November 21, 2025 • 40 mins
Head of Banking and Valuation Risk at Valocity, David Grubb, joins Tim Beveridge for the OneRoof radio show.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks, EDB.
Speaker 2 (00:10):
No, No Down Again, Knockdown, Nockdowns, Drink.
Speaker 3 (00:39):
Thanks a lot for drink A long decided to drink.
Remind of the good times the song remindom of.
Speaker 2 (00:46):
The Times.
Speaker 3 (00:49):
Time, Yes, and welcome back to the show. This is
the Weekend Collective. The number is eight hundred and eighty
ten eighty. By the way, just before we just before
we look ahead, we'll get into this hour after five.
(01:09):
We're joined by Nathan Wallace. We're going to talk about
the line between join that line between family time and
friends time over the summer, but also when parents should
intervene and go as far as cutting off relationships that
they might not approve of for their children. So we'll
be talking about that on the on the Parents Squad
and that is after five. O'top it right now. This
(01:30):
is the one roof radio show where we want your
calls on eight hundred and eighty ten eighty. You can
text on nine two, nine to two. And actually we've
got we have a new guest on the show and
he is head of banking and Valuation risk at Velocity
and his name is David Grubb. And he's with us now,
(01:51):
David Gida, how are you going? That's nice Davy on
the show? Tell us what is what's what's your bag?
What do you what do you do these days? And
in terms of well, originally I.
Speaker 4 (02:02):
Was a register avad it's about ten years ago and
then I got sort of head hunted into the valuation
risk industry, which is what I've been doing now for
ten years, and that's advising the banks about valuation risk.
We provide probably eighty or ninety percent of all valuations
going through the New zealandustry industry that are going to
(02:23):
be linked on for mortgage leaning for houses, so that
all flows through our platform and we have to set
a set of rules around that.
Speaker 3 (02:29):
So you do valuations for the mortgage industry.
Speaker 4 (02:32):
So we don't do any valuations ourselves. We arrange the
whole process to de risk it for the banking sector,
so that's where we fit into the market and then
we assign it out. That's about five hundred residential values
around New Zealand and they are all registered on our
platform and we independently assign them and we do QA
(02:53):
on that process and we assist with writing rules for
the industry to make sure that we reduce fraud for
the banks and make the whole thing work. And then
we also do the automated valuation model, which is probably
nearly all the leanding that you do. If you don't
need a registered VAYUS report, we do the algorithm that
powers that for the banks for a lot of.
Speaker 3 (03:12):
The sorry that powers the algorithm that does what again, it's.
Speaker 4 (03:16):
Called an AVM, an automated valuation model, and our product
name is called an ie VL. So if you're a
broker in New Zealand, you'll be logging into our platform
and borrow money from the bank, and the bank called
leaned maybe up to about eighty percent of that value
the IVEL the ABM, and then if that doesn't work
for the particular deal, they say you need a registered
(03:37):
values report, and then they'll just log into our system
and it'll get going.
Speaker 3 (03:43):
So, who's how so registered value is report? Are they
using AI as well? There? This is AI? This is
AI territory, isn't it.
Speaker 4 (03:49):
Well, that's interesting you say that we're just rewriting the
rules at the moment. It's called the residential valuation standing
instructions is a mouthful for you and we call it
the RVSI and we just bring out a new version
of at the moment, and we're putting something in there
about AI. The idea is that, you know, I would
encourage values to use ALI to a certain extent, but
at the end of the day, they need to be
(04:11):
responsible for everything that's going into that report.
Speaker 3 (04:14):
So the algorithm, I've just got to get this right.
The algorithm's job comes before the registered value, or the
registered value uses the algorithm plus their own judgment.
Speaker 4 (04:25):
Yeah, that's that's a good question. So we power the
one roof platform. So all those numbers you see in
one roof that I love.
Speaker 3 (04:32):
The results of that algorithm is that the one where
it says this is what the lower the asking price is,
the high the low and expected value. That's you guys, Yeah,
that's us.
Speaker 4 (04:40):
But what we do is we don't give you the
exact number we give the banks because obviously they pay
handsomely for that, and and we give you a number
that you make a range, and so it gives people
an idea. It's pretty close, but it's never exactly the
same answer.
Speaker 3 (04:56):
That is a fun fact. So the banks pay a
lot of money to get an answer, which is so
for properties were let's say we're talking in the ballpark
of a million dollars or something, the number the bank
would get would be would be I don't know how
you do do it statistically degrees?
Speaker 4 (05:16):
It's definitely statistically so.
Speaker 3 (05:18):
But I mean within what I mean, how many thousands
does it narrowed down to? Well, we read you say
it's worth one million, two hundred thousand and sixty bucks.
Speaker 4 (05:28):
Okay, So I don't think the bank's worried about sixty dollars.
But what we do is we do have a figure
that comes off our algorithm, which is extremely complex, and
it's measured by the banks to make sure they're happy
with the accuracy. And what it comes with is a
measure of accuracy that we provide them as well. It's
called a forecast standard deviation, and we give them that
as well, and then they determine how good they think
(05:50):
that is, and then if it meets your criteria, they'll
use it, and if it doesn't, they'll say, we need
to escalate this to getting a vor on site, and
that's where they jump on the platform and order it
on any property in New Zealand, and.
Speaker 3 (06:03):
Hey, prestat so why would it not meet that what
they want? Well, if they're getting an answer, how do
they know the answer is not what they want?
Speaker 4 (06:10):
Yeah, that's that's a good question. So the in New Zealand,
the Reserve Bank has restrictions on what's called lvrs learned.
Speaker 3 (06:17):
To v ratios.
Speaker 4 (06:19):
So if you want to borrow nine hundred thousand against
that million dollar property, that will probably exceed the bank's
appetite for using an AVM, So they might go to
seventy percent, they might go to eighty percent of the number.
And if you're high borrowing on that then then they say,
(06:39):
well we need to get a register's various report for
two reasons. One is the number might come out different.
But the second one is that they might go to
a higher LVR on a registav's report because obviously they
go to the property.
Speaker 3 (06:50):
They have the confident that it is worth this and
if things turn to custom we know that this is
the money we can get back off the property and
our money, our loan is safe.
Speaker 4 (07:00):
Yeah, well that's the idea.
Speaker 3 (07:01):
And I mean you looked at me as if I'd
said something either smart or stupid. I can't work it up.
Speaker 4 (07:08):
Well, we have this FSD, so we forecast standard deviation,
so we we go, we go, it's we think it's
accurate to within ten percent, or we think it's acurate
within six per cent, or we think is accurate within
twenty percent. So our system measures how good we think
that number is. And then so the banks have an
appetite on FSD as well as that LVR ratio, so
(07:31):
that's where it kicks in.
Speaker 3 (07:32):
And the FSD sorry, the.
Speaker 4 (07:33):
Forecast standard deviation, So that's our statistical measure of accuracy
expected accuracy. And the banks absolutely they take all the
sales in New Zealand, they take all our eyebells, and
they measure how good we wear and how good are
you really good?
Speaker 3 (07:48):
Okay you can have a brag. So so that how
do they how do they measure? Is it once the
property sells or something when they have to absolutely go
where you're at?
Speaker 4 (07:57):
They do blind testing. We give them the a VM
or the AVM of every proper, every residual property.
Speaker 3 (08:03):
I'm going to get used to these automated valuation model.
Hang on, here we go AVM Automate evaluation model. Yep,
that's the algorithm.
Speaker 4 (08:14):
That's the algorithm, right, yep. And we give them an
AVM of every residential property in New Zealand that we
have it for them, like over ninety eight percent available
for residential houses, and they hold that and then all
the sales come in over the next few months and
then they see how good we were okay, and then
we go and then they go, we love doing business.
Speaker 3 (08:33):
With you, and can you tell me how good you were?
Speaker 4 (08:36):
Really good?
Speaker 3 (08:39):
We're really good, okay, So no politicians who tell you
they're really good and they might not be.
Speaker 2 (08:45):
So.
Speaker 4 (08:45):
Forecast standard deviation, well you shouldn't be getting two technical here.
But forecast standard deviation is if there's stand deviations around
about sixty eight percent, So if we if we if
we do a measure on that, then we're expected to
be within the number we gave sixty eight percent of
the time. And that's and that's how we adjust the
FIST to meet that metric.
Speaker 3 (09:03):
Within what range. Say on them within a million dollar property,
say you've valued something at a million, and I keep
saying a million, but just because it's a nice round number.
Speaker 4 (09:11):
So if it's a million dollars and we say that
the FSD FORECAS standard deviation is going to be ten
percent on this property, we would expect the value to
be within ten percent sixty eight percent of the time.
Speaker 3 (09:24):
Okay, how often is it much different to that? And
for what reasons does it go muche? For what reasons
does it vary in a greater degree?
Speaker 4 (09:36):
So it tapes off quite fast. So we don't have
a lot of assessments with an estimate over fifteen percent.
So nearly all our assessments are clustered around eight to
twelve percent sort of thing. And so it's just it's
what's called a distribution curve, and so not many properties
go over that fifteen percent layer. Okay, So your broker
(09:57):
will discuss this with you. They'll say, oh, this works
for us, or it doesn't work for us, and then
they'll go off to the bank and the bank will
give them a decision on on the outcome they want.
Speaker 3 (10:06):
Okay, So what's okay? So we're basically talking about a
model that predicts a value for things that you do
through an algorithm and you're very good at doing it.
What extra work does a registered value? So it goes off,
We've got this number of the bank's not happy, and
so they're looking for something else. What extra work does
a registered valuer do to give the bank that extra confidence.
(10:28):
What are they looking at?
Speaker 4 (10:29):
So the first thing they do is they go to
the property. Yeah, that's really important.
Speaker 3 (10:32):
That's generally pretty important.
Speaker 4 (10:33):
That's pretty important, and we have absolute strong rules around that.
The values must go inside the house and have a look,
and they do an assessment. They measure the house up
and particularly say you've done some extra improvements on your
house and spent quite a bit of money on it,
but you hadn't got the council back to update your
(10:55):
rating value. Then what they might do is they go, well,
my house is I think my house is better than
that million dollars because I've just spent turn one thousand
dollars doing it up inside, and no one knows that really,
So the valuer will go around and see that and
they go, well, ye, we think it's worth one point
two or one point one or whatever they as it at.
Speaker 3 (11:12):
Okay, are there particular things that the model can't really
take into account? I mean I come at it from
a layperson's point of view, and as I've seen a
million times in the show, I'll ask the dumb questions.
But for instance, I mean just the condition of a
place inside would have an impact on its value. And
that's where that's something that lies outside of the automated
(11:35):
sort of process, isn't it. That's when a value would
come in and go okay, well it's got no jib
on the walls.
Speaker 4 (11:42):
Absolutely. If you're down where peat wolf Camp lives, he
always says, I live in Damnport. What you used to
get in Demport a lot is people would buy a
house and dot the outside and do the inside last,
or they do it the inside and do the outside last,
so the computer can't see the inside of a house.
Speaker 3 (11:57):
So how does the average punter who is you know,
especially buyers, I guess, but to some extent sell because
you want to know you get in the right price,
and you've got a real estate agent who's doing their job.
But how does how does what is the best way
for buyers if they're looking at a range of property,
because not everyone can afford to get registered valuations done
(12:17):
here and there. If they want to be confident, what
how confident can they be on something like the one
roof site Because you did say that, you know, you
give a much more precise sort of valuation to be
in zed. But I'm thinking that the one roof one
would have to be fairly close to me.
Speaker 4 (12:36):
Sorry I don't name clients.
Speaker 3 (12:37):
Oh not be in Zed. I just thought, oh yeah, sorry,
it's just off the top of my head. But two
a bank, absolutely, So I was thinking be in Z
because they were this is complete non sequitive because they
were the bank we were talking about in our panel
who sponsored the breakers. So they's just stuck on my head. Yes, okay,
carry on. What was my question?
Speaker 5 (12:58):
So?
Speaker 3 (12:58):
Yeah, I go to the one roof site and I'm
looking at a property and it says estimated value range
between such and such. What other homework do I need
to do to get more confident with that? Do you
reckon because your background years ago is as a value
or isn't it?
Speaker 1 (13:17):
So?
Speaker 4 (13:17):
I think it's the startup for twenty So I think
it's great if you see something online, if you see
something on one roof and you go, oh, man, that
house looks great. I mean we're going to talk about
the property of the week later and you go, oh,
that looks that looks great. Then and probably that one
might not be one necessary that fits into this criteria
(13:37):
because it really is quite unique.
Speaker 3 (13:39):
Yeah. In fact, you should stick around for the property
of the week, because I don't want to sidetrack myself.
But I did look at the value for that and
thought that is well under what it's going to get,
isn't it.
Speaker 4 (13:50):
So our model stops at a certain level. Yeah, because
we would say we use complexity approaches to dismissing a
certain amount of property. So we sort of say, if
it's an outlier property, just say you're in an area
of hunts screamet of houses and you've got a six
hundred screamet a house, or you're in an area of
five hundred thousand dollars and you've got a house it's
(14:10):
worth about three million dollars. It's an outlier, so you're
much better to have a registered value or look at that.
The AVM is great for standard property.
Speaker 3 (14:18):
Does it use just existing property data within a certain
area to work out the value or does it actually
how sophisticated is it when it comes to working out
the price if such for this particular property we'll be
talking about later on coastal aspect outlook, you know, in
the middle of the high record goal.
Speaker 4 (14:37):
So we wouldn't pretend the AVM will work for the
property of the week. But at the end of the day.
It works for like your million dollar houses in Augland
or you two million dollar houses. That's that's what it's
great at.
Speaker 3 (14:46):
Does it know? Does it know things like, oh, this
proproperty might be a bit more sought after because it
just has a little bit more elevation. Does it take
things like that aspect direction north south facing all that
sort of thing, as opposed to the next door neighbor's house,
which might I don't know, have the shade of a
(15:07):
rather large tree, sort of either doing it a favor
or otherwise.
Speaker 4 (15:10):
Yeah, I mean, like that's that's a fair question. But
just keep telling yourself that the computer doesn't go to
the property, so I can't see that tree. But it does.
What it does is it brings in a lot of
information from the market, and it bundles it all up
and then analyzes it and comes up with a number.
And obviously that is driven by sales. So if you've
(15:32):
got a street with the call homogeneous properties or similar properties,
if you've got a street with similar properties and they're
all five hundred thousand dollars, then it'll see the house
down the road sold for five point fifty and gets
an idea of the market starting to lift, and therefore
the algorithm adjusts with the market. So we bring out
a new number every week, and we have all sorts
of complex, inder seasoned things that let us know how
(15:55):
the market's changing on a week by week basis.
Speaker 3 (15:58):
Okay, cost this list of this is fascinating if you've
got some cause and actually how do you go about?
I mean, the simple question is how much attention do
you pay? Two figures that are online which have been
worked out via various algorithms, the rhythms including the work
that the work that David does, I mean how much?
And what are the things where you look at something
which will either add significantly significantly to the property expectations
(16:24):
that might make you think, okay, if we're going to
get a bargain because we work out that it's going
to be worth more for this reason. So how do
you work out the value of the property that you
look at? If you've got any questions for David, he's
head of banking and valuation risk at Velocity. And just
to clarify that, when you can tell me if I'm wrong,
David valuation risk meaning that he assists banks in working
(16:47):
out how safe the loan their lending is based on
getting the right valuation for a property. Is that the
right way to sort of put it before we go
to the brake?
Speaker 4 (16:56):
So I advise on property risk ready still at the
valuation sector.
Speaker 3 (17:00):
Okay, so how do you describe it again? I'll come
back after the break. You can get David a call
on eight hundred and eighty ten eighty or me. I
won't have much to say so much in terms of
my advice. It's twenty four past four News Talks EDB
News Talks ed B, Tim Beverage, and my guest is
David Grubb. He is a head of valuation risk at
Velocity and Banking as well giving us some good information. Actually,
(17:24):
it's quite fascinating about that whole one roof thing because
I'm looking forward to seeing what we reckon that that
property might be worth. It's our property of the week
later on. But taking your calls on eight hundred eighty
ten eighty now just on the market itself, So how
much when it comes to trends and what the market's
(17:47):
been doing we do? I mean, it's an ever going,
ongoing conversation around residential property and the value of it
and where it's you know, the headlines will pick up
a couple of blips and say, oh, the market's turned
if everything's looking wonderful. What's your take on where the
residential market is at the moment.
Speaker 4 (18:06):
Well, I think what we've possibly done is gone past
the bottom of the market. We can see it in
our data that looks like the thirty. First of all,
this could be the bottom. It's been threatening for the
last two years to be at the bottom. Then it's
gone up a bit. People have got enthusiastic about interest
rates coming down, and then they've realized, actually, they're not
back to a level that makes them comfortable. Some people
(18:28):
obviously overextended. When the interest rates were cheap, they went
out and border holiday home. They went in border a
new OUDI are six, they went and they went and
bought a boat, and they increased the size of their
mortgage by maybe in some cases an a million dollars.
And then the interest rates doubled and something had to give.
Speaker 3 (18:48):
I'm always amazed that people see that their house has
gone up in value so they go and borrow against
it for toys. I mean, I know this is not
quite your bag, but is it? How common is it that?
I mean, I don't know how much you can track
that behavior, but do you know through what the banks
would indicate or your clients would indicate in terms of
our people are borrowing more because they're just feeling that
(19:09):
they've got more money.
Speaker 4 (19:11):
I think if you've got a certain amount of money
to spend, that you feel is that you've got leftover
a month. If such a thing as left over a month,
but you know you might you might have, say two
thousand dollars a month you want to put towards your mortgage,
and that might get you into a seven hundred and
fifty thousand dollar house with your deposit, or coming out
of an old house another house into that. But then
(19:33):
when the mortgage rates increase, you can suddenly borrow a
whole lot more money for that same outgoing. So you
feel wealthier because for no change in your lifestyle, suddenly
you've got a new car. And that's what happened after COVID.
Speaker 3 (19:47):
Do you think that behavior would be the same again
if we suddenly had really cheap money. Do you think
people have been once pitt and twice shy?
Speaker 4 (19:53):
None that looks some people will, of course, But I
think I think the psyche of the market. As people
walk into the bank and they say how much money
can I borrow to buy a house? And the bank
runs all the numbers and they say, you can buy this,
you can spend this amount of money. Now, the banks
aren't really supposed to sort of talk to you about
the maximum you can borrow, but it's inevitably the question
(20:14):
they ask their broker.
Speaker 3 (20:15):
Their comes up. I mean, everyone wants to know what's
the max and what they can borrow. I mean, whoever
brings the conversation up.
Speaker 4 (20:22):
Well, he's you think you're going out to buy a
million dollar house. We talked before about that. You see
it on one roof, get you get a feel for
where it's at. But of course, as soon as you
start looking, the one that's one point one and the
one that's one point two just looks that much better.
And so then you start to go, oh, maybe I
can borrow a bit more money. I'll go and talk
to the bank on Monday and just see how far
(20:43):
I can go to my auction.
Speaker 3 (20:44):
That's an interesting question actually, as to do you think
people's that view of the way they the the way
people view a property's value, is it influenced by what
they are told its value is in terms of how
much they like it. Do people go to a property
and they're told, look all this one, it's one point
(21:05):
three more and they go, oh, the rush, this is nice.
Are they affected by that sort of information or do
you think they still walk in and go, what one
point three for this dive?
Speaker 4 (21:15):
So the way they judge that one point three for
this dive is that that they have Most people, when
they're in the market, they look around, they miss out
on a few properties. They find out what those properties
actually did sell for, which might have been out of
their reach, and so you know, they might go to property,
think they're going to pay about a million dollars, it
goes to auction, it goes for one point one five
or something, and it was just a bit out of
(21:36):
their reach. But now they get a benchmark in their
mind what that was, and they very quickly become quasi
valuers by being able to say, those five properties sold
for this price, and the one that i'm looking at
today is better or worse than those properties. So the
market doesn't know that's what it's doing, but that's effectively
what the value is analyze, is that that very point
(21:59):
how much better or worse one property is from another.
Speaker 5 (22:01):
So the.
Speaker 4 (22:03):
People buying a house, they don't do the analysis, They
just get that feeling. But you'd be amazed how quickly
they dial into what an area is priced at if
they're in the market for just a few weeks.
Speaker 3 (22:15):
So how so you'd say, if you are someone who's
looking at getting into the market, a first time buyer,
that really, if you really are serious about buying and
you start looking at properties you want, then you will
quickly get an idea about what a market, what a
place is worth. You can start to trust sort of
your own judgment in the end, I guess we're talking
about that.
Speaker 4 (22:33):
We you know, if you're looking for a six hundred
and fifty seven hundred thousand dollars terrace townhouse in Auckland,
you'll become an expert within twenty five thousand dollars on
that property within days, because you go to this ven door,
you see what they're offering in that location, and you
have to adjust in your mind. You know, you might
adjust slightly between say Hobbsonville Point and West Skate and
(22:54):
you might go in your mind, well, I think Westgate's
fifty thousand dollars less than Hobbsonville points. So you adjust
that so you get the same house in the same
in two different locations. You go, well, that's seven fifty,
that's seven hundred. I understand the difference between those two
locations straight away. My head is fifty thousand. Now I'm
looking at a different house and I think it's got
the extra toilet downstairs, and I'll pay ten grand for that.
And I'm sure uncle, you know the answer.
Speaker 3 (23:15):
Actually how much? Ah? How easy is it to quantify
things like an extra toilet or an office which really
maybe that is a bedroom. I mean, just attribute what
are the attributes of a place? And how do you
work out how much that adds aside from the what
the norm is in that area.
Speaker 4 (23:36):
Look, the market does find its levels pretty quickly. So
you know, when you go out to these terracetownhouse areas,
you'll have two bedroom houses, three bedroom houses, four bedroom houses,
and when does the second bathroom kicking? And things like that.
But you'll quickly you'll again you'll quickly know within twenty
five maybe fifty thousand dollars, but very quickly the difference
between them, because you'll go, look, that three bedroom one
(23:58):
is seventy five thousand dollars more, it's out of my reach.
So I'm buying the two better this time around.
Speaker 3 (24:04):
And you've worked at the two better is going to
be worth I mean how much? I mean, I'm dying
to ask you how much an extra bedroom makes. But
of course it depends whether you're in roomy era or
not room raor.
Speaker 4 (24:14):
Look, I don't think I don't think it's quite as
simple as it it probably is in the terrace townhousing
that you know, a two bedroom might be say seven
to fifty and a three bedroom might be eight twenty five,
so it could be seventy five thousand. But you get
a bit of extra floy are at the same time,
so your living area might be a bit bigger, you
might get an extra bathroom. So there's a few other
factors that come in. So I wouldn't say a bedroom
is worth X dollars. But you will also get properties
(24:36):
that have three bedrooms in the pokey or two generous bedrooms,
and you go, you know what, there's only you know,
a young couple these days buying a house using kiwisaver.
That's just a fantastic entry into into real estate and
New Zealand. It's Kiwi Saver because it get it gets
under thirty year olds. My two daughters under thirty bought
brand new houses because of Keysaver. YEP.
Speaker 3 (24:57):
It's funny because on the money how we've had people
express the opinions that and there is within the political
realm there's the opinion and I don't want to get
too sidetracked by this that that's a bad idea for
people to break into their retirement savings. But of course,
if you're doing it in your twenties and getting into
a house, then probably not a bad idea, really is
First if you're using it when you're fifty to get
(25:17):
into your first house, that might be more problematic.
Speaker 4 (25:20):
Yeah, but it's probably still a form of saving, isn't it.
You're putting it into that real estate, so the money
is still there. You haven't lost that money. So you know,
people at the age of thirty getting into a house
twenty five years later it's paid off. They get into
their mid fifties, their kids have left home, jump on
a cruise ship, jump on a plane.
Speaker 3 (25:38):
Well and hopefully not load up the mortgage.
Speaker 4 (25:42):
Well you know, at that age you've already paid off
your house, okay, and don't get me wrong. By now, Tim,
you've already moved up the ladder a bit. But you
know this is for working faces. There's plenty of them.
And by then you've bought your investment property, and that's
where you actually get some wealth out of your investment property,
because that's what's called a leveraged investment.
Speaker 3 (26:03):
So getting back to that, you know the cycle of
the market. You were saying the thirty first of August,
I mean, that's just that's very accurate, Magion. If it
was literally the thirty first of August, but you picked
the end of that month, you're saying that you reckon
that the bottom of the market was then. And is
that because all the data is pointing to a slide upwards.
(26:25):
You can look literally look at a curve on the
graph and absolutely that's the point.
Speaker 4 (26:29):
Yep, it's amazing like that. So we actually saw the
market peaking in about November twenty one, and we set
to the bank straight away. Look, we can see it
in our data that it's peaking now, but at the
end of the day overall, it peaked in about February
twenty two, but we could already see it changing in November,
so we gave the banks an alert that we think
that was.
Speaker 3 (26:48):
It because one of the questions, and we might dig
into this, we might take the break, actually, But so
I feel when I watch commentary on this, and I
actually I don't know how much you would watch commentary
because is it relevant to your job at all when
you just want to try and work out values. But
you do notice in the real estate pages that a
market starts to turn and you start to see stories
(27:10):
where you know, real stations at state agents will put
out stories like, oh, this has been this big jump
here and a property sold for this much over its
value and it's all gained trying to get that momentum
that the market's moving.
Speaker 4 (27:21):
But how.
Speaker 3 (27:25):
The question that I want to and we'll take the
break now, is there's this implication that in many people's
minds that the boom times we've seen before will happen
again once we get past that turn, And I just
I want to dig into it after the break as
to whether the past performance that we've seen with things
going crazy are what we can expect in the future.
(27:46):
Because they say it famously, don't they. In the investment world,
past performance is no guarantee to see your future performance.
What is that like in the real estate market. You
can give us your reckons, by the way, on eight
hundred and eighty ten eighty text nine to nine two.
My guest is David Grubb. He is head of banking
and evaluation risk at Velocity. We'll be back in just
a moment news Talks. It'd be it's twenty two minutes
(28:07):
to five news Talks. He'd be welcome back. This is
one roof Radio show. We have a new guest on
the Show's David Grub. He's head of banking and evaluation
risk at Velocity. And one of the things, of course
at Velocity they do is they provide the price estimates.
If you are going to the one roof radio one
roof radio, if you're going to the one roof site
and you get a property estimate, then that information has
come through the algorithms and the work generated by David
(28:30):
and his team. Is it a team of people, David, You.
Speaker 4 (28:32):
See we've got clever, much more clever people than me
that they actually do their algorithm.
Speaker 3 (28:37):
Yeah. How actually, just before we get into that question,
I said we were going to get into straight away
where what is the future of AI with you know,
valuations because AI is never going to visit a property
like a value like a registered property valuer is but
does it make is it going to make their jobs easier?
Or how's how's it going to work?
Speaker 4 (28:57):
So my take on AI is there's no such thing
as all right, okay, it's machine learning. So in other words,
it only learns off what the information gets put in,
and it's just they've got way way better at analyzing it.
There's new models that now analyze that data, which means
we now have these large language models that feed it
back and you have a conversation chat GPT, but also
(29:18):
with our AVM model. The way it used to work,
say fifteen years ago, the way the industry used to work,
they'd use a thing called linear aggression. So it was
a mathematical statistical thing that we learned at university, and
then they had multiple linear aggresson where you put all
these different factors in. But now they do what I
would probably describe as spooky maths.
Speaker 3 (29:37):
So it's not quite a sellable calling it spooky maths.
I'm going to go on to chat GP spooky maths.
Speaker 4 (29:43):
Yeah, So the way it works is so NIEWA, which
is now called Earth sciences. They've invested heavily in new computers,
like they're calling it a supercomputer, okay, and they run
special models on that to work out the weather and
the forecasts of the weather. And if you think about that,
what that's doing is pulling through a huge amount of information,
(30:06):
more than they've ever been able to pull through before,
which is what we're seeing with AI. It can now
assemble a lot more information on the fly, trillions of
things a second. And that's what we do. We now
use a fancy algorithm and behind it to run the data.
And that's why it gets better and better because we
can now throw much more information into it and it
(30:28):
can consume.
Speaker 3 (30:28):
It and spit out a conclusion for you. Yeah, and
then that gets measured spooky moths. I think I prefer
that in a way, AI is basically just a brand
to make it appealing to people like or anyone like me, thinking, oh,
this thing's really smart, where in fact it's just a
very very complex and highly powered algorithm that can analyze
and spit out data. But AI is the way we go,
(30:50):
Oh you know, it's to be able to think for
itself soon.
Speaker 4 (30:53):
Well, I think the thing about ALI is it can
think so much faster than we ever can, and can
assemble this data. I mean you ask you are some
really complex questions of chat GPT. It goes away to
ten websites, It assembles all the information and brings it
back in three seconds.
Speaker 3 (31:06):
Sometimes does get it wrong. I do like it when
you go, hang on a minute, you just mentioned this
person's NA Where did that come from? They go, you're right, term,
I got it wrong. Let me do that again. Let's
take some calls.
Speaker 5 (31:15):
Guy, hello, right, could ill doing? We've got property that
then we purchased in twenty eighteen, and I'm just listening
to your chatting about the automated valuation registered valuation. We're
looking to keep the property but rent it out as
(31:37):
the rental income, and the banks come back and I
think they've given us automated valuation. Is the question is
is it worth? We've done a lot of improvements like
the roof of the kitchen, the bathroom, garage and stuff
like that. Can we get our registered valuation and take
(31:58):
that to the bank and say, hey, assumingutes, assuming the
registered valuation is more than what they're yeah, the property
worth and then we get more equity out of it.
If we're refinancing the montage. Is that something you could
do that is a bit of a risk.
Speaker 4 (32:14):
There, I'll just go straight to Dable with that, I
would imagine, yes, David, Yeah, thanks guy. So, I think
the thing about the if you're not happy with the
number that you're seeing the AVM more the number of
the bank gives you than to how they got to it.
But they give you that number and you go, yeah,
I think it's worth it and more than a million
dollars because of all the things you said. You've done
(32:35):
all this work and and the banks will always allow
you to get a registered vida's report if you're unhappy
with the AVM. So it's they don't say no, that's it.
They absolutely will always allow it. But just to just
to perhaps correct you slightly on that guy, the banks
don't encourage you to go and get your own report
these days, they'd ask you to go and see your
mortgage advisor or come and see the bank directly, and
(32:58):
they will order it on the system and then it'll
be independently allocated out and that makes sure that the
bank is happy with there was the independent allocation of
that valuation report. That is that So don't. You don't
bring them into the bank anymore.
Speaker 3 (33:14):
Really, so guy wouldn't go and get his own valuation
when he asked the bank to who pays so yes,
because in other words, like the bank might not be
sure if guys value are as a friend who's doing
him a favor and pumping an extra fifty grand on
the on the title, well we.
Speaker 4 (33:30):
Can be anywhere near that, but no.
Speaker 3 (33:32):
But if we if we be crude about it, it's.
Speaker 4 (33:34):
Absolutely it's to ensure there's full independence in the process.
And and actually the banks are controlled from Australia with
rules I think called APS two twenty and that sets
out rules of the independence. So that's what they really
want to see. So the banks in New Zealand have
all adopted this need for independence in the process. And
(33:55):
and then that goes through quality and things like that
as well.
Speaker 3 (33:58):
So Guy.
Speaker 5 (34:00):
There'd be no appointment. Do we need off our own
back goes to the bank would be able to accept
it if you know what I mean?
Speaker 4 (34:07):
They might they might be able to accept it, but
they might you just might need to jump through more
hoops in the bare delay and things like that. So
that nearly all the bank lending that's based on register
these reports is allocated through through the Velocity system if
you like, and and they come through to the bank
and then that's delivered digitally, so there's no chance of
(34:30):
anyone getting hold of the PDF and changing it and things.
So it's all about reducing risk. And that's where the
valuation risk comes in. Is that that I develop processes
to reduce risk in the process.
Speaker 3 (34:41):
Okay, so just in brief, a guy who's wants who
thinks the property is worth more than he's been told
by the bank, can what does he say to the bank,
I think you're wrong and I want you to go
and get another valuation on this or how does it work?
Speaker 4 (34:55):
Yeah, so the conversation would be if if you can't
raise enough money from the AVM, I mean, you shouldn't
go off and get a report just the back of it,
you know, Like you have the conversation with the bank,
the bank goes, look, you know you haven't got enough equity,
and you're going, well, I've spent a couple hundred thousand,
That's what I said at the beginning, that you've spent
some money on the house. You think it is better
than that. And remember before I said about people who
(35:16):
are actually quite experts on what property is worth, and
they're looking people with their own houses probably know within
one hundred thousand anyway of what their house is probably worth.
And so you know, if you're active in the industry
as far as talking about real estate, you're going to
have an opinion. And if you if you materially think
that the bank's value internal on the system is not right,
(35:40):
they will say, hey, do you want us to arrange
your registered VIAS report and they'll just tap into the system.
You can email yes, you've got to pay for it.
Speaker 3 (35:48):
So guy, you need to have that conversation with the
bank now, not your own.
Speaker 4 (35:51):
Value or your mortgage advisor or your mortgage advisor.
Speaker 3 (35:53):
Is that helpful?
Speaker 5 (35:54):
Yep, good on that. Excellent, Thank you mate.
Speaker 3 (35:58):
Actually, of course we have not much time yet. But hey,
just from what you've observed I mentioned about the past performance,
is it a predictor of future performance? What's your I mean?
Is it? Have you seen patents in behalf in the
past where once a market will go into a bit
of a slump and then it'll slowly wind up and
after three or four years it'll look like there's this
(36:19):
sort of growth and then after so many years it'll
have doubled. What are you what's your rough take? Without
any We're not going to hold you to it. There's
no specialized financial advice here, is past performance any good
in this market once it's now that we think it's
turned around.
Speaker 4 (36:33):
So twenty ten to twenty twenty, we saw about a
six and a half percent peranum increase in v of
properties over that time. Since twenty eighteen, going through this
whole COVID up forty down fifteen, you know, and all
the rest of it, and then flat for the last
two years that's been about four and a half percent,
four point four percent, So we're a bit behind, you know,
(36:53):
what those long run figures were. But what's happening at
the moment is that the commitment to your mortgage is
still above that long run number. So people who are
committing about thirty percent towards their mortgage previously and at
the moment it's sitting between about thirty two and thirty
four percent. So we're above the line. And that's why
I think the market hasn't really got going because people
are still been hurting. We're on the way down off
(37:15):
the hurt and if you think about the people that
took out they have one year fixed mortgages, they're still waiting.
They took them out of March this year, they're still
waiting to March next year until they get a one
percent relief. And that's going to be a huge relief
to them. So we haven't got back to that equilibrium.
But the equilibrium is not a flat market. Equilibrium is
a gradually gaining market. And you know at the end
(37:38):
of the day that you asked Sharon Zola from AINSI,
I've heard her say some property inflation is a good
thing and Mum and Dad will definitely when they buy
that investment property. That's what they need, one hundred percent finance.
Every dollar that goes up is money in their bank
for no out.
Speaker 3 (37:52):
They okay, hey, look we're going to take a quick break. Orse.
So that Property of the Week is next and it
is a doozy and I'm not sure David will want
to comment on the value given his role, but I'll
have I'll have them a shot at it. Anyway. This
is the weekend Collective. It is nine minutes to five
news Talks.
Speaker 1 (38:10):
Beak the one roof Property of the Week on the
Weekend Collective.
Speaker 3 (38:16):
Yes, the one roof property of the week. As we've
mentioned with my guest to David Grebb, it's a property
on wy Hecke Island. It is forty Rothschild that's roths
Child Terrace, wy Hecke Island. It's four bedrooms, two bathrooms.
The house is just under two hundred square meters almost
five hectares of land. It was built in nineteen fifteen
(38:40):
and it's described as one of the most significant private
coastal estates in New Zealand and it's a rare sanctuary.
It offers total privacy, privacy, breathtaking scale and unrivaled access
to one of the most beautiful coastal environments in the
Hiraky golf Hodaki should I say, and I would say that,
(39:00):
you know, normally real estate blurbs can sort of gild
the lily a little bit. I would have thought that
sentence is a pretty good description. It is a gorgeous
looking property. You can walk directly from your own shoreline
to your private island which you've got there as well.
The estate also include award winning wines, a beautifully restored
(39:20):
cari villa, manicured grounds that capture the light history and
romance of this remarkable location. It is quite and it's
described as properties of this caliber are almost never offered
to the public. And I think, here's the valuation if
I always have them a rule of thumb when I
look at these things and you sort of think, oh God,
that's going to be out of most people's reach. The
(39:42):
estimate on the one roof site is five point nine
to four million, which feels light to the right bib.
But it's I mean, the description of it is pretty David.
The description of it's it's not really hyperbole, is it,
especially given it's a beautiful day to day and on
the photos it's a beautiful day and the property looks magnificent,
(40:04):
doesn't it. What do you reckon, Tim?
Speaker 4 (40:05):
It's one of those I mean, every property is unique, okay,
but this is like pretty amazing because it's coastal. It's
got a long coastal edge. It's got what's called riparian rights,
which means you own down to the water's edge. There's
no strip around the edge. That's something taken when the
property has been subdivided over the years, and that's why
those little islands off the coast of it are actually
(40:27):
part of the property, so it's it's quite amazing.
Speaker 3 (40:30):
It's magnificent. So look, I reckon, if you've got six million,
you might be a bit short, but you know, you
never know, I'll get your six million out and you
might win Loto and just have still have to pound
another million. Hey, thanks David, lovely Demita and we'll catch
you again soon. I'm parents Quat's Next.
Speaker 1 (40:45):
For more from the Weekend Collective, listen live to news
Talks'd be weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks, EDB.
Speaker 2 (00:10):
No, No Down Again, Knockdown, Nockdowns, Drink.
Speaker 3 (00:39):
Thanks a lot for drink A long decided to drink.
Remind of the good times the song remindom of.
Speaker 2 (00:46):
The Times.
Speaker 3 (00:49):
Time, Yes, and welcome back to the show. This is
the Weekend Collective. The number is eight hundred and eighty
ten eighty. By the way, just before we just before
we look ahead, we'll get into this hour after five.
(01:09):
We're joined by Nathan Wallace. We're going to talk about
the line between join that line between family time and
friends time over the summer, but also when parents should
intervene and go as far as cutting off relationships that
they might not approve of for their children. So we'll
be talking about that on the on the Parents Squad
and that is after five. O'top it right now. This
(01:30):
is the one roof radio show where we want your
calls on eight hundred and eighty ten eighty. You can
text on nine two, nine to two. And actually we've
got we have a new guest on the show and
he is head of banking and Valuation risk at Velocity
and his name is David Grubb. And he's with us now,
(01:51):
David Gida, how are you going? That's nice Davy on
the show? Tell us what is what's what's your bag?
What do you what do you do these days? And
in terms of well, originally I.
Speaker 4 (02:02):
Was a register avad it's about ten years ago and
then I got sort of head hunted into the valuation
risk industry, which is what I've been doing now for
ten years, and that's advising the banks about valuation risk.
We provide probably eighty or ninety percent of all valuations
going through the New zealandustry industry that are going to
(02:23):
be linked on for mortgage leaning for houses, so that
all flows through our platform and we have to set
a set of rules around that.
Speaker 3 (02:29):
So you do valuations for the mortgage industry.
Speaker 4 (02:32):
So we don't do any valuations ourselves. We arrange the
whole process to de risk it for the banking sector,
so that's where we fit into the market and then
we assign it out. That's about five hundred residential values
around New Zealand and they are all registered on our
platform and we independently assign them and we do QA
(02:53):
on that process and we assist with writing rules for
the industry to make sure that we reduce fraud for
the banks and make the whole thing work. And then
we also do the automated valuation model, which is probably
nearly all the leanding that you do. If you don't
need a registered VAYUS report, we do the algorithm that
powers that for the banks for a lot of.
Speaker 3 (03:12):
The sorry that powers the algorithm that does what again, it's.
Speaker 4 (03:16):
Called an AVM, an automated valuation model, and our product
name is called an ie VL. So if you're a
broker in New Zealand, you'll be logging into our platform
and borrow money from the bank, and the bank called
leaned maybe up to about eighty percent of that value
the IVEL the ABM, and then if that doesn't work
for the particular deal, they say you need a registered
(03:37):
values report, and then they'll just log into our system
and it'll get going.
Speaker 3 (03:43):
So, who's how so registered value is report? Are they
using AI as well? There? This is AI? This is
AI territory, isn't it.
Speaker 4 (03:49):
Well, that's interesting you say that we're just rewriting the
rules at the moment. It's called the residential valuation standing
instructions is a mouthful for you and we call it
the RVSI and we just bring out a new version
of at the moment, and we're putting something in there
about AI. The idea is that, you know, I would
encourage values to use ALI to a certain extent, but
at the end of the day, they need to be
(04:11):
responsible for everything that's going into that report.
Speaker 3 (04:14):
So the algorithm, I've just got to get this right.
The algorithm's job comes before the registered value, or the
registered value uses the algorithm plus their own judgment.
Speaker 4 (04:25):
Yeah, that's that's a good question. So we power the
one roof platform. So all those numbers you see in
one roof that I love.
Speaker 3 (04:32):
The results of that algorithm is that the one where
it says this is what the lower the asking price is,
the high the low and expected value. That's you guys, Yeah,
that's us.
Speaker 4 (04:40):
But what we do is we don't give you the
exact number we give the banks because obviously they pay
handsomely for that, and and we give you a number
that you make a range, and so it gives people
an idea. It's pretty close, but it's never exactly the
same answer.
Speaker 3 (04:56):
That is a fun fact. So the banks pay a
lot of money to get an answer, which is so
for properties were let's say we're talking in the ballpark
of a million dollars or something, the number the bank
would get would be would be I don't know how
you do do it statistically degrees?
Speaker 4 (05:16):
It's definitely statistically so.
Speaker 3 (05:18):
But I mean within what I mean, how many thousands
does it narrowed down to? Well, we read you say
it's worth one million, two hundred thousand and sixty bucks.
Speaker 4 (05:28):
Okay, So I don't think the bank's worried about sixty dollars.
But what we do is we do have a figure
that comes off our algorithm, which is extremely complex, and
it's measured by the banks to make sure they're happy
with the accuracy. And what it comes with is a
measure of accuracy that we provide them as well. It's
called a forecast standard deviation, and we give them that
as well, and then they determine how good they think
(05:50):
that is, and then if it meets your criteria, they'll
use it, and if it doesn't, they'll say, we need
to escalate this to getting a vor on site, and
that's where they jump on the platform and order it
on any property in New Zealand, and.
Speaker 3 (06:03):
Hey, prestat so why would it not meet that what
they want? Well, if they're getting an answer, how do
they know the answer is not what they want?
Speaker 4 (06:10):
Yeah, that's that's a good question. So the in New Zealand,
the Reserve Bank has restrictions on what's called lvrs learned.
Speaker 3 (06:17):
To v ratios.
Speaker 4 (06:19):
So if you want to borrow nine hundred thousand against
that million dollar property, that will probably exceed the bank's
appetite for using an AVM, So they might go to
seventy percent, they might go to eighty percent of the number.
And if you're high borrowing on that then then they say,
(06:39):
well we need to get a register's various report for
two reasons. One is the number might come out different.
But the second one is that they might go to
a higher LVR on a registav's report because obviously they
go to the property.
Speaker 3 (06:50):
They have the confident that it is worth this and
if things turn to custom we know that this is
the money we can get back off the property and
our money, our loan is safe.
Speaker 4 (07:00):
Yeah, well that's the idea.
Speaker 3 (07:01):
And I mean you looked at me as if I'd
said something either smart or stupid. I can't work it up.
Speaker 4 (07:08):
Well, we have this FSD, so we forecast standard deviation,
so we we go, we go, it's we think it's
accurate to within ten percent, or we think it's acurate
within six per cent, or we think is accurate within
twenty percent. So our system measures how good we think
that number is. And then so the banks have an
appetite on FSD as well as that LVR ratio, so
(07:31):
that's where it kicks in.
Speaker 3 (07:32):
And the FSD sorry, the.
Speaker 4 (07:33):
Forecast standard deviation, So that's our statistical measure of accuracy
expected accuracy. And the banks absolutely they take all the
sales in New Zealand, they take all our eyebells, and
they measure how good we wear and how good are
you really good?
Speaker 3 (07:48):
Okay you can have a brag. So so that how
do they how do they measure? Is it once the
property sells or something when they have to absolutely go
where you're at?
Speaker 4 (07:57):
They do blind testing. We give them the a VM
or the AVM of every proper, every residual property.
Speaker 3 (08:03):
I'm going to get used to these automated valuation model.
Hang on, here we go AVM Automate evaluation model. Yep,
that's the algorithm.
Speaker 4 (08:14):
That's the algorithm, right, yep. And we give them an
AVM of every residential property in New Zealand that we
have it for them, like over ninety eight percent available
for residential houses, and they hold that and then all
the sales come in over the next few months and
then they see how good we were okay, and then
we go and then they go, we love doing business.
Speaker 3 (08:33):
With you, and can you tell me how good you were?
Speaker 4 (08:36):
Really good?
Speaker 3 (08:39):
We're really good, okay, So no politicians who tell you
they're really good and they might not be.
Speaker 2 (08:45):
So.
Speaker 4 (08:45):
Forecast standard deviation, well you shouldn't be getting two technical here.
But forecast standard deviation is if there's stand deviations around
about sixty eight percent, So if we if we if
we do a measure on that, then we're expected to
be within the number we gave sixty eight percent of
the time. And that's and that's how we adjust the
FIST to meet that metric.
Speaker 3 (09:03):
Within what range. Say on them within a million dollar property,
say you've valued something at a million, and I keep
saying a million, but just because it's a nice round number.
Speaker 4 (09:11):
So if it's a million dollars and we say that
the FSD FORECAS standard deviation is going to be ten
percent on this property, we would expect the value to
be within ten percent sixty eight percent of the time.
Speaker 3 (09:24):
Okay, how often is it much different to that? And
for what reasons does it go muche? For what reasons
does it vary in a greater degree?
Speaker 4 (09:36):
So it tapes off quite fast. So we don't have
a lot of assessments with an estimate over fifteen percent.
So nearly all our assessments are clustered around eight to
twelve percent sort of thing. And so it's just it's
what's called a distribution curve, and so not many properties
go over that fifteen percent layer. Okay, So your broker
(09:57):
will discuss this with you. They'll say, oh, this works
for us, or it doesn't work for us, and then
they'll go off to the bank and the bank will
give them a decision on on the outcome they want.
Speaker 3 (10:06):
Okay, So what's okay? So we're basically talking about a
model that predicts a value for things that you do
through an algorithm and you're very good at doing it.
What extra work does a registered value? So it goes off,
We've got this number of the bank's not happy, and
so they're looking for something else. What extra work does
a registered valuer do to give the bank that extra confidence.
(10:28):
What are they looking at?
Speaker 4 (10:29):
So the first thing they do is they go to
the property. Yeah, that's really important.
Speaker 3 (10:32):
That's generally pretty important.
Speaker 4 (10:33):
That's pretty important, and we have absolute strong rules around that.
The values must go inside the house and have a look,
and they do an assessment. They measure the house up
and particularly say you've done some extra improvements on your
house and spent quite a bit of money on it,
but you hadn't got the council back to update your
(10:55):
rating value. Then what they might do is they go, well,
my house is I think my house is better than
that million dollars because I've just spent turn one thousand
dollars doing it up inside, and no one knows that really,
So the valuer will go around and see that and
they go, well, ye, we think it's worth one point
two or one point one or whatever they as it at.
Speaker 3 (11:12):
Okay, are there particular things that the model can't really
take into account? I mean I come at it from
a layperson's point of view, and as I've seen a
million times in the show, I'll ask the dumb questions.
But for instance, I mean just the condition of a
place inside would have an impact on its value. And
that's where that's something that lies outside of the automated
(11:35):
sort of process, isn't it. That's when a value would
come in and go okay, well it's got no jib
on the walls.
Speaker 4 (11:42):
Absolutely. If you're down where peat wolf Camp lives, he
always says, I live in Damnport. What you used to
get in Demport a lot is people would buy a
house and dot the outside and do the inside last,
or they do it the inside and do the outside last,
so the computer can't see the inside of a house.
Speaker 3 (11:57):
So how does the average punter who is you know,
especially buyers, I guess, but to some extent sell because
you want to know you get in the right price,
and you've got a real estate agent who's doing their job.
But how does how does what is the best way
for buyers if they're looking at a range of property,
because not everyone can afford to get registered valuations done
(12:17):
here and there. If they want to be confident, what
how confident can they be on something like the one
roof site Because you did say that, you know, you
give a much more precise sort of valuation to be
in zed. But I'm thinking that the one roof one
would have to be fairly close to me.
Speaker 4 (12:36):
Sorry I don't name clients.
Speaker 3 (12:37):
Oh not be in Zed. I just thought, oh yeah, sorry,
it's just off the top of my head. But two
a bank, absolutely, So I was thinking be in Z
because they were this is complete non sequitive because they
were the bank we were talking about in our panel
who sponsored the breakers. So they's just stuck on my head. Yes, okay,
carry on. What was my question?
Speaker 5 (12:58):
So?
Speaker 3 (12:58):
Yeah, I go to the one roof site and I'm
looking at a property and it says estimated value range
between such and such. What other homework do I need
to do to get more confident with that? Do you
reckon because your background years ago is as a value
or isn't it?
Speaker 1 (13:17):
So?
Speaker 4 (13:17):
I think it's the startup for twenty So I think
it's great if you see something online, if you see
something on one roof and you go, oh, man, that
house looks great. I mean we're going to talk about
the property of the week later and you go, oh,
that looks that looks great. Then and probably that one
might not be one necessary that fits into this criteria
(13:37):
because it really is quite unique.
Speaker 3 (13:39):
Yeah. In fact, you should stick around for the property
of the week, because I don't want to sidetrack myself.
But I did look at the value for that and
thought that is well under what it's going to get,
isn't it.
Speaker 4 (13:50):
So our model stops at a certain level. Yeah, because
we would say we use complexity approaches to dismissing a
certain amount of property. So we sort of say, if
it's an outlier property, just say you're in an area
of hunts screamet of houses and you've got a six
hundred screamet a house, or you're in an area of
five hundred thousand dollars and you've got a house it's
(14:10):
worth about three million dollars. It's an outlier, so you're
much better to have a registered value or look at that.
The AVM is great for standard property.
Speaker 3 (14:18):
Does it use just existing property data within a certain
area to work out the value or does it actually
how sophisticated is it when it comes to working out
the price if such for this particular property we'll be
talking about later on coastal aspect outlook, you know, in
the middle of the high record goal.
Speaker 4 (14:37):
So we wouldn't pretend the AVM will work for the
property of the week. But at the end of the day.
It works for like your million dollar houses in Augland
or you two million dollar houses. That's that's what it's
great at.
Speaker 3 (14:46):
Does it know? Does it know things like, oh, this
proproperty might be a bit more sought after because it
just has a little bit more elevation. Does it take
things like that aspect direction north south facing all that
sort of thing, as opposed to the next door neighbor's house,
which might I don't know, have the shade of a
(15:07):
rather large tree, sort of either doing it a favor
or otherwise.
Speaker 4 (15:10):
Yeah, I mean, like that's that's a fair question. But
just keep telling yourself that the computer doesn't go to
the property, so I can't see that tree. But it does.
What it does is it brings in a lot of
information from the market, and it bundles it all up
and then analyzes it and comes up with a number.
And obviously that is driven by sales. So if you've
(15:32):
got a street with the call homogeneous properties or similar properties,
if you've got a street with similar properties and they're
all five hundred thousand dollars, then it'll see the house
down the road sold for five point fifty and gets
an idea of the market starting to lift, and therefore
the algorithm adjusts with the market. So we bring out
a new number every week, and we have all sorts
of complex, inder seasoned things that let us know how
(15:55):
the market's changing on a week by week basis.
Speaker 3 (15:58):
Okay, cost this list of this is fascinating if you've
got some cause and actually how do you go about?
I mean, the simple question is how much attention do
you pay? Two figures that are online which have been
worked out via various algorithms, the rhythms including the work
that the work that David does, I mean how much?
And what are the things where you look at something
which will either add significantly significantly to the property expectations
(16:24):
that might make you think, okay, if we're going to
get a bargain because we work out that it's going
to be worth more for this reason. So how do
you work out the value of the property that you
look at? If you've got any questions for David, he's
head of banking and valuation risk at Velocity. And just
to clarify that, when you can tell me if I'm wrong,
David valuation risk meaning that he assists banks in working
(16:47):
out how safe the loan their lending is based on
getting the right valuation for a property. Is that the
right way to sort of put it before we go
to the brake?
Speaker 4 (16:56):
So I advise on property risk ready still at the
valuation sector.
Speaker 3 (17:00):
Okay, so how do you describe it again? I'll come
back after the break. You can get David a call
on eight hundred and eighty ten eighty or me. I
won't have much to say so much in terms of
my advice. It's twenty four past four News Talks EDB
News Talks ed B, Tim Beverage, and my guest is
David Grubb. He is a head of valuation risk at
Velocity and Banking as well giving us some good information. Actually,
(17:24):
it's quite fascinating about that whole one roof thing because
I'm looking forward to seeing what we reckon that that
property might be worth. It's our property of the week
later on. But taking your calls on eight hundred eighty
ten eighty now just on the market itself, So how
much when it comes to trends and what the market's
(17:47):
been doing we do? I mean, it's an ever going,
ongoing conversation around residential property and the value of it
and where it's you know, the headlines will pick up
a couple of blips and say, oh, the market's turned
if everything's looking wonderful. What's your take on where the
residential market is at the moment.
Speaker 4 (18:06):
Well, I think what we've possibly done is gone past
the bottom of the market. We can see it in
our data that looks like the thirty. First of all,
this could be the bottom. It's been threatening for the
last two years to be at the bottom. Then it's
gone up a bit. People have got enthusiastic about interest
rates coming down, and then they've realized, actually, they're not
back to a level that makes them comfortable. Some people
(18:28):
obviously overextended. When the interest rates were cheap, they went
out and border holiday home. They went in border a
new OUDI are six, they went and they went and
bought a boat, and they increased the size of their
mortgage by maybe in some cases an a million dollars.
And then the interest rates doubled and something had to give.
Speaker 3 (18:48):
I'm always amazed that people see that their house has
gone up in value so they go and borrow against
it for toys. I mean, I know this is not
quite your bag, but is it? How common is it that?
I mean, I don't know how much you can track
that behavior, but do you know through what the banks
would indicate or your clients would indicate in terms of
our people are borrowing more because they're just feeling that
(19:09):
they've got more money.
Speaker 4 (19:11):
I think if you've got a certain amount of money
to spend, that you feel is that you've got leftover
a month. If such a thing as left over a month,
but you know you might you might have, say two
thousand dollars a month you want to put towards your mortgage,
and that might get you into a seven hundred and
fifty thousand dollar house with your deposit, or coming out
of an old house another house into that. But then
(19:33):
when the mortgage rates increase, you can suddenly borrow a
whole lot more money for that same outgoing. So you
feel wealthier because for no change in your lifestyle, suddenly
you've got a new car. And that's what happened after COVID.
Speaker 3 (19:47):
Do you think that behavior would be the same again
if we suddenly had really cheap money. Do you think
people have been once pitt and twice shy?
Speaker 4 (19:53):
None that looks some people will, of course, But I
think I think the psyche of the market. As people
walk into the bank and they say how much money
can I borrow to buy a house? And the bank
runs all the numbers and they say, you can buy this,
you can spend this amount of money. Now, the banks
aren't really supposed to sort of talk to you about
the maximum you can borrow, but it's inevitably the question
(20:14):
they ask their broker.
Speaker 3 (20:15):
Their comes up. I mean, everyone wants to know what's
the max and what they can borrow. I mean, whoever
brings the conversation up.
Speaker 4 (20:22):
Well, he's you think you're going out to buy a
million dollar house. We talked before about that. You see
it on one roof, get you get a feel for
where it's at. But of course, as soon as you
start looking, the one that's one point one and the
one that's one point two just looks that much better.
And so then you start to go, oh, maybe I
can borrow a bit more money. I'll go and talk
to the bank on Monday and just see how far
(20:43):
I can go to my auction.
Speaker 3 (20:44):
That's an interesting question actually, as to do you think
people's that view of the way they the the way
people view a property's value, is it influenced by what
they are told its value is in terms of how
much they like it. Do people go to a property
and they're told, look all this one, it's one point
(21:05):
three more and they go, oh, the rush, this is nice.
Are they affected by that sort of information or do
you think they still walk in and go, what one
point three for this dive?
Speaker 4 (21:15):
So the way they judge that one point three for
this dive is that that they have Most people, when
they're in the market, they look around, they miss out
on a few properties. They find out what those properties
actually did sell for, which might have been out of
their reach, and so you know, they might go to property,
think they're going to pay about a million dollars, it
goes to auction, it goes for one point one five
or something, and it was just a bit out of
(21:36):
their reach. But now they get a benchmark in their
mind what that was, and they very quickly become quasi
valuers by being able to say, those five properties sold
for this price, and the one that i'm looking at
today is better or worse than those properties. So the
market doesn't know that's what it's doing, but that's effectively
what the value is analyze, is that that very point
(21:59):
how much better or worse one property is from another.
Speaker 5 (22:01):
So the.
Speaker 4 (22:03):
People buying a house, they don't do the analysis, They
just get that feeling. But you'd be amazed how quickly
they dial into what an area is priced at if
they're in the market for just a few weeks.
Speaker 3 (22:15):
So how so you'd say, if you are someone who's
looking at getting into the market, a first time buyer,
that really, if you really are serious about buying and
you start looking at properties you want, then you will
quickly get an idea about what a market, what a
place is worth. You can start to trust sort of
your own judgment in the end, I guess we're talking
about that.
Speaker 4 (22:33):
We you know, if you're looking for a six hundred
and fifty seven hundred thousand dollars terrace townhouse in Auckland,
you'll become an expert within twenty five thousand dollars on
that property within days, because you go to this ven door,
you see what they're offering in that location, and you
have to adjust in your mind. You know, you might
adjust slightly between say Hobbsonville Point and West Skate and
(22:54):
you might go in your mind, well, I think Westgate's
fifty thousand dollars less than Hobbsonville points. So you adjust
that so you get the same house in the same
in two different locations. You go, well, that's seven fifty,
that's seven hundred. I understand the difference between those two
locations straight away. My head is fifty thousand. Now I'm
looking at a different house and I think it's got
the extra toilet downstairs, and I'll pay ten grand for that.
And I'm sure uncle, you know the answer.
Speaker 3 (23:15):
Actually how much? Ah? How easy is it to quantify
things like an extra toilet or an office which really
maybe that is a bedroom. I mean, just attribute what
are the attributes of a place? And how do you
work out how much that adds aside from the what
the norm is in that area.
Speaker 4 (23:36):
Look, the market does find its levels pretty quickly. So
you know, when you go out to these terracetownhouse areas,
you'll have two bedroom houses, three bedroom houses, four bedroom houses,
and when does the second bathroom kicking? And things like that.
But you'll quickly you'll again you'll quickly know within twenty
five maybe fifty thousand dollars, but very quickly the difference
between them, because you'll go, look, that three bedroom one
(23:58):
is seventy five thousand dollars more, it's out of my reach.
So I'm buying the two better this time around.
Speaker 3 (24:04):
And you've worked at the two better is going to
be worth I mean how much? I mean, I'm dying
to ask you how much an extra bedroom makes. But
of course it depends whether you're in roomy era or
not room raor.
Speaker 4 (24:14):
Look, I don't think I don't think it's quite as
simple as it it probably is in the terrace townhousing
that you know, a two bedroom might be say seven
to fifty and a three bedroom might be eight twenty five,
so it could be seventy five thousand. But you get
a bit of extra floy are at the same time,
so your living area might be a bit bigger, you
might get an extra bathroom. So there's a few other
factors that come in. So I wouldn't say a bedroom
is worth X dollars. But you will also get properties
(24:36):
that have three bedrooms in the pokey or two generous bedrooms,
and you go, you know what, there's only you know,
a young couple these days buying a house using kiwisaver.
That's just a fantastic entry into into real estate and
New Zealand. It's Kiwi Saver because it get it gets
under thirty year olds. My two daughters under thirty bought
brand new houses because of Keysaver. YEP.
Speaker 3 (24:57):
It's funny because on the money how we've had people
express the opinions that and there is within the political
realm there's the opinion and I don't want to get
too sidetracked by this that that's a bad idea for
people to break into their retirement savings. But of course,
if you're doing it in your twenties and getting into
a house, then probably not a bad idea, really is
First if you're using it when you're fifty to get
(25:17):
into your first house, that might be more problematic.
Speaker 4 (25:20):
Yeah, but it's probably still a form of saving, isn't it.
You're putting it into that real estate, so the money
is still there. You haven't lost that money. So you know,
people at the age of thirty getting into a house
twenty five years later it's paid off. They get into
their mid fifties, their kids have left home, jump on
a cruise ship, jump on a plane.
Speaker 3 (25:38):
Well and hopefully not load up the mortgage.
Speaker 4 (25:42):
Well you know, at that age you've already paid off
your house, okay, and don't get me wrong. By now, Tim,
you've already moved up the ladder a bit. But you
know this is for working faces. There's plenty of them.
And by then you've bought your investment property, and that's
where you actually get some wealth out of your investment property,
because that's what's called a leveraged investment.
Speaker 3 (26:03):
So getting back to that, you know the cycle of
the market. You were saying the thirty first of August,
I mean, that's just that's very accurate, Magion. If it
was literally the thirty first of August, but you picked
the end of that month, you're saying that you reckon
that the bottom of the market was then. And is
that because all the data is pointing to a slide upwards.
(26:25):
You can look literally look at a curve on the
graph and absolutely that's the point.
Speaker 4 (26:29):
Yep, it's amazing like that. So we actually saw the
market peaking in about November twenty one, and we set
to the bank straight away. Look, we can see it
in our data that it's peaking now, but at the
end of the day overall, it peaked in about February
twenty two, but we could already see it changing in November,
so we gave the banks an alert that we think
that was.
Speaker 3 (26:48):
It because one of the questions, and we might dig
into this, we might take the break, actually, But so
I feel when I watch commentary on this, and I
actually I don't know how much you would watch commentary
because is it relevant to your job at all when
you just want to try and work out values. But
you do notice in the real estate pages that a
market starts to turn and you start to see stories
(27:10):
where you know, real stations at state agents will put
out stories like, oh, this has been this big jump
here and a property sold for this much over its
value and it's all gained trying to get that momentum
that the market's moving.
Speaker 4 (27:21):
But how.
Speaker 3 (27:25):
The question that I want to and we'll take the
break now, is there's this implication that in many people's
minds that the boom times we've seen before will happen
again once we get past that turn, And I just
I want to dig into it after the break as
to whether the past performance that we've seen with things
going crazy are what we can expect in the future.
(27:46):
Because they say it famously, don't they. In the investment world,
past performance is no guarantee to see your future performance.
What is that like in the real estate market. You
can give us your reckons, by the way, on eight
hundred and eighty ten eighty text nine to nine two.
My guest is David Grubb. He is head of banking
and evaluation risk at Velocity. We'll be back in just
a moment news Talks. It'd be it's twenty two minutes
(28:07):
to five news Talks. He'd be welcome back. This is
one roof Radio show. We have a new guest on
the Show's David Grub. He's head of banking and evaluation
risk at Velocity. And one of the things, of course
at Velocity they do is they provide the price estimates.
If you are going to the one roof radio one
roof radio, if you're going to the one roof site
and you get a property estimate, then that information has
come through the algorithms and the work generated by David
(28:30):
and his team. Is it a team of people, David, You.
Speaker 4 (28:32):
See we've got clever, much more clever people than me
that they actually do their algorithm.
Speaker 3 (28:37):
Yeah. How actually, just before we get into that question,
I said we were going to get into straight away
where what is the future of AI with you know,
valuations because AI is never going to visit a property
like a value like a registered property valuer is but
does it make is it going to make their jobs easier?
Or how's how's it going to work?
Speaker 4 (28:57):
So my take on AI is there's no such thing
as all right, okay, it's machine learning. So in other words,
it only learns off what the information gets put in,
and it's just they've got way way better at analyzing it.
There's new models that now analyze that data, which means
we now have these large language models that feed it
back and you have a conversation chat GPT, but also
(29:18):
with our AVM model. The way it used to work,
say fifteen years ago, the way the industry used to work,
they'd use a thing called linear aggression. So it was
a mathematical statistical thing that we learned at university, and
then they had multiple linear aggresson where you put all
these different factors in. But now they do what I
would probably describe as spooky maths.
Speaker 3 (29:37):
So it's not quite a sellable calling it spooky maths.
I'm going to go on to chat GP spooky maths.
Speaker 4 (29:43):
Yeah, So the way it works is so NIEWA, which
is now called Earth sciences. They've invested heavily in new computers,
like they're calling it a supercomputer, okay, and they run
special models on that to work out the weather and
the forecasts of the weather. And if you think about that,
what that's doing is pulling through a huge amount of information,
(30:06):
more than they've ever been able to pull through before,
which is what we're seeing with AI. It can now
assemble a lot more information on the fly, trillions of
things a second. And that's what we do. We now
use a fancy algorithm and behind it to run the data.
And that's why it gets better and better because we
can now throw much more information into it and it
(30:28):
can consume.
Speaker 3 (30:28):
It and spit out a conclusion for you. Yeah, and
then that gets measured spooky moths. I think I prefer
that in a way, AI is basically just a brand
to make it appealing to people like or anyone like me, thinking, oh,
this thing's really smart, where in fact it's just a
very very complex and highly powered algorithm that can analyze
and spit out data. But AI is the way we go,
(30:50):
Oh you know, it's to be able to think for
itself soon.
Speaker 4 (30:53):
Well, I think the thing about ALI is it can
think so much faster than we ever can, and can
assemble this data. I mean you ask you are some
really complex questions of chat GPT. It goes away to
ten websites, It assembles all the information and brings it
back in three seconds.
Speaker 3 (31:06):
Sometimes does get it wrong. I do like it when
you go, hang on a minute, you just mentioned this
person's NA Where did that come from? They go, you're right, term,
I got it wrong. Let me do that again. Let's
take some calls.
Speaker 5 (31:15):
Guy, hello, right, could ill doing? We've got property that
then we purchased in twenty eighteen, and I'm just listening
to your chatting about the automated valuation registered valuation. We're
looking to keep the property but rent it out as
(31:37):
the rental income, and the banks come back and I
think they've given us automated valuation. Is the question is
is it worth? We've done a lot of improvements like
the roof of the kitchen, the bathroom, garage and stuff
like that. Can we get our registered valuation and take
(31:58):
that to the bank and say, hey, assumingutes, assuming the
registered valuation is more than what they're yeah, the property
worth and then we get more equity out of it.
If we're refinancing the montage. Is that something you could
do that is a bit of a risk.
Speaker 4 (32:14):
There, I'll just go straight to Dable with that, I
would imagine, yes, David, Yeah, thanks guy. So, I think
the thing about the if you're not happy with the
number that you're seeing the AVM more the number of
the bank gives you than to how they got to it.
But they give you that number and you go, yeah,
I think it's worth it and more than a million
dollars because of all the things you said. You've done
(32:35):
all this work and and the banks will always allow
you to get a registered vida's report if you're unhappy
with the AVM. So it's they don't say no, that's it.
They absolutely will always allow it. But just to just
to perhaps correct you slightly on that guy, the banks
don't encourage you to go and get your own report
these days, they'd ask you to go and see your
mortgage advisor or come and see the bank directly, and
(32:58):
they will order it on the system and then it'll
be independently allocated out and that makes sure that the
bank is happy with there was the independent allocation of
that valuation report. That is that So don't. You don't
bring them into the bank anymore.
Speaker 3 (33:14):
Really, so guy wouldn't go and get his own valuation
when he asked the bank to who pays so yes,
because in other words, like the bank might not be
sure if guys value are as a friend who's doing
him a favor and pumping an extra fifty grand on
the on the title, well we.
Speaker 4 (33:30):
Can be anywhere near that, but no.
Speaker 3 (33:32):
But if we if we be crude about it, it's.
Speaker 4 (33:34):
Absolutely it's to ensure there's full independence in the process.
And and actually the banks are controlled from Australia with
rules I think called APS two twenty and that sets
out rules of the independence. So that's what they really
want to see. So the banks in New Zealand have
all adopted this need for independence in the process. And
(33:55):
and then that goes through quality and things like that
as well.
Speaker 3 (33:58):
So Guy.
Speaker 5 (34:00):
There'd be no appointment. Do we need off our own
back goes to the bank would be able to accept
it if you know what I mean?
Speaker 4 (34:07):
They might they might be able to accept it, but
they might you just might need to jump through more
hoops in the bare delay and things like that. So
that nearly all the bank lending that's based on register
these reports is allocated through through the Velocity system if
you like, and and they come through to the bank
and then that's delivered digitally, so there's no chance of
(34:30):
anyone getting hold of the PDF and changing it and things.
So it's all about reducing risk. And that's where the
valuation risk comes in. Is that that I develop processes
to reduce risk in the process.
Speaker 3 (34:41):
Okay, so just in brief, a guy who's wants who
thinks the property is worth more than he's been told
by the bank, can what does he say to the bank,
I think you're wrong and I want you to go
and get another valuation on this or how does it work?
Speaker 4 (34:55):
Yeah, so the conversation would be if if you can't
raise enough money from the AVM, I mean, you shouldn't
go off and get a report just the back of it,
you know, Like you have the conversation with the bank,
the bank goes, look, you know you haven't got enough equity,
and you're going, well, I've spent a couple hundred thousand,
That's what I said at the beginning, that you've spent
some money on the house. You think it is better
than that. And remember before I said about people who
(35:16):
are actually quite experts on what property is worth, and
they're looking people with their own houses probably know within
one hundred thousand anyway of what their house is probably worth.
And so you know, if you're active in the industry
as far as talking about real estate, you're going to
have an opinion. And if you if you materially think
that the bank's value internal on the system is not right,
(35:40):
they will say, hey, do you want us to arrange
your registered VIAS report and they'll just tap into the system.
You can email yes, you've got to pay for it.
Speaker 3 (35:48):
So guy, you need to have that conversation with the
bank now, not your own.
Speaker 4 (35:51):
Value or your mortgage advisor or your mortgage advisor.
Speaker 3 (35:53):
Is that helpful?
Speaker 5 (35:54):
Yep, good on that. Excellent, Thank you mate.
Speaker 3 (35:58):
Actually, of course we have not much time yet. But hey,
just from what you've observed I mentioned about the past performance,
is it a predictor of future performance? What's your I mean?
Is it? Have you seen patents in behalf in the
past where once a market will go into a bit
of a slump and then it'll slowly wind up and
after three or four years it'll look like there's this
(36:19):
sort of growth and then after so many years it'll
have doubled. What are you what's your rough take? Without
any We're not going to hold you to it. There's
no specialized financial advice here, is past performance any good
in this market once it's now that we think it's
turned around.
Speaker 4 (36:33):
So twenty ten to twenty twenty, we saw about a
six and a half percent peranum increase in v of
properties over that time. Since twenty eighteen, going through this
whole COVID up forty down fifteen, you know, and all
the rest of it, and then flat for the last
two years that's been about four and a half percent,
four point four percent, So we're a bit behind, you know,
(36:53):
what those long run figures were. But what's happening at
the moment is that the commitment to your mortgage is
still above that long run number. So people who are
committing about thirty percent towards their mortgage previously and at
the moment it's sitting between about thirty two and thirty
four percent. So we're above the line. And that's why
I think the market hasn't really got going because people
are still been hurting. We're on the way down off
(37:15):
the hurt and if you think about the people that
took out they have one year fixed mortgages, they're still waiting.
They took them out of March this year, they're still
waiting to March next year until they get a one
percent relief. And that's going to be a huge relief
to them. So we haven't got back to that equilibrium.
But the equilibrium is not a flat market. Equilibrium is
a gradually gaining market. And you know at the end
(37:38):
of the day that you asked Sharon Zola from AINSI,
I've heard her say some property inflation is a good
thing and Mum and Dad will definitely when they buy
that investment property. That's what they need, one hundred percent finance.
Every dollar that goes up is money in their bank
for no out.
Speaker 3 (37:52):
They okay, hey, look we're going to take a quick break. Orse.
So that Property of the Week is next and it
is a doozy and I'm not sure David will want
to comment on the value given his role, but I'll
have I'll have them a shot at it. Anyway. This
is the weekend Collective. It is nine minutes to five
news Talks.
Speaker 1 (38:10):
Beak the one roof Property of the Week on the
Weekend Collective.
Speaker 3 (38:16):
Yes, the one roof property of the week. As we've
mentioned with my guest to David Grebb, it's a property
on wy Hecke Island. It is forty Rothschild that's roths
Child Terrace, wy Hecke Island. It's four bedrooms, two bathrooms.
The house is just under two hundred square meters almost
five hectares of land. It was built in nineteen fifteen
(38:40):
and it's described as one of the most significant private
coastal estates in New Zealand and it's a rare sanctuary.
It offers total privacy, privacy, breathtaking scale and unrivaled access
to one of the most beautiful coastal environments in the
Hiraky golf Hodaki should I say, and I would say that,
(39:00):
you know, normally real estate blurbs can sort of gild
the lily a little bit. I would have thought that
sentence is a pretty good description. It is a gorgeous
looking property. You can walk directly from your own shoreline
to your private island which you've got there as well.
The estate also include award winning wines, a beautifully restored
(39:20):
cari villa, manicured grounds that capture the light history and
romance of this remarkable location. It is quite and it's
described as properties of this caliber are almost never offered
to the public. And I think, here's the valuation if
I always have them a rule of thumb when I
look at these things and you sort of think, oh God,
that's going to be out of most people's reach. The
(39:42):
estimate on the one roof site is five point nine
to four million, which feels light to the right bib.
But it's I mean, the description of it is pretty David.
The description of it's it's not really hyperbole, is it,
especially given it's a beautiful day to day and on
the photos it's a beautiful day and the property looks magnificent,
(40:04):
doesn't it. What do you reckon, Tim?
Speaker 4 (40:05):
It's one of those I mean, every property is unique, okay,
but this is like pretty amazing because it's coastal. It's
got a long coastal edge. It's got what's called riparian rights,
which means you own down to the water's edge. There's
no strip around the edge. That's something taken when the
property has been subdivided over the years, and that's why
those little islands off the coast of it are actually
(40:27):
part of the property, so it's it's quite amazing.
Speaker 3 (40:30):
It's magnificent. So look, I reckon, if you've got six million,
you might be a bit short, but you know, you
never know, I'll get your six million out and you
might win Loto and just have still have to pound
another million. Hey, thanks David, lovely Demita and we'll catch
you again soon. I'm parents Quat's Next.
Speaker 1 (40:45):
For more from the Weekend Collective, listen live to news
Talks'd be weekends from three pm, or follow the podcast
on iHeartRadio.
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