And Tony
Alexander talks about this quite a lot, and this is
the where you reach a point where utility providers and
councils and basically monopoly providers absorb the cost of inflation
rather than passing it on. And you kind of have
(06:34):
to get to that point to keep to keep the
inflation rate down in a sustainable way. So the problem
we've had over the last eighteen months is some of
those providers from whom you've got to purchase their service
whether you want to or not. Councilors being a good example,
utility providers being another, have basically just said, oh, inflash
has gone up six percent, so we'll just pass it
on to the consumer. And it's really irresponsible. And Tony,
(06:55):
to his credit's been saying for about nine months. You
know that these guys have got to pull their head
and they have to do what every other business in
the country has been doing. And the risk at the
moment is that, given that hasn't happened to the degree
that it needs to, and you've got counsels going crazy
with the public checkbook, that inflation will take off again.
If we get a period of dropping interest rates so
that's what he'll be worried about at the moment. He'll
(07:17):
be concerned that if he takes his foot off the
pedal too soon, that it's going to take off the
flip side of that and you floate it. Freighter. Analogy
is a really good one because it is a freighter.
New Zealand's actually done a really good job. The gid
or the Reserve Bank's done a really good job of
guiding that freighter for you know, nihon thirty five years
since the Reserve Bank Act was enacted in eighty nine
or ninety. But this governor and the previous governor are
(07:39):
responsible for as much of the damage as they are
for the fixing of it. So the reason we're in
this position in the first place is because Or put
us here. And you know, you can argue, it's easy
to be wise in hindsight and go back retrospective and
you look at how things could have been different in
that post COVID period, But the reality remains, he took
his foot off the pedal too much. He fueled essentially
an orgy of spending and property investment over a short
(08:02):
period of time, and we're now dealing with the consequences
of that.
Speaker 2 (08:05):
Yeah, look, I don't know if anyone could argue against
Do you think all could argue against that? Do you
think if he was honest, I think he's say, yeah,
I think I might have. Think I might have, you know,
could have done better.
Speaker 3 (08:17):
I meant to put this guy in context. He had
but for the prior to coming to the Reserve Bank,
he'd been running the super Fund and I can't remember
for how many years, but he'd done a remarkably successful
job of that. You know, he'd increased that fund exponentially
over a number of years. So he came into that job,
as you know, as a golden headed boy, into a
job which I think he was completely unsuited to. And
you know, and it's not just what he's done with
(08:38):
regard to monetary policy. He's also introduced a degree of
wocism into the Reserve Bank, which is just completely inappropriate
and which has taken his eye off the ball, the
ball being the need to keep inflation under control.
Speaker 2 (08:49):
Has that to do? Did I see that there is
that to do with the makeup of the board or
something of the Reserve Bank, or the whole strange appointments
with people there, Maybe he didn't have quite the requisite
sort of monetary policy experience that you might expect.
Speaker 3 (09:04):
All of that, all of that, and if you look
at if you look at some of the nonsense that
comes out of the Reserve Bank now, and you consider
that this is the key organization in our country that
keeps monetary policy under control, you would have causes in
New Zealander to be very very afraid if this stuff
carries on because it's nonsense.
Speaker 2 (09:21):
So what does it mean for Actually, by the way,
if you're listening right now, welcome to the show. My
guest is actually Church. What should the Reserve Bank do?
It's this week when they announce any any or no
change in the o c R. How do you think
they will? What should they do?
Speaker 3 (09:37):
Say, as hard as it is to say, they should
keep it at the same level for at least another quarter,
but they should give and this is what I think
he will do, but they should give a pretty clear
stere that it's about to come down and that that
at the next the next announcement will be to indicate
that the that the OCN will be dropping, and maybe
(09:57):
even some indication of how much that drop might be.
And maybe you know, I don't expect it to go
this far, but he might an indication of what the
tragic of those drops will be. And as I said before,
just doing that, even though he doesn't drop the rate,
just doing that, you'll see mortgage interest rates drop almost
immediately on the back of that.
Speaker 2 (10:14):
How does that work for the banks if the cash
rates still where it is and they drop some of
their rates.
Speaker 3 (10:18):
Because the bank rate's only an indicator, the banks don't
have to well, when I say they don't have to
be guided by it, they kind of do have to
be guided by it because the Reserve Bank's got all
sorts of tools that it can use against the banks
if they don't comply with its wishes. But the banks aren't,
but the bank's borrowing them. The vast majority of the
bank's borrowing comes from sources other than the Reserve Bank,
and so, and they're borrowing at much cheaper levels at
(10:38):
the moment than they have otherwise been. So they're in
a position right now to actually have the capacity to
actually drop those rates by quite some significant margin. And
I think they're just waiting to do so. And you'll
see once there's sort of a clear signal they can
do that. You'll see a round of competition take place
quite quickly, but already you can see them positioning themselves
with respect to bringing those rats down. I think over
(11:02):
the last month or so, all of the key trading
have brought the rats down to some degree. It's some
quite significantly, and you'll see that continue.
Speaker 2 (11:09):
So at what point as rhetoric, So rhetoric is enough
for them to drop their rates?
Speaker 3 (11:14):
Yes, it is.
Speaker 2 (11:15):
Yeah, that's interesting because funny enough, I've got my mortgages
coming up, and like many New Zealanders, there's a lot
of people who are refixing. I've always gone for the
six month period, which hasn't really bitten me too badly,
but there's no way I'm always as soon as I
see really much cheaper long long distance rates, long term rates,
I become very very suspicious.
Speaker 3 (11:37):
That's the point I was just going to make. So
the reason the banks do that, and you'll see at
the moment you can get sort of anything over about
two or three years for five point nine to nine,
which is a good percentage point below some of the
sort of six months and twelve month rates. And you're
absolutely right. The reason they're doing that is because they
don't think in twelve months or eighteen months time that
rats are going to be at five point nine to nine.
They think they're going to be even lower than that,
So they're looking to lock in whatever suckers might be
(11:59):
prepared to actually to back those numbers in the meantime.
So as you say, yeah, when you see those numbers
coming down over the longer term, it's a pretty clear
sign that the banks are looking to drop their own
rats pretty quickly.
Speaker 2 (12:12):
Okay, cool, right, we want your calls eight hundred eighty,
ten and eighty. If you are actually someone who has
an interest in these things, which would be most New
Zealand as I would imagine, because even if you're not
a property investor or a renter or a first home buyer,
you might have savings in the bank as well, which
is not so much the property issue, but what should
the Reserve bank governor do? But more specifically, if you're
(12:34):
someone who's about to either buy a house and take
out some lending or a mortgage, or you're about to refix,
what are you betting on? What's your tactic going to be?
Because I can tell your mine is no specific financial advice,
and you'd be crazy to take it from me, but
I just give that disclaimer. I'm going to be going short,
so want your cause. Oh eight hundred eighty ten and
eighty What should the Reserve Bank Governor do this week
(12:56):
with the OCR back in the moment? It's twenty and
a half past four and welcome back to the Weekend Collective.
This is the one roof radio show. You can take
your calls on I eight hundred eighty ten and eighty
or text nine nine two. We're talking about what the
plan what the Reserve Bank Governor or the Reserve Bank
shoul announce this week with regard to the OCR and
what effect it we'll have on things? And my guest
is Ashley Church actually got another question just on the
(13:19):
way we react to news on things is part of
the consideration of the Reserve Bank governor. Like even right
now you can find headlines in the sort of property
news where there'll be a story about ours such and
such has sold so much over its value, and it
seems that the headlines deal in so much hyperbole. Is
(13:41):
that something that the Reserve Bank governor would be nervous
about because you know, a little bit of encouragement and all
of a sudden things go just potty, yes and no.
Speaker 3 (13:51):
I mean he's primarily looking at the numbers, or we
should be. But there is this general term which you
just syndicated and it sort of covers all of that,
and it's this word confidence, and it's it's a worry
that confidence will get to a point where inflation takes
off again. So there's a who little levers that he's
trying to pull. At the moment, those leavers are generally
(14:12):
working in the right direction, i e. Inflation's coming back
down into that three percent mark, but he's going to
be concerned at the idea that that confidence might get
to a point where people start to think, oh, well,
everything's okay again and start spending and going you know,
going crazy, to use a better term. So so the
stuff that you're seeing, which is very subjective and you know,
(14:35):
sort of often in the moment, I don't think he's
overly concerned about any more than he would have been
three months ago, when you know, when we were seeing
sort of talk of businesses closing or or businesses going under,
and that in itself wasn't enough to cause them to
drop the right earlier either. So it's sort of a
balance of those two things.
Speaker 2 (14:52):
Okay, let's take some calls on it. Dave, did I
you know?
Speaker 4 (14:56):
Dave?
Speaker 5 (14:58):
Yeah?
Speaker 4 (14:58):
How are you good?
Speaker 3 (15:00):
Mate?
Speaker 4 (15:01):
I wanted to get your view on the inflation numbers
because it seems to me like the when we include
the next quarter, we're going to seriously overshoot the two
percent target. If you look at the actual numbers on
the stats Statistic New Zealand website, the September quarter represents
one point eight percent of the three point three inflation
(15:25):
and if you look at the subsequent three quarters and
the trend, it seems highly unlikely we're going to have
a higher inflation figure this coming quarter than the last one,
So then we'd go under two percent.
Speaker 3 (15:41):
So yeah, what Days looking at that? Yeah? So what
Days referring to is that these figures, although they come
out quarterly, they're actually annual figures. And so what they
do is they out they're the average of the last
or this quarter plus the previous three quarters, and because
those have been going down, they keep the current rate artificient.
So what am I trying to say? The current figure
(16:03):
will be artificially higher than it might otherwise be because
it's also taken into account what the rate was in
the previous three quarters, and so Dave's right, if you
carry on at the current rate, then then you run
the risk of that rate going even lower. The one
thing that mitigates against them, and this will be the
one thing that was that was taken into account, is
the fact that there are actually two moving parts in
that inflation figure. One is the non tradable inflation figure.
(16:24):
The other ones the tradable inflation figure. The non tradable
inflation figures dropped through the The tradable inflation figure has
dropped through the floor. That's the inflation that we import
from overseas that's got dropped right down. But conversely, the
non tradable figure is still stubbornly high. And so although
his remitt your quite right, day all low, his remit
is about the average of those two and over over
(16:47):
that twelve month period, he will be concerned that non
tradable figure still being high, and he'll be wanting to
get that down as low as possible. So, while I understand,
I agree with your point, there is an argument for
what he's doing.
Speaker 2 (16:58):
Yeah, So Dave, do you do you have a worry
that basically he's keeping the foot on the throat just
for too long, and it's actually and have sort of
really die negative consequences because he hasn't been subtle enough
with that.
Speaker 4 (17:11):
Yeah exactly.
Speaker 1 (17:12):
I mean.
Speaker 4 (17:14):
When you read the economy, and I'm in business myself,
I know how difficult it is at the moment. There's
no free cash anywhere, so we're already squeezed as tight
as well, very hard. And coming back to that non
tradable inflation. So because the interest cost is the last
part of it when you look at rates and rents
and those things that are driving that non trainable for you,
(17:37):
So he can provide some relief there immediately.
Speaker 3 (17:40):
You know, you're quite right. That's a fair argument. That's
a fair argument. I mean, I accept your overall argument
that these things need to come down as quickly as possible.
I'm just I guess I'm talking about what I think he.
Speaker 2 (17:49):
Will do, and I think they'll keep it for it's
what's the quarterly inflation right now? It's it's quite low,
isn't it in New Zealand right now? Yeah? Yeah, okay, yeah,
I try and take that one. Yeah, No, I appreciate it.
Speaker 3 (18:07):
Date, Yeah, thanks, good feedback, mate.
Speaker 2 (18:11):
I mean, when you consider that I mean, I mean,
that would be a very good case for giving a
little bit of a relief, wouldn't it. But then again,
we get views from people like Brad Olsen, who we
have an a shade from time to time, said that
if if they did cut the rate, heads should roll.
So he's got quite a strong view on that too.
Speaker 3 (18:32):
Like a man with a strong opinion.
Speaker 2 (18:34):
Oh yes, we do, don't we. Actually there was another
question I had out of that, But you tell you what,
I'll save it for a second. We'll go and we'll
go to our next caller, Alan, Good afternoon, afternoon.
Speaker 6 (18:46):
Just take you off the speaker. Hypothetically, if I was
a punter with a few dollars to spare, would now
be a good time to put it away for a
year or so on a term investment.
Speaker 2 (18:58):
Without seeking specific financial advice. Actually you got to take
on that.
Speaker 3 (19:03):
Oh yeah, same as you. And I regard myself as
an expert on fixed term deposits, except to say that
unless you're talking about locking ellen about locking in a
rate right now before rates drop, my expectation would be
that if the OCA goes down, then then your fixed
ten rates will go down with it. So so over
the next twelve to eighteen months, you would expect to
see them dropping in the same way that mortgage interest
(19:25):
rats will drop. So I think what you were saying
is should should you take advantage of those rates while
they're still there? Yeah, I would. I wouldn't want to
comment on that. I don't regard myself as an expert.
Speaker 2 (19:33):
In No, we did, Alan, We did have one of
the guys from Harbor Asset Management on speaking about the
bond market, and if you want to go and check
out our podcast, there's some comments around you know that,
But it did seem that some of the conversations shifted
to maybe looking at those options as well. But there's
certainly no specific financial advice from us. Sorry, we have
(19:55):
to sit on the fence so obscurely.
Speaker 3 (19:57):
Thanks, thank you, thank you.
Speaker 2 (20:00):
Yeah, because actually there was I think it was about
a month or six weeks ago. We had a chat
with one of the guys and because the bond rates
had increases, had increased, and it was something where people
it's not so sexy, but for those who just want
cash in the bank sort of stuff, it was something
that was coming into play a bit more often. You know.
The thing that I mean earlier caller Dave, who's in
(20:21):
business and things, And this is just a general comment
sort of question to throw at you, Ashley. One of
the things that and it's not it's not particularly helpful
to dwell on it too much. But I do find
that the euphemisms that economists use kind of kind of heartless.
They talk about, oh, we have that there's going to
(20:42):
be a little bit of pain, and there's going to
be a bit of discomfort in things, and what that
pain actually looks like is people who can't make their
mortgage payments or who lose their jobs and things. And
I just wonder if there's a slight sort of disconnect
to the point that it makes it easier for them
to be a little bit harsh when maybe they should
(21:03):
consider that, you know, that the loss of livelihoods and
all that sort of stuff is a bigger deal than
just there's going to be a bit more pain.
Speaker 3 (21:13):
Yeah, I think that I agree with you. I suspect
it's probably something that happens, you know, sort of when
they come through the sort of varsity. It's that there
are acronism acronyms and things that they do. They pick
up this sort in common usage and also they use
that parlance because it's sort of generally understood by the market,
so you can, you know, multiple economists can can can
(21:34):
talk and be saying essentially the same thing. But I
agree with you when when lives are at stake and
people's personal circumstances or at sax, sometimes it comes across
as you know, a little bit not really reading the
room unfortunate.
Speaker 2 (21:48):
I mean you can understand it. They dwelled on the
individual circumstances the people that they wouldn't be able to
get out of bed and make a decision every day. Yes,
and quarterly inflation Mike producers confirm with zero point four percent,
So yeah, you know it's pretty large, is good. And
by the way, that podcast that I Fear Too was
on the twentieth of July. People want to check that out,
As with any of our podcasts, are always good to
(22:09):
listen to, but that was one specific one. Right, let's
we're going to move to extend this conversation. But I
thought just of a look at a couple of texts.
One says here we always get people who boast that
they fixed for five years on two point nine to nine.
That was from Mary who probably listened to the One
Roof pod podcast or show radio shots some stage where
we were probably saying, that's not a bad rate for
(22:31):
five years.
Speaker 3 (22:33):
So Mary, I was talking about that the other day.
It's interesting because I didn't. I mean, I, like most
people thought it was going to go even a lot
and and you know, if it had a little bit
of foresight and actually fixed at the time, and you know,
I guess sort of the idea of if only would
probably occur to a lot of people.
Speaker 2 (22:50):
But yeah, we've all got we've all got if only.
You know, for me, it's if only Hamilton. Look, let's talk.
I'm gonna put this question as a general one where
at what point does this person and says, should I
break my recently fixed mortgage rate of eighteen months at
six point eight nine to a six month at six
(23:11):
point nine to nine would I be charged to break
for if I go slightly high to get better rates
in six months time?
Speaker 3 (23:19):
That specifically, because every bank's got a different policy that
and there's several moving wheels in that. What I would
suggest is, rather than talking to the bank about that,
is talk to a mortgage broker. Go to a mortgage broker,
a reputable one, and they'll be able to get to
give you some pretty good advice and also give you
some scenarios and what the various different costs will be
(23:40):
as a result of breaking this is keeping a little
it's current rate until it expires.
Speaker 2 (23:43):
Yeah, because you can, you can jump back, and I mean,
I don't use a mortgage broker at the moment just
because our mortgage is, you know, reasly low level. In fact, actually,
of course it was the guy I've chatted to you
that you recommended, but I remember chatting with him about
it and I said, the bank's offering this, and he goes, oh, yeah,
that's pretty good. Just go with that, which was very good,
simple advice. High team. I'm a hound a second, let
(24:07):
me just clear that high collective team. I'm forty four.
I have twenty seven K and my husband and I
have no kids one hundred and fifty five combined income. Oh,
should we just give up on owning a house? But
both three generations of non high owners, both sides of
the family. Funny thing is that was something we discussed
in our meeting before the show about at what stage
(24:28):
people should give up or I would say not at
forty four.
Speaker 3 (24:34):
No definitely not at forty four. And there are other options.
I mean, we haven't got time to canvas them today,
but there are you know, one option, and I think
you and I have talked about it on the show
in the past. As I'm assuming this person's in Auckland
or Wellington or some way where housing's quite expensive, is
looking to buy an investment property and a location outside
Aukland or Wellington, so you've still got a piece of
real estate you don't necessarily live in it. I'd have
(24:56):
to go through those numbers and actually have a look
at what conceivably what they could do. But no, the
short answers don't give up. And at forty four, as
you say to them, circumstances can change substantially over a
for a short period of time, so keep pushing yes.
Speaker 2 (25:09):
And actually the reason it sounds so familiar is it's
actually a topic. The reason it is because it is
actually what we're going to be discussing with Lisa Dudson
on Smart Money tomorrow, So that Texter tune in tomorrow
because we are discussing exactly that at what point you
change your plans on whether you're going to be an
owner occupy and all that sort of thing. Yeah. Hey,
(25:30):
now what it does tie into, Ashley is the question
that I've teased a little while ago before that we
got into the one roof is the question about the
equation for investing at the moment. And there's a story
I think it's in the New Zealand Herald piece where
(25:53):
the low rates of yield are becoming you know, it's
harder and harder. You're having to subsidize the mortgage a
bit more, in other words, how much landlords have to
borrow and how much they get out of the rental,
and that the rental yield gap, apparently in this article
is about four percents, the largest in fifteen years. And
my simple question was, does the equation for property investing suck?
(26:16):
Right now? Okay, so let's just do it, but it
just unpack ittle going to unpack that unpack you.
Speaker 3 (26:22):
So the first part of this, so the article you're
talking about is written by An Gibson, and I didn't
read it because I'm not a subscriber of the Hero,
but I saw enough of the first sentence to understand
what she was talking about. So this is this is
based on and I'm not don't think Anne suffers from this,
but a lot of other people do this idea that
property investors are fat cats and making lots of money,
(26:44):
and when rents go up, you know the sort of
bathing and goat's milk, and you know, wonderful goat's milk.
The days, the days of rent covering the costs of
boning and a rental investment property, you probably have to
go back to the mid to late eighties to the
last time where that was possible. In most parts of
New Zealand, it just doesn't exist anymore. So, so property investors,
(27:06):
when they own a rental investment property, invariably subsidize that rental,
which means that the rent that comes and simply doesn't
cover the cost of the mortgage interest and the rates
and the maintenance and a whole range of other things.
So every rental property investor in New Zealand, not everyone,
but the vast majority of them are actually subsidizing their tenants.
So that's the first thing to get across. So what
(27:26):
she's talking about is the fact that that equation's got
particularly bad, certainly since two thousand and twenty two, when
the rates started going up as a result of the
two things. Actually this massive increase in mortgage interest rates
and the fact that the last government basically took away
the ability to claim interest as a tax coductable expense.
So you had this double wherem ME where it got
(27:47):
hugely expensive to own a property. So the reason that
land or you might say, why would you own a
property right now under those circumstances, And indeed, why would
you own a property at any time if you're not
making enough money on the property to actually cover the
cost of owning that property. The reason is capital growth.
So there's a truism in this country that property for
(28:08):
forty years basically doubled in value every ten years. It's
probably taking a little longer now, maybe twelve or thirteen years,
but it will still double every twelve or thirteen years.
So probably investors buy and are prepared to shell out
for the cost of owning a property to a greater
extent than they're actually earning income off that property, because
they expect that property to go up in value and
that's where they make their gain on the property over
(28:29):
the long term. And that equation is no different now.
And I think the expectation is that rates are going
to come down soon, and some of that pain will
fall away.
Speaker 2 (28:37):
It is interesting to hear you say twelve or thirteen
years because it wasn't that long ago. That not quoting
un necessarily, but it used to be eight years and
then it sort of shifted out a bit.
Speaker 3 (28:46):
But it does feel that that's not entirely true to
that's seven or eight years that you were talking about.
So in any given ten year period, property would double
in a seven or eight year period, but it would
sit flat and do nothing for two or three years,
of which three of those years it wasn't doing anything.
In the other seven it was doubling.
Speaker 2 (29:06):
Okay, yeah, that sounds like every ten or eleven years, then,
doesn't it. It's just that when it happens it, when
it starts to grow, it's an eight year cycle. It's
sort of what you're saying pretty much. Yeah, okay, yeah, yeah. Actually,
the interesting that there's an interesting tax if I was
going to be too a little bit Bofferinish on boffer
Niche on this is that if that is an interesting
(29:28):
one because if you are it's almost getting to the
stage where the inland and revenue because you know, if
you actually do buy a property, no matter how long
you keep it for if you bite with the intention
that you're that the money you make will be from
capital gain, that's actually the test for paying tax on it,
isn't it Not more?
Speaker 3 (29:47):
Not any more? It used to be. So that's why
the bright line test came in in the first place.
That's why National introduced it because prior to the bright
line test, they used to have something called the intention rule,
which I think is what you were.
Speaker 2 (29:57):
I thought it was still there regardless.
Speaker 3 (29:59):
The bright line test replaced it. So the intention rule, basically,
what used to happen was that there was no on
how long you could own a property before it was
regarded as to a point where it was regarded as
an investment property rather than a property that was bought
for capital gains purposes. And what used to happen was
the IID would sometimes do an audit and they'd trawl
back over ten or so years, and then they'd take
(30:21):
somebody to court, or they'd they'd hit them with the
capital gains tax. They and the party would take them
to court, and invariably the IID would lose because that
test was too oblique. So in twenty sixteen or seventeen
and whenever it was that national broad and national broad
in the two year bright line test, and the purpose
of that was basically to say, this is the line
(30:41):
in the sand. If you own a property for less
than two years and you sell it, then you pay
capital gains tax on it, because clearly you're not there
as an investor. You're a trader. But if you own
it for more than two years you're a property investor.
That pretty well, not pretty much. It did away with
the old intention test. That intention test has now gone.
The two year test is the only test.
Speaker 2 (30:58):
Excellent, no good stuff. Right, Let's take a moment. Will
your back if you want to give us your reckons
and what the property you know, how the equation is
working for you if you're a property investor as well,
because you are having to subsidize your investment. If you
ever borrowed a lot, buy a lot, give us a
call on eight hundred and eighty ten eighty. But also
the question of what's going to happen this week with
the OCI, what should happen and what will happen possibly
(31:22):
different things. News Talk said, be it's eighteen minutes to
five News Talk. Zi'd be with Tim Beverage. My guests
astually church. Actually, actually I've got quite a few texts
saying that the intention test is not superseded. It's still
there if you buy it. But in fact, I think
we might have been able to call on that Ashley.
But let's see where we go. Ray. Hello, Ry, I was.
Speaker 5 (31:44):
Just reading exactly ringing exactly about that. Were you not superceeded?
Speaker 6 (31:49):
Yeah?
Speaker 2 (31:50):
And how do we know it's.
Speaker 5 (31:52):
I've just gone all the way through it with a
property accountant.
Speaker 2 (31:55):
Okay. And if they said, yeah, what have they said
to you?
Speaker 5 (31:59):
They said, And if you follow them on Facebook there
property check group, you'll see them constantly saying that rule
still apply.
Speaker 3 (32:11):
So very interesting. So you know something that I don't
on that. I'm going to check into that.
Speaker 4 (32:16):
Yeah.
Speaker 5 (32:16):
I think, yeah, you speak to the guy that Smith's accountants,
But I think.
Speaker 2 (32:22):
Probably the things is that pragmat Yeah. I think if
you went to the tax department and told them that
you had bought a property with the intention of making
money out of the capital gains, even though you have
gone beyond the brik line or whatever, I think you Yeah,
that mind you, it's.
Speaker 3 (32:37):
Question Pray have to say. If that's correct, then I'm
not doubting what you say. It kind of makes a
nonsense of the bright Line test, because.
Speaker 2 (32:44):
Everyone who buys property is for capital gains the bright flippers.
Speaker 3 (32:51):
Yeah, and that was the purpose of the bright Line test.
The argument was that if you were holding a property
for more than two years and you were a trader,
you were a pretty lousy one. So and therefore you
were an investor. So if the intentional tests still apply
to me, that suggests that the bright line test actually
doesn't make any sense. So I'm going to do a
bit of research and that I appreciate you you're calling them, yeah.
Speaker 5 (33:12):
Because you'll even find in Australia the same thing occurs.
You have to say you have bordered against as a
hedge against inflation.
Speaker 3 (33:22):
Yep.
Speaker 5 (33:22):
You can't say you make you bought it intentionally to
capital gains.
Speaker 2 (33:27):
Because because in reality, unless most people buy it for
capital gains, Let's be honest, I mean everybody does. I mean,
that's it's almost the big delusion, isn't it.
Speaker 5 (33:37):
Ray, It's stupid. You know, either we have capital gains
tax or we don't.
Speaker 2 (33:44):
Yeah, well, I agree, that's agree that. I agree, Yeah,
I agree. Actually, you know what, I just the capital
the gains doesn't actually have me reaching for the smelling
salts on property because if there's still a lot of
money to be made, the fact that I have to
pay tax on it's just well, you know, I still
want to make the money. So where we go.
Speaker 3 (34:01):
You know, my view on this has always been.
Speaker 2 (34:04):
Sorry with Rayphah and then Ashley, sorry, where.
Speaker 5 (34:06):
You go as long as you're not paying it at
your marginal rate and they take into account inflation when
you purchased it, like in Australia now it used to
be that you had a base rate and then there
was an inflation bit that was added to your base rate,
you know, for how many years you sold it. But
that became too difficult. But what they did is they
(34:27):
turned around and they said that it's only fifty percent
of it is taxable as.
Speaker 2 (34:31):
A capital r just so there's no arguments about inflation, yes,
because you don't want to be.
Speaker 5 (34:35):
Taking to make it easier because the other ones had
to keep making calculations every year based on what the
percentage was for about ten years ago in the inflation
factor since.
Speaker 3 (34:46):
Then, That's what I was just going to make. I'm
just going to make the same point that Ray did.
So the fortunately it never went ahead. But the plan
that labor head was to introduce it at the marginal
text rate. But if you were going to do it,
my view has always been over got a problem with
the capital gains text provided you meet to conditions. One
of those conditions is that should only be living at
the point of sale, and the second one is it
should be universally and it should be a really low race.
(35:08):
So if you said, hey, it's a two percent capital
gains tax on everybody when you sell your property, regardless
of whether it's a private home or an investment property,
I think most Kipis might grumble, but that accepted. The
problem with what was being proposed was that it was
so draconian and it was so punitive that no sane
person could have accepted it.
Speaker 2 (35:27):
Hey, by the way, Ray, just a completely unrelated thing.
You mentioned the Australian market. There's there a little bit
of a twang there for you with an Australian accent
or what.
Speaker 3 (35:34):
I picked that up too.
Speaker 5 (35:35):
Yeah, I've been here for two years.
Speaker 2 (35:38):
Wow, Well, congratulations for hanging on to that accent.
Speaker 3 (35:42):
They go to the all blacks.
Speaker 2 (35:43):
Ray. Actually, I tell you what, people like Ray can
have a great time at the Olympics though, because Australia
do pretty well at the Olympics and then you've got
the cream on the top with the performance of our
New Zealand athletes, so she should be loving it. Hey, look,
we'll be back in just a moment. One roof of
(36:03):
Property of the Week is next ten five. Yes, welcome
back to the one roof radio show. By the way,
somebody sent me a link actually to the Land Revenue
site which does confirm that actually the bright line test
is just one way that you'll end up paying capital gains.
But if you buy it with the intention of selling
your property, it says clearly you will be up for
of course it's the big. It's the big. You'll be
up for capital at gains tax. But of course it's
(36:26):
the big sort of fib isn't it really that everyone
pretends that they're not. I'm just doing it for the
rental income. Anyway. Right now it is six and a
half minutes to five, which means it is time for
the one roof Property of the Week, which is going
to be announced in style just by me today.
Speaker 4 (36:43):
I think.
Speaker 2 (36:45):
Anyway, the wond roof Property of the Week, I think
we've sent a link to you on that, haven't we Ashley.
In fact, I've got a check of actually still there.
We've just got a couple of technical issues anyway. The
one roof property of the week which we always enjoys
it's like taking a little holiday just to go and
look at someone else's property is ten Beard Lane, b
aid in Lake Hays, Queenstown, and it's a stunning piece
(37:10):
of property. It's architectural villa set in a private location
in the hills above Lake Hays near Arrowtown. It's described
as having a timeless design, sitting on naturally in the
exquisitely landscaped contours, with established gardens and orchard and resort
like fire pit on the front lawn, solid timber floors,
Italian tiles, wooden joinery throughout. This property also comes with
(37:33):
a shared common ground with adyllic ponds, walking tracks, a
tennis court and more. And actually I can tell you
that the grounds are the first thing that stood out
to me is that just is an amazing looking property
with and the fire pit itself actually looks kind of
appealing itself anyway, and it can be yours for a
cool Well, don't take this as being you know what
(37:55):
exactly what it's going to go for, but the value
that it is estimated at on the one roof site
is three point nine million. Three point nine to five
million is the RV, but it looks like the RV
is maybe a couple of years out of date as well,
so it looks like quite an expensive property. Of course,
Queenstown property has been all all the rage, of course,
bucking all the trends, just continues to grow. Anyway, Ashley,
(38:19):
I think we've still got you there, have we certainly
we have got you there. Well, I think you've you've
got you can have another piece you could you could
contribute somewhere about be careful about your intention of buying property.
Taxman might be chasing you.
Speaker 3 (38:34):
Well, that's right, let's locked down in for a chat
at some stage when I've done a bit more research
and fascinated revelation.
Speaker 2 (38:41):
Good on you and you've been and joining the Olympics.
Speaker 3 (38:45):
I have I wasn't actually going to watch them, but
I have to say I've got caught up on it
and watching some of the ones. It's interesting you should
mention in Australia because I was looking at the other
day at the if you can bind the New Zealand
and Australian medals and you can bind our populations. Man,
we punch above our weights.
Speaker 2 (38:58):
Ohs and queens of the world. Yeah, and we got totally.
I think we've got.
Speaker 3 (39:02):
So far ahead of most of the rest of the
world in terms on a pick but a basis that
it's not funny.
Speaker 2 (39:06):
Yeah, good stuff. Hey, thanks so much for your time, mate,
and we'll look forward to next time.
Speaker 3 (39:10):
Go to the All Blacks talking later.
Speaker 2 (39:12):
Oh that's right, the All Blacks will be chatting with
what we might be chatting about that? Thanks Ashley. Right, well,
we'll be back with the parents squad us next. John
Cowen joins us, talking about how do you guide you
kids through their subject and career choices just in case
they're heading for life of poverty and misery. What does
that matter? Just personal happiness? Anyway, back soon it is
(39:32):
coming out to three minutes to five News Talks at B.
Speaker 1 (39:35):
For more from the weekend collective, listen live to News
Talks at B weekends from three pm, or follow the
podcast on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talk SEDB.
Speaker 2 (00:11):
And welcome back to the Weekend Collective. I'm Tim Beveridge.
Thanks for your company we want this is by the way,
if you missed the panel, you can go and check
it out on the Weekend Collective's podcast. Just look for
wherever you get your podcasts, and a good starting place
would be iHeartRadio, or you can just listen on demand
as well, of course. But this is the one Ruth
(00:32):
Radio show. I want your calls on eight hundred and
eighty ten and eighty text nine to nine to two
and joining me. He's he's been he's been coming on
the show for a little bit, a little while now.
He's a property commentator, investor and his name is Ashley
Church Today, Ashley, how are you going?
Speaker 3 (00:51):
I'm going good, Tim, How are you?
Speaker 2 (00:52):
Oh? Not too bad? Actually we've had I've had a
few texts about you in advance of coming on thing,
just suggesting that you actually that it was just a
stupid suggesting, given your name and your interest in property,
that maybe you could help fund the cathedral in christ Church.
But that's a very weak link to some sort of
joke that didn't happen from me. But there we go.
How are you?
Speaker 3 (01:12):
Yeah good, I'm good. I'm good. By the way, The
answer to your question about how long I have been
coming on the show is I think twenty seventeen. Wow,
it was a long time ago.
Speaker 2 (01:21):
That was back with that back with the original two Tims.
Speaker 3 (01:25):
It was. It was with Tim Robsboro and Tim Wilson.
Wilson Sorry, yes, yeah, yeah, one a hey before your
illustrious entry to the show.
Speaker 2 (01:36):
Yes, indeed, indeed, Hey, look there's a couple of there's
a big announcement for the RBNZ coming up this week
on the OCR, and I guess there'd be a lot
of people because it sort of ties into our whole
question around the equation for property investing and all that.
But let's let's kick it off with the discussion on
the OCR, which is coming this week. Inflation figures are down,
(01:59):
This is I had been talking a couple of weeks ago.
People are saying it's not traditionally the date where they
wouldnnow's to change cut in the cash rate. But simple
question for you, because it means a hell of a
lot to people who have got mortgages. Should they and
will they.
Speaker 3 (02:16):
They won't interesting the comedy about tradition, because there is
no tradition around this stuff. There's no set rules. It
depends on what's going on in the market.
Speaker 2 (02:24):
Any pattern maybe, okay, even that.
Speaker 3 (02:27):
I'd defy somebody to find any real pattern in this stuff.
He won't, and he won't for a range of reasons
that relate to wanting to make sure that he gets
that OC figure, so it gets that inflation figure under
that three percent mark for both non tradable and tradable inflation. However,
so I would be stunned if there was an announcement
that the o C. I will be catt at this
(02:49):
announcement next week, however, he will give a very dubbish
indication that it's either going to be cut later in
the year in stronger terms that he's given in the past,
or he at least going to give an indication that
the tracking is going to be down and that in
(03:09):
itself will be enough for the banks to continue dropping
mortgage interest rates. So the effect will be the same
as if he had cut the OCR.
Speaker 2 (03:15):
Because last time didn't he say that he'd thought about
even putting the rate up.
Speaker 3 (03:21):
Yes, he did. It's just a reason why. I think
there's a little bit of gainsmanship and brinksmanship that goes
on between the governor and the banks themselves. And so
the banks have had the ability and the capacity to
drop mortgage interest rates for quite some period of time.
And if you remember, around about that same time, there
was a couple of them that had actually wasn't by
a huge amount, but there was a couple of them
that had dropped some of their fixed term rates, and
(03:42):
I think that was his way of saying to them,
carry on with that, and I'll put the rates up
and basically deal to you in that way. So I
think it was basically just a little bit of game playing.
But things have moved on quite a bit since then,
and it's obvious that the economies and free fall that
were in a pretty bad way. And it's also obvious
that he has all but achieved the tag that he
(04:05):
has to, which is the getting inflation under three percent,
and so all of the conditions are right to drop it.
But as I say, won't be this announcement will probably
be the next one, but it won't matter because on
the back of what he does next week, more interest
rates will drop anyway.
Speaker 2 (04:19):
Of course, it's easy to have our reckons from the sideline,
But if you were in, if you were having a
significant say or making the decision, what do you think
should happen? What would you do?
Speaker 3 (04:33):
I'd broadly, and I hate to say this because you
know I'm not as big as supporter. Broadly, I think
he's probably doing it about right. I mean that three
percent is there for a reason, that one to three percent,
So he does have to get it back within that band.
And so the pain that we've just gone through, as
unpleasant as it was, was necessary. But equally it's time
now to do something to loosen it. The problem he's got,
(04:55):
he's damned if he does, any damned if he doesn't,
because if he did make an announcement to drop it
next week, any won't. But if he did, all that
means is at the rate at which morgage interest rates
would fall would be that much quicker. And that's the
la thing he wants to see. He wants an orderly
retreat of rates over the next twelve months, so he'll
achieve what he wants to without actually having to drop
it next week.
Speaker 2 (05:12):
I guess the worry that some economists might have and
just punters who've got their own reckons like me. Is
that it's I've always thought an analogy. In fact, it
might have somebody might have even agreed with me on
it is that it's a bit like It's not like
you're driving a sports car. It's like steering a freighter.
(05:32):
You can take your foot off the power and make
it and sort of try and put it in reverse
or slow something down. But it's one thing to exercise control.
It's another thing for the for the effects of that
exercise of control to actually have an impact. And I
worry that what he's that, you know, things are pretty
grim for businesses. I think, you know, power, the costs
(05:53):
of power and all that sort of stuff. There's a
lot of negative news out there, and you know, a
bit of a negative vibe. And I just worry that
if he doesn't make a change, it's almost keeping the
foot on for so long that you know, the foot
on the throats. Should I say that it could really
have a much more die consequence.
Speaker 3 (06:13):
That's the balancing act that he's playing at the moment. Interestingly,
there's one thing that hasn't happened yet, or certainly hasn't
happened to the degree that it needs to. And Tony
Alexander talks about this quite a lot, and this is
the where you reach a point where utility providers and
councils and basically monopoly providers absorb the cost of inflation
rather than passing it on. And you kind of have
(06:34):
to get to that point to keep to keep the
inflation rate down in a sustainable way. So the problem
we've had over the last eighteen months is some of
those providers from whom you've got to purchase their service
whether you want to or not. Councilors being a good example,
utility providers being another, have basically just said, oh, inflash
has gone up six percent, so we'll just pass it
on to the consumer. And it's really irresponsible. And Tony,
(06:55):
to his credit's been saying for about nine months. You
know that these guys have got to pull their head
and they have to do what every other business in
the country has been doing. And the risk at the
moment is that, given that hasn't happened to the degree
that it needs to, and you've got counsels going crazy
with the public checkbook, that inflation will take off again.
If we get a period of dropping interest rates so
that's what he'll be worried about at the moment. He'll
(07:17):
be concerned that if he takes his foot off the
pedal too soon, that it's going to take off the
flip side of that and you floate it. Freighter. Analogy
is a really good one because it is a freighter.
New Zealand's actually done a really good job. The gid
or the Reserve Bank's done a really good job of
guiding that freighter for you know, nihon thirty five years
since the Reserve Bank Act was enacted in eighty nine
or ninety. But this governor and the previous governor are
(07:39):
responsible for as much of the damage as they are
for the fixing of it. So the reason we're in
this position in the first place is because Or put
us here. And you know, you can argue, it's easy
to be wise in hindsight and go back retrospective and
you look at how things could have been different in
that post COVID period, But the reality remains, he took
his foot off the pedal too much. He fueled essentially
an orgy of spending and property investment over a short
(08:02):
period of time, and we're now dealing with the consequences
of that.
Speaker 2 (08:05):
Yeah, look, I don't know if anyone could argue against
Do you think all could argue against that? Do you
think if he was honest, I think he's say, yeah,
I think I might have. Think I might have, you know,
could have done better.
Speaker 3 (08:17):
I meant to put this guy in context. He had
but for the prior to coming to the Reserve Bank,
he'd been running the super Fund and I can't remember
for how many years, but he'd done a remarkably successful
job of that. You know, he'd increased that fund exponentially
over a number of years. So he came into that job,
as you know, as a golden headed boy, into a
job which I think he was completely unsuited to. And
you know, and it's not just what he's done with
(08:38):
regard to monetary policy. He's also introduced a degree of
wocism into the Reserve Bank, which is just completely inappropriate
and which has taken his eye off the ball, the
ball being the need to keep inflation under control.
Speaker 2 (08:49):
Has that to do? Did I see that there is
that to do with the makeup of the board or
something of the Reserve Bank, or the whole strange appointments
with people there, Maybe he didn't have quite the requisite
sort of monetary policy experience that you might expect.
Speaker 3 (09:04):
All of that, all of that, and if you look
at if you look at some of the nonsense that
comes out of the Reserve Bank now, and you consider
that this is the key organization in our country that
keeps monetary policy under control, you would have causes in
New Zealander to be very very afraid if this stuff
carries on because it's nonsense.
Speaker 2 (09:21):
So what does it mean for Actually, by the way,
if you're listening right now, welcome to the show. My
guest is actually Church. What should the Reserve Bank do?
It's this week when they announce any any or no
change in the o c R. How do you think
they will? What should they do?
Speaker 3 (09:37):
Say, as hard as it is to say, they should
keep it at the same level for at least another quarter,
but they should give and this is what I think
he will do, but they should give a pretty clear
stere that it's about to come down and that that
at the next the next announcement will be to indicate
that the that the OCN will be dropping, and maybe
(09:57):
even some indication of how much that drop might be.
And maybe you know, I don't expect it to go
this far, but he might an indication of what the
tragic of those drops will be. And as I said before,
just doing that, even though he doesn't drop the rate,
just doing that, you'll see mortgage interest rates drop almost
immediately on the back of that.
Speaker 2 (10:14):
How does that work for the banks if the cash
rates still where it is and they drop some of
their rates.
Speaker 3 (10:18):
Because the bank rate's only an indicator, the banks don't
have to well, when I say they don't have to
be guided by it, they kind of do have to
be guided by it because the Reserve Bank's got all
sorts of tools that it can use against the banks
if they don't comply with its wishes. But the banks aren't,
but the bank's borrowing them. The vast majority of the
bank's borrowing comes from sources other than the Reserve Bank,
and so, and they're borrowing at much cheaper levels at
(10:38):
the moment than they have otherwise been. So they're in
a position right now to actually have the capacity to
actually drop those rates by quite some significant margin. And
I think they're just waiting to do so. And you'll
see once there's sort of a clear signal they can
do that. You'll see a round of competition take place
quite quickly, but already you can see them positioning themselves
with respect to bringing those rats down. I think over
(11:02):
the last month or so, all of the key trading
have brought the rats down to some degree. It's some
quite significantly, and you'll see that continue.
Speaker 2 (11:09):
So at what point as rhetoric, So rhetoric is enough
for them to drop their rates?
Speaker 3 (11:14):
Yes, it is.
Speaker 2 (11:15):
Yeah, that's interesting because funny enough, I've got my mortgages
coming up, and like many New Zealanders, there's a lot
of people who are refixing. I've always gone for the
six month period, which hasn't really bitten me too badly,
but there's no way I'm always as soon as I
see really much cheaper long long distance rates, long term rates,
I become very very suspicious.
Speaker 3 (11:37):
That's the point I was just going to make. So
the reason the banks do that, and you'll see at
the moment you can get sort of anything over about
two or three years for five point nine to nine,
which is a good percentage point below some of the
sort of six months and twelve month rates. And you're
absolutely right. The reason they're doing that is because they
don't think in twelve months or eighteen months time that
rats are going to be at five point nine to nine.
They think they're going to be even lower than that,
So they're looking to lock in whatever suckers might be
(11:59):
prepared to actually to back those numbers in the meantime.
So as you say, yeah, when you see those numbers
coming down over the longer term, it's a pretty clear
sign that the banks are looking to drop their own
rats pretty quickly.
Speaker 2 (12:12):
Okay, cool, right, we want your calls eight hundred eighty,
ten and eighty. If you are actually someone who has
an interest in these things, which would be most New
Zealand as I would imagine, because even if you're not
a property investor or a renter or a first home buyer,
you might have savings in the bank as well, which
is not so much the property issue, but what should
the Reserve bank governor do? But more specifically, if you're
(12:34):
someone who's about to either buy a house and take
out some lending or a mortgage, or you're about to refix,
what are you betting on? What's your tactic going to be?
Because I can tell your mine is no specific financial advice,
and you'd be crazy to take it from me, but
I just give that disclaimer. I'm going to be going short,
so want your cause. Oh eight hundred eighty ten and
eighty What should the Reserve Bank Governor do this week
(12:56):
with the OCR back in the moment? It's twenty and
a half past four and welcome back to the Weekend Collective.
This is the one roof radio show. You can take
your calls on I eight hundred eighty ten and eighty
or text nine nine two. We're talking about what the
plan what the Reserve Bank Governor or the Reserve Bank
shoul announce this week with regard to the OCR and
what effect it we'll have on things? And my guest
is Ashley Church actually got another question just on the
(13:19):
way we react to news on things is part of
the consideration of the Reserve Bank governor. Like even right
now you can find headlines in the sort of property
news where there'll be a story about ours such and
such has sold so much over its value, and it
seems that the headlines deal in so much hyperbole. Is
(13:41):
that something that the Reserve Bank governor would be nervous
about because you know, a little bit of encouragement and all
of a sudden things go just potty, yes and no.
Speaker 3 (13:51):
I mean he's primarily looking at the numbers, or we
should be. But there is this general term which you
just syndicated and it sort of covers all of that,
and it's this word confidence, and it's it's a worry
that confidence will get to a point where inflation takes
off again. So there's a who little levers that he's
trying to pull. At the moment, those leavers are generally
(14:12):
working in the right direction, i e. Inflation's coming back
down into that three percent mark, but he's going to
be concerned at the idea that that confidence might get
to a point where people start to think, oh, well,
everything's okay again and start spending and going you know,
going crazy, to use a better term. So so the
stuff that you're seeing, which is very subjective and you know,
(14:35):
sort of often in the moment, I don't think he's
overly concerned about any more than he would have been
three months ago, when you know, when we were seeing
sort of talk of businesses closing or or businesses going under,
and that in itself wasn't enough to cause them to
drop the right earlier either. So it's sort of a
balance of those two things.
Speaker 2 (14:52):
Okay, let's take some calls on it. Dave, did I
you know?
Speaker 4 (14:56):
Dave?
Speaker 5 (14:58):
Yeah?
Speaker 4 (14:58):
How are you good?
Speaker 3 (15:00):
Mate?
Speaker 4 (15:01):
I wanted to get your view on the inflation numbers
because it seems to me like the when we include
the next quarter, we're going to seriously overshoot the two
percent target. If you look at the actual numbers on
the stats Statistic New Zealand website, the September quarter represents
one point eight percent of the three point three inflation
(15:25):
and if you look at the subsequent three quarters and
the trend, it seems highly unlikely we're going to have
a higher inflation figure this coming quarter than the last one,
So then we'd go under two percent.
Speaker 3 (15:41):
So yeah, what Days looking at that? Yeah? So what
Days referring to is that these figures, although they come
out quarterly, they're actually annual figures. And so what they
do is they out they're the average of the last
or this quarter plus the previous three quarters, and because
those have been going down, they keep the current rate artificient.
So what am I trying to say? The current figure
(16:03):
will be artificially higher than it might otherwise be because
it's also taken into account what the rate was in
the previous three quarters, and so Dave's right, if you
carry on at the current rate, then then you run
the risk of that rate going even lower. The one
thing that mitigates against them, and this will be the
one thing that was that was taken into account, is
the fact that there are actually two moving parts in
that inflation figure. One is the non tradable inflation figure.
(16:24):
The other ones the tradable inflation figure. The non tradable
inflation figures dropped through the The tradable inflation figure has
dropped through the floor. That's the inflation that we import
from overseas that's got dropped right down. But conversely, the
non tradable figure is still stubbornly high. And so although
his remitt your quite right, day all low, his remit
is about the average of those two and over over
(16:47):
that twelve month period, he will be concerned that non
tradable figure still being high, and he'll be wanting to
get that down as low as possible. So, while I understand,
I agree with your point, there is an argument for
what he's doing.
Speaker 2 (16:58):
Yeah, So Dave, do you do you have a worry
that basically he's keeping the foot on the throat just
for too long, and it's actually and have sort of
really die negative consequences because he hasn't been subtle enough
with that.
Speaker 4 (17:11):
Yeah exactly.
Speaker 1 (17:12):
I mean.
Speaker 4 (17:14):
When you read the economy, and I'm in business myself,
I know how difficult it is at the moment. There's
no free cash anywhere, so we're already squeezed as tight
as well, very hard. And coming back to that non
tradable inflation. So because the interest cost is the last
part of it when you look at rates and rents
and those things that are driving that non trainable for you,
(17:37):
So he can provide some relief there immediately.
Speaker 3 (17:40):
You know, you're quite right. That's a fair argument. That's
a fair argument. I mean, I accept your overall argument
that these things need to come down as quickly as possible.
I'm just I guess I'm talking about what I think he.
Speaker 2 (17:49):
Will do, and I think they'll keep it for it's
what's the quarterly inflation right now? It's it's quite low,
isn't it in New Zealand right now? Yeah? Yeah, okay, yeah,
I try and take that one. Yeah, No, I appreciate it.
Speaker 3 (18:07):
Date, Yeah, thanks, good feedback, mate.
Speaker 2 (18:11):
I mean, when you consider that I mean, I mean,
that would be a very good case for giving a
little bit of a relief, wouldn't it. But then again,
we get views from people like Brad Olsen, who we
have an a shade from time to time, said that
if if they did cut the rate, heads should roll.
So he's got quite a strong view on that too.
Speaker 3 (18:32):
Like a man with a strong opinion.
Speaker 2 (18:34):
Oh yes, we do, don't we. Actually there was another
question I had out of that, But you tell you what,
I'll save it for a second. We'll go and we'll
go to our next caller, Alan, Good afternoon, afternoon.
Speaker 6 (18:46):
Just take you off the speaker. Hypothetically, if I was
a punter with a few dollars to spare, would now
be a good time to put it away for a
year or so on a term investment.
Speaker 2 (18:58):
Without seeking specific financial advice. Actually you got to take
on that.
Speaker 3 (19:03):
Oh yeah, same as you. And I regard myself as
an expert on fixed term deposits, except to say that
unless you're talking about locking ellen about locking in a
rate right now before rates drop, my expectation would be
that if the OCA goes down, then then your fixed
ten rates will go down with it. So so over
the next twelve to eighteen months, you would expect to
see them dropping in the same way that mortgage interest
(19:25):
rats will drop. So I think what you were saying
is should should you take advantage of those rates while
they're still there? Yeah, I would. I wouldn't want to
comment on that. I don't regard myself as an expert.
Speaker 2 (19:33):
In No, we did, Alan, We did have one of
the guys from Harbor Asset Management on speaking about the
bond market, and if you want to go and check
out our podcast, there's some comments around you know that,
But it did seem that some of the conversations shifted
to maybe looking at those options as well. But there's
certainly no specific financial advice from us. Sorry, we have
(19:55):
to sit on the fence so obscurely.
Speaker 3 (19:57):
Thanks, thank you, thank you.
Speaker 2 (20:00):
Yeah, because actually there was I think it was about
a month or six weeks ago. We had a chat
with one of the guys and because the bond rates
had increases, had increased, and it was something where people
it's not so sexy, but for those who just want
cash in the bank sort of stuff, it was something
that was coming into play a bit more often. You know.
The thing that I mean earlier caller Dave, who's in
(20:21):
business and things, And this is just a general comment
sort of question to throw at you, Ashley. One of
the things that and it's not it's not particularly helpful
to dwell on it too much. But I do find
that the euphemisms that economists use kind of kind of heartless.
They talk about, oh, we have that there's going to
(20:42):
be a little bit of pain, and there's going to
be a bit of discomfort in things, and what that
pain actually looks like is people who can't make their
mortgage payments or who lose their jobs and things. And
I just wonder if there's a slight sort of disconnect
to the point that it makes it easier for them
to be a little bit harsh when maybe they should
(21:03):
consider that, you know, that the loss of livelihoods and
all that sort of stuff is a bigger deal than
just there's going to be a bit more pain.
Speaker 3 (21:13):
Yeah, I think that I agree with you. I suspect
it's probably something that happens, you know, sort of when
they come through the sort of varsity. It's that there
are acronism acronyms and things that they do. They pick
up this sort in common usage and also they use
that parlance because it's sort of generally understood by the market,
so you can, you know, multiple economists can can can
(21:34):
talk and be saying essentially the same thing. But I
agree with you when when lives are at stake and
people's personal circumstances or at sax, sometimes it comes across
as you know, a little bit not really reading the
room unfortunate.
Speaker 2 (21:48):
I mean you can understand it. They dwelled on the
individual circumstances the people that they wouldn't be able to
get out of bed and make a decision every day. Yes,
and quarterly inflation Mike producers confirm with zero point four percent,
So yeah, you know it's pretty large, is good. And
by the way, that podcast that I Fear Too was
on the twentieth of July. People want to check that out,
As with any of our podcasts, are always good to
(22:09):
listen to, but that was one specific one. Right, let's
we're going to move to extend this conversation. But I
thought just of a look at a couple of texts.
One says here we always get people who boast that
they fixed for five years on two point nine to nine.
That was from Mary who probably listened to the One
Roof pod podcast or show radio shots some stage where
we were probably saying, that's not a bad rate for
(22:31):
five years.
Speaker 3 (22:33):
So Mary, I was talking about that the other day.
It's interesting because I didn't. I mean, I, like most
people thought it was going to go even a lot
and and you know, if it had a little bit
of foresight and actually fixed at the time, and you know,
I guess sort of the idea of if only would
probably occur to a lot of people.
Speaker 2 (22:50):
But yeah, we've all got we've all got if only.
You know, for me, it's if only Hamilton. Look, let's talk.
I'm gonna put this question as a general one where
at what point does this person and says, should I
break my recently fixed mortgage rate of eighteen months at
six point eight nine to a six month at six
(23:11):
point nine to nine would I be charged to break
for if I go slightly high to get better rates
in six months time?
Speaker 3 (23:19):
That specifically, because every bank's got a different policy that
and there's several moving wheels in that. What I would
suggest is, rather than talking to the bank about that,
is talk to a mortgage broker. Go to a mortgage broker,
a reputable one, and they'll be able to get to
give you some pretty good advice and also give you
some scenarios and what the various different costs will be
(23:40):
as a result of breaking this is keeping a little
it's current rate until it expires.
Speaker 2 (23:43):
Yeah, because you can, you can jump back, and I mean,
I don't use a mortgage broker at the moment just
because our mortgage is, you know, reasly low level. In fact, actually,
of course it was the guy I've chatted to you
that you recommended, but I remember chatting with him about
it and I said, the bank's offering this, and he goes, oh, yeah,
that's pretty good. Just go with that, which was very good,
simple advice. High team. I'm a hound a second, let
(24:07):
me just clear that high collective team. I'm forty four.
I have twenty seven K and my husband and I
have no kids one hundred and fifty five combined income. Oh,
should we just give up on owning a house? But
both three generations of non high owners, both sides of
the family. Funny thing is that was something we discussed
in our meeting before the show about at what stage
(24:28):
people should give up or I would say not at
forty four.
Speaker 3 (24:34):
No definitely not at forty four. And there are other options.
I mean, we haven't got time to canvas them today,
but there are you know, one option, and I think
you and I have talked about it on the show
in the past. As I'm assuming this person's in Auckland
or Wellington or some way where housing's quite expensive, is
looking to buy an investment property and a location outside
Aukland or Wellington, so you've still got a piece of
real estate you don't necessarily live in it. I'd have
(24:56):
to go through those numbers and actually have a look
at what conceivably what they could do. But no, the
short answers don't give up. And at forty four, as
you say to them, circumstances can change substantially over a
for a short period of time, so keep pushing yes.
Speaker 2 (25:09):
And actually the reason it sounds so familiar is it's
actually a topic. The reason it is because it is
actually what we're going to be discussing with Lisa Dudson
on Smart Money tomorrow, So that Texter tune in tomorrow
because we are discussing exactly that at what point you
change your plans on whether you're going to be an
owner occupy and all that sort of thing. Yeah. Hey,
(25:30):
now what it does tie into, Ashley is the question
that I've teased a little while ago before that we
got into the one roof is the question about the
equation for investing at the moment. And there's a story
I think it's in the New Zealand Herald piece where
(25:53):
the low rates of yield are becoming you know, it's
harder and harder. You're having to subsidize the mortgage a
bit more, in other words, how much landlords have to
borrow and how much they get out of the rental,
and that the rental yield gap, apparently in this article
is about four percents, the largest in fifteen years. And
my simple question was, does the equation for property investing suck?
(26:16):
Right now? Okay, so let's just do it, but it
just unpack ittle going to unpack that unpack you.
Speaker 3 (26:22):
So the first part of this, so the article you're
talking about is written by An Gibson, and I didn't
read it because I'm not a subscriber of the Hero,
but I saw enough of the first sentence to understand
what she was talking about. So this is this is
based on and I'm not don't think Anne suffers from this,
but a lot of other people do this idea that
property investors are fat cats and making lots of money,
(26:44):
and when rents go up, you know the sort of
bathing and goat's milk, and you know, wonderful goat's milk.
The days, the days of rent covering the costs of
boning and a rental investment property, you probably have to
go back to the mid to late eighties to the
last time where that was possible. In most parts of
New Zealand, it just doesn't exist anymore. So, so property investors,
(27:06):
when they own a rental investment property, invariably subsidize that rental,
which means that the rent that comes and simply doesn't
cover the cost of the mortgage interest and the rates
and the maintenance and a whole range of other things.
So every rental property investor in New Zealand, not everyone,
but the vast majority of them are actually subsidizing their tenants.
So that's the first thing to get across. So what
(27:26):
she's talking about is the fact that that equation's got
particularly bad, certainly since two thousand and twenty two, when
the rates started going up as a result of the
two things. Actually this massive increase in mortgage interest rates
and the fact that the last government basically took away
the ability to claim interest as a tax coductable expense.
So you had this double wherem ME where it got
(27:47):
hugely expensive to own a property. So the reason that
land or you might say, why would you own a
property right now under those circumstances, And indeed, why would
you own a property at any time if you're not
making enough money on the property to actually cover the
cost of owning that property. The reason is capital growth.
So there's a truism in this country that property for
(28:08):
forty years basically doubled in value every ten years. It's
probably taking a little longer now, maybe twelve or thirteen years,
but it will still double every twelve or thirteen years.
So probably investors buy and are prepared to shell out
for the cost of owning a property to a greater
extent than they're actually earning income off that property, because
they expect that property to go up in value and
that's where they make their gain on the property over
(28:29):
the long term. And that equation is no different now.
And I think the expectation is that rates are going
to come down soon, and some of that pain will
fall away.
Speaker 2 (28:37):
It is interesting to hear you say twelve or thirteen
years because it wasn't that long ago. That not quoting
un necessarily, but it used to be eight years and
then it sort of shifted out a bit.
Speaker 3 (28:46):
But it does feel that that's not entirely true to
that's seven or eight years that you were talking about.
So in any given ten year period, property would double
in a seven or eight year period, but it would
sit flat and do nothing for two or three years,
of which three of those years it wasn't doing anything.
In the other seven it was doubling.
Speaker 2 (29:06):
Okay, yeah, that sounds like every ten or eleven years, then,
doesn't it. It's just that when it happens it, when
it starts to grow, it's an eight year cycle. It's
sort of what you're saying pretty much. Yeah, okay, yeah, yeah. Actually,
the interesting that there's an interesting tax if I was
going to be too a little bit Bofferinish on boffer
Niche on this is that if that is an interesting
(29:28):
one because if you are it's almost getting to the
stage where the inland and revenue because you know, if
you actually do buy a property, no matter how long
you keep it for if you bite with the intention
that you're that the money you make will be from
capital gain, that's actually the test for paying tax on it,
isn't it Not more?
Speaker 3 (29:47):
Not any more? It used to be. So that's why
the bright line test came in in the first place.
That's why National introduced it because prior to the bright
line test, they used to have something called the intention rule,
which I think is what you were.
Speaker 2 (29:57):
I thought it was still there regardless.
Speaker 3 (29:59):
The bright line test replaced it. So the intention rule, basically,
what used to happen was that there was no on
how long you could own a property before it was
regarded as to a point where it was regarded as
an investment property rather than a property that was bought
for capital gains purposes. And what used to happen was
the IID would sometimes do an audit and they'd trawl
back over ten or so years, and then they'd take
(30:21):
somebody to court, or they'd they'd hit them with the
capital gains tax. They and the party would take them
to court, and invariably the IID would lose because that
test was too oblique. So in twenty sixteen or seventeen
and whenever it was that national broad and national broad
in the two year bright line test, and the purpose
of that was basically to say, this is the line
(30:41):
in the sand. If you own a property for less
than two years and you sell it, then you pay
capital gains tax on it, because clearly you're not there
as an investor. You're a trader. But if you own
it for more than two years you're a property investor.
That pretty well, not pretty much. It did away with
the old intention test. That intention test has now gone.
The two year test is the only test.
Speaker 2 (30:58):
Excellent, no good stuff. Right, Let's take a moment. Will
your back if you want to give us your reckons
and what the property you know, how the equation is
working for you if you're a property investor as well,
because you are having to subsidize your investment. If you
ever borrowed a lot, buy a lot, give us a
call on eight hundred and eighty ten eighty. But also
the question of what's going to happen this week with
the OCI, what should happen and what will happen possibly
(31:22):
different things. News Talk said, be it's eighteen minutes to
five News Talk. Zi'd be with Tim Beverage. My guests
astually church. Actually, actually I've got quite a few texts
saying that the intention test is not superseded. It's still
there if you buy it. But in fact, I think
we might have been able to call on that Ashley.
But let's see where we go. Ray. Hello, Ry, I was.
Speaker 5 (31:44):
Just reading exactly ringing exactly about that. Were you not superceeded?
Speaker 6 (31:49):
Yeah?
Speaker 2 (31:50):
And how do we know it's.
Speaker 5 (31:52):
I've just gone all the way through it with a
property accountant.
Speaker 2 (31:55):
Okay. And if they said, yeah, what have they said
to you?
Speaker 5 (31:59):
They said, And if you follow them on Facebook there
property check group, you'll see them constantly saying that rule
still apply.
Speaker 3 (32:11):
So very interesting. So you know something that I don't
on that. I'm going to check into that.
Speaker 4 (32:16):
Yeah.
Speaker 5 (32:16):
I think, yeah, you speak to the guy that Smith's accountants,
But I think.
Speaker 2 (32:22):
Probably the things is that pragmat Yeah. I think if
you went to the tax department and told them that
you had bought a property with the intention of making
money out of the capital gains, even though you have
gone beyond the brik line or whatever, I think you Yeah,
that mind you, it's.
Speaker 3 (32:37):
Question Pray have to say. If that's correct, then I'm
not doubting what you say. It kind of makes a
nonsense of the bright Line test, because.
Speaker 2 (32:44):
Everyone who buys property is for capital gains the bright flippers.
Speaker 3 (32:51):
Yeah, and that was the purpose of the bright Line test.
The argument was that if you were holding a property
for more than two years and you were a trader,
you were a pretty lousy one. So and therefore you
were an investor. So if the intentional tests still apply
to me, that suggests that the bright line test actually
doesn't make any sense. So I'm going to do a
bit of research and that I appreciate you you're calling them, yeah.
Speaker 5 (33:12):
Because you'll even find in Australia the same thing occurs.
You have to say you have bordered against as a
hedge against inflation.
Speaker 3 (33:22):
Yep.
Speaker 5 (33:22):
You can't say you make you bought it intentionally to
capital gains.
Speaker 2 (33:27):
Because because in reality, unless most people buy it for
capital gains, Let's be honest, I mean everybody does. I mean,
that's it's almost the big delusion, isn't it.
Speaker 5 (33:37):
Ray, It's stupid. You know, either we have capital gains
tax or we don't.
Speaker 2 (33:44):
Yeah, well, I agree, that's agree that. I agree, Yeah,
I agree. Actually, you know what, I just the capital
the gains doesn't actually have me reaching for the smelling
salts on property because if there's still a lot of
money to be made, the fact that I have to
pay tax on it's just well, you know, I still
want to make the money. So where we go.
Speaker 3 (34:01):
You know, my view on this has always been.
Speaker 2 (34:04):
Sorry with Rayphah and then Ashley, sorry, where.
Speaker 5 (34:06):
You go as long as you're not paying it at
your marginal rate and they take into account inflation when
you purchased it, like in Australia now it used to
be that you had a base rate and then there
was an inflation bit that was added to your base rate,
you know, for how many years you sold it. But
that became too difficult. But what they did is they
(34:27):
turned around and they said that it's only fifty percent
of it is taxable as.
Speaker 2 (34:31):
A capital r just so there's no arguments about inflation, yes,
because you don't want to be.
Speaker 5 (34:35):
Taking to make it easier because the other ones had
to keep making calculations every year based on what the
percentage was for about ten years ago in the inflation
factor since.
Speaker 3 (34:46):
Then, That's what I was just going to make. I'm
just going to make the same point that Ray did.
So the fortunately it never went ahead. But the plan
that labor head was to introduce it at the marginal
text rate. But if you were going to do it,
my view has always been over got a problem with
the capital gains text provided you meet to conditions. One
of those conditions is that should only be living at
the point of sale, and the second one is it
should be universally and it should be a really low race.
(35:08):
So if you said, hey, it's a two percent capital
gains tax on everybody when you sell your property, regardless
of whether it's a private home or an investment property,
I think most Kipis might grumble, but that accepted. The
problem with what was being proposed was that it was
so draconian and it was so punitive that no sane
person could have accepted it.
Speaker 2 (35:27):
Hey, by the way, Ray, just a completely unrelated thing.
You mentioned the Australian market. There's there a little bit
of a twang there for you with an Australian accent
or what.
Speaker 3 (35:34):
I picked that up too.
Speaker 5 (35:35):
Yeah, I've been here for two years.
Speaker 2 (35:38):
Wow, Well, congratulations for hanging on to that accent.
Speaker 3 (35:42):
They go to the all blacks.
Speaker 2 (35:43):
Ray. Actually, I tell you what, people like Ray can
have a great time at the Olympics though, because Australia
do pretty well at the Olympics and then you've got
the cream on the top with the performance of our
New Zealand athletes, so she should be loving it. Hey, look,
we'll be back in just a moment. One roof of
(36:03):
Property of the Week is next ten five. Yes, welcome
back to the one roof radio show. By the way,
somebody sent me a link actually to the Land Revenue
site which does confirm that actually the bright line test
is just one way that you'll end up paying capital gains.
But if you buy it with the intention of selling
your property, it says clearly you will be up for
of course it's the big. It's the big. You'll be
up for capital at gains tax. But of course it's
(36:26):
the big sort of fib isn't it really that everyone
pretends that they're not. I'm just doing it for the
rental income. Anyway. Right now it is six and a
half minutes to five, which means it is time for
the one roof Property of the Week, which is going
to be announced in style just by me today.
Speaker 4 (36:43):
I think.
Speaker 2 (36:45):
Anyway, the wond roof Property of the Week, I think
we've sent a link to you on that, haven't we Ashley.
In fact, I've got a check of actually still there.
We've just got a couple of technical issues anyway. The
one roof property of the week which we always enjoys
it's like taking a little holiday just to go and
look at someone else's property is ten Beard Lane, b
aid in Lake Hays, Queenstown, and it's a stunning piece
(37:10):
of property. It's architectural villa set in a private location
in the hills above Lake Hays near Arrowtown. It's described
as having a timeless design, sitting on naturally in the
exquisitely landscaped contours, with established gardens and orchard and resort
like fire pit on the front lawn, solid timber floors,
Italian tiles, wooden joinery throughout. This property also comes with
(37:33):
a shared common ground with adyllic ponds, walking tracks, a
tennis court and more. And actually I can tell you
that the grounds are the first thing that stood out
to me is that just is an amazing looking property
with and the fire pit itself actually looks kind of
appealing itself anyway, and it can be yours for a
cool Well, don't take this as being you know what
(37:55):
exactly what it's going to go for, but the value
that it is estimated at on the one roof site
is three point nine million. Three point nine to five
million is the RV, but it looks like the RV
is maybe a couple of years out of date as well,
so it looks like quite an expensive property. Of course,
Queenstown property has been all all the rage, of course,
bucking all the trends, just continues to grow. Anyway, Ashley,
(38:19):
I think we've still got you there, have we certainly
we have got you there. Well, I think you've you've
got you can have another piece you could you could
contribute somewhere about be careful about your intention of buying property.
Taxman might be chasing you.
Speaker 3 (38:34):
Well, that's right, let's locked down in for a chat
at some stage when I've done a bit more research
and fascinated revelation.
Speaker 2 (38:41):
Good on you and you've been and joining the Olympics.
Speaker 3 (38:45):
I have I wasn't actually going to watch them, but
I have to say I've got caught up on it
and watching some of the ones. It's interesting you should
mention in Australia because I was looking at the other
day at the if you can bind the New Zealand
and Australian medals and you can bind our populations. Man,
we punch above our weights.
Speaker 2 (38:58):
Ohs and queens of the world. Yeah, and we got totally.
I think we've got.
Speaker 3 (39:02):
So far ahead of most of the rest of the
world in terms on a pick but a basis that
it's not funny.
Speaker 2 (39:06):
Yeah, good stuff. Hey, thanks so much for your time, mate,
and we'll look forward to next time.
Speaker 3 (39:10):
Go to the All Blacks talking later.
Speaker 2 (39:12):
Oh that's right, the All Blacks will be chatting with
what we might be chatting about that? Thanks Ashley. Right, well,
we'll be back with the parents squad us next. John
Cowen joins us, talking about how do you guide you
kids through their subject and career choices just in case
they're heading for life of poverty and misery. What does
that matter? Just personal happiness? Anyway, back soon it is
(39:32):
coming out to three minutes to five News Talks at B.
Speaker 1 (39:35):
For more from the weekend collective, listen live to News
Talks at B weekends from three pm, or follow the
podcast on iHeartRadio.
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