July 4, 2026 • 41 mins
Property's been the golden-goose egg in New Zealand for as long as we've known. It was your retirement plan, your income stream, your lifeline, and what you worked towards.
The plan was simple: buy a house, pay it off and/or rent it out, and by the time you stopped working you had something solid behind you. It was our version of the American Dream.
But with the house market in a state of volatility or decline, interest rates and insurance going up, and capital gains tax becoming a hot-topic, is planning your life around the property ladder outdated? or is it a financial trap?
So is property still the asset it was, or should we starting widening our view elsewhere?
Opes Partners Resident Economist Ed Mcknight joins Tim Beveridge now for the One Roof Radio show.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks,
B Cues, food, where unsmooth.
Speaker 2 (00:42):
And welcome back or welcome in the Weekend Collective. I'm
Tim Beverte. I must be with the Heavy Rockets, having
given Taylor Swift a hard time. IBE wish you need
to start the next hour with a bit of tay
or not, I don't know anyway. Welcome to, welcome in
if you have, if you are just joining us, or
welcome back. And this is the one roof radio show,
and this is the moment we want your calls. We
(01:03):
invite you to join the comversation. Gosh, that sounds so formal,
but I do say as opposed to we want your cause. Literally,
it's just about joining the conversation. You don't have to
have the answer to the meaning of life. You can
just come in and join us and add your two
pen tuppenny whatever the expressions I've forgotten now my guest
to probably correct me on that one, but just add
what you reckon and we'd love you to join us.
(01:23):
On eight hundred and eighty ten eighty text nine nine two.
So we're going to kick off with but just before
I introduce my guest the property. You know, it's been
the golden Goose in New Zealand for for a long time.
And there's always this expression about getting onto the property ladder.
Speaker 3 (01:43):
And I've never.
Speaker 2 (01:45):
Actually really thought of what the property ladder was. I
guess maybe I was thinking if you I've got a
metaphor in my mind that you're you're raging around in
the sea and somebody throws a ladder down and you
grab onto that ladder because you just need to get
on before you get washed away, and that's the end
of view. That's a metaphor I have for the property ladder,
But I've never really thought about it as as being
(02:05):
something you've just got to get onto and cling to.
But I sometimes wonder whether the property ladder for most
people is just one rung. You just get on it
and you hang on there with your eighty or ninety
percent mortgage. And as opposed, I think probably I'm guessing
the property ladder is you get on the first rung
and the eventually you progress. But of course these days,
people you know, often especially if you bought in twenty
(02:28):
twenty one sort of around the time spending so much
on a house, is there such a thing as the
property leader and what the hell is it? I don't know.
We're also going to dig into a little bit there's
been I think Tony Alexander talked about when the property
market might revive a little. He didn't actually he didn't
play his cards overplay the cards on that, but he
(02:48):
talked about twenty twenty seven there'd be maybe something of
a revival. And I think the caveat was going to
be that it wasn't necessarily going to be rocking and
rolling like we've seen it before. But we're going to
dig into that as well, but to discuss what on
earth to think of it as something we just get
on first and then move up. Do you buy your
first house thinking this is going to be the first
of five? My parents, I think I following their example,
(03:11):
they built a house in Rotaua and then I don't
know why we moved. We moved. We were one seventy
of a particular rod ll it doesn't matter, we're not
there any longer. We were in Coah Point Road. We
moved from one seventy to one eighty and I never
understood why we moved to one eighty, but I think
it was because it was less land to manage. But
that's that was it. And then they oh, that's right.
(03:32):
Then they moved to Walkland and retired, et cetera. Not
many people moved to Walkland to retire. That was another
strange one. Anyway, What the hell is the property ladder?
And to discuss that with me?
Speaker 1 (03:43):
Is?
Speaker 2 (03:43):
He's resident economist for Op's Partners. He also features on
his own podcast, It's Ed McKnight. Good a Ed. How
are you going?
Speaker 3 (03:49):
Oh great to be here, Tim, And it's wonderful to
talk about the property leader with you guys with you today?
Speaker 2 (03:55):
Actually, did you like my metaphor? I've been reading Showgun
and there's there's a bit where there's a shipwreck and
they're getting washed onto the shore and then they have
to sort of throw down a rope to someone before
they get washed out to see to grab onto it
and to climb up the cliff. And I think I've
always thought of the property ladder as been this tumultuous
(04:17):
sea of uncertainty, and that's some stage to reach for it,
grab the letter. That's my analogy.
Speaker 3 (04:23):
Well I must have been. I've never thought of it
quite that way. But one thing, because I'm a bit
curious like you. Sometimes you hear these phrases and you're like,
where does that actually come from? Well, I went and
found out. So according to the dictionary, it came up
in nineteen forty one.
Speaker 2 (04:38):
You went and found out. So I went to the dictionary.
Speaker 3 (04:41):
That's right, Oxford English Dictionary. They actually put that phrase
property letter nineteen forty one in a paperby I'm going
to absolutely butcher this guy's name because it's in French. Tim,
But you're I'll have a crack. You're more of alerted
man than me.
Speaker 2 (04:55):
So well, I was wondering what that expression was. You know,
a tupenny. You know what was that expression I used before?
I've forgotten already.
Speaker 3 (05:02):
Look you don't know, and neither do I. So we
just want correct one of your toppens on that that's it.
But as they was, Francois Lafite, Edie wrote, pass me.
Speaker 2 (05:11):
That bit of paper.
Speaker 3 (05:14):
Who was it, Francoise't it hang on where it's at
the top of the piece of paper.
Speaker 2 (05:21):
Oh, Francois Lafitte.
Speaker 3 (05:23):
Oh it's pretty close.
Speaker 2 (05:24):
Francois Lafite.
Speaker 3 (05:27):
I'll take that.
Speaker 2 (05:28):
I think you've treated him like it's an Italian name.
Speaker 3 (05:30):
Hey, the listeners aren't here to hear two middle aged
white guys talk about absolutely butcher the French language. But
here we go. Anyway. He coined that in the Eugenics
Review of all Things, which I was like, oh, whenever
I hear you didn't so I just think of scientology.
Speaker 2 (05:45):
He would have known my cousin, Lord William Beveridge, who
was wrote the Beverage Report, which was the foundation of
the Social Welfare and then and the National Health Service
which we adopted here, but it was also a eugenicist.
Speaker 3 (05:58):
Is that right?
Speaker 2 (05:58):
Yeah? Yeah, fun fact for you. I'll tell you what
if you have come for fun facts. The One Roof
radio show was the place to go. How much have
we covered?
Speaker 3 (06:08):
We've covered a lot, but also not very much at
the same time. And basically the idea of the property
letter though, is that you do get on and you
buy a starter home and you pay off a bit
of the mortgage and the property goes up in value
and maybe it's a bit smaller, but by the time
you've built a bit of equity in there, maybe you've
had a kid, you've got your second one on the way,
(06:29):
so you sell that because you need an extra bedroom.
Now you're in a three bedroom property. You're living it
for it, but maybe you do some renovations. All I've
added it on sweet because now, oh, well, gosh, the
wife's pregnant again. We needed we need a beggar house.
It over several decades again, well you see, you see, Tim,
I know my wife's listening to this, but where no,
(06:52):
she's not pregnant. They get excited. I'd be excited if
she was.
Speaker 2 (06:56):
I thought you're about to drop the do the public reveal.
Speaker 3 (06:58):
Well, well give me six months and we'll see what
we can do for you.
Speaker 2 (07:03):
Tim forgotten what we were talking about.
Speaker 3 (07:07):
Ladder, Yeah, lafite And so what ends up happening is
you trade up over time. And it's quite funny because
we often when we're talking about the property ladder, we
do look at our parents and see what happened with them,
because they've been in property for a lot longer than
obviously us kids have been, no matter how old we
are as kids. And if I think about it, my
parents started out in Harwarda. I mean you threw out
(07:30):
one hundred and seventy whatever road it was, I'll throw
out our and I think we were Camberwell Road and
after a while that happened. I was on the way.
I was born in that property. This is a property
and the property my mum was a natural mother and
she was really into home booth, so anyway, I was
born there. Then we sold that up because obviously that
wasn't that important to them, and we moved to a
(07:51):
different property. Then they upgraded again, and they eventually got divorced,
we upgraded again, and eventually you trade up houses over time.
The average person says about seven to ten years within
their property right. So if you're starting out in the
average amberage of a first home buyer is about thirty
six in New Zealand at the moment, So if you
go thirty six to sixty six, you might have three
or four properties in your lifetime. If you were to
(08:13):
follow those averages right and over time, hopefully you might
be upgrading. So that effectively is the property letter. I
think it is still a useful way of thinking about property.
And the reason behind that is that often when we're
talking to first home buyers, we say to them, hey, look,
just manage your expectations around what you're going to buy.
(08:36):
You're not going to have what your parents have right now.
Because they might have traded up a few times as
they've paid off their mortgage, their incomes might have risen
as they've progressed through the workforce over time, and so
you might start out with just an entry level home
and eventually trade up. I actually say it with my
sister and her partner. He bought when he was about
(08:57):
eighteen nineteen years old, a small two bedroom home in Inglewood,
of all places, that's just about maybe fifteen minutes south
of New Plymouth. After a while, I mean, I don't
know why Inglewood house prices went up, but they did.
They ended up selling, and they traded up to a
nicer part a few Plymouth. Then they had that for
a while, they ended up selling that we're looking at
a different property in a different part of town, and
(09:19):
so you do tend to see that buying and selling
over time.
Speaker 2 (09:23):
I guess the question, you know, what did you what
the statue gave there about how often people would buy
and sell.
Speaker 3 (09:29):
Seven to ten years ten years.
Speaker 2 (09:31):
So if you were to buy a house in your twenties,
I don't actually how many people what percentage of people
are buying house in their twenties, but so you anticipate
I mean, in fact, I think I remember the number
being most the average number of people moved four or
five times in their lives. I guess it depends what
your first house is, isn't it because we bought well,
it's we love it, it's our home, but we love
(09:53):
the area. So to be honest, probably the next one
I buy will be, you know, the home I carkeetent
is that one of the one of the challenges to
the traditional idea of the property ladder is that some
people will often buy a house and they'll their investment
is not so much moving as renovating as well, because
(10:16):
that's what the goal is for us, is to keep
renovating it because there's a bit of work to do.
And you know, sometimes you do think maybe to be
easier if we just sold and bought something else.
Speaker 3 (10:24):
But well, if we just apply the idea of the
property ladder about to the renovation example you just gave
over time, people can typically do more and more stuff, right,
So if you think about all of the renovations you'd
ideally do to your property, you probably can't do everything
at the same time because it's just going to be very,
very expensive. So maybe you take a fifty thousand dollars
top up loan against your property to fund the first
(10:46):
phase of the renovations. You get those done, the value
of your properties increased, you gradually pay down that mortgage
over time, that fifty k top up loan as well
as the rest of you mortgage that you've probably got
after a while, let's say it's gone up in value
from those renovations. Because you look like you're a bit
of a handy kind of guy who might be able
to renovate, manage a renovation. Hosting this show, Tim.
Speaker 2 (11:08):
I actually, you know why I do a bit of
my own stuff because I worked out how much I
can save I do. I don't do my own jibbing
because I got it's something the builders can do quite easily,
and it's a bit of you know, save yourself blowing
a foo foo valve. But I do my own plastering
and painting and coving. And I taught myself on YouTube.
(11:30):
But I did that because well, I'm probably a tight ass.
Speaker 3 (11:35):
But the thing is, you can teach yourself anything on
YouTube these days.
Speaker 2 (11:38):
Now.
Speaker 3 (11:38):
This has got nothing to do with property. But I
remember when I popped my first tire, right I drove
over a nail or something at university and I thought,
oh gosh, you know what am I going to do?
I thought, oh, go on YouTube. Now. It probably took
me about an hour and a half to change that tire,
but I managed to get it done. So there we go.
You cared lute anything on YouTube these days.
Speaker 2 (11:58):
I just I love the fact that I just assume
you changed. You just did it intuitively. You look for
something that looks like a act and then you sort of
crank that up. But actually, probably changing a tire is
something you want to have an idea what you're doing.
Speaker 3 (12:11):
I studied economics. I've got no common sense, right, I
wouldn't have been able to figure that out. That's physical stuff.
Give me a spreadshet and I'd be able to figure
it out.
Speaker 2 (12:21):
Funny thing is, if this wasn't a property show, I
could turn that topic right now into about five hours
of talk. You know, the jobs you can teach yourself
to do or you need YouTube for. We'd love to
hear from you on this though. I eight one hundred
eighty ten eighty. Well, the basic question is is the
property ladder something? Is that the way you thought of
(12:42):
it when you bought your first property. It's like, this
is just our first one, and we're going to go
from strength to strength or house to house, and we
didn't kind of trade up as we go. Or do
you think that maybe has changed and that there's a
version of the property ladder which is maybe not buying
another house but improving the one you're in. I wait,
one hundred eighty ten eighty Also, have you moved lots
(13:02):
of times and was it literally a property ladder scenario
where you were looking to improve your the value of
where you were living, use the equity and the other
one to step up, maybe even keep the other one
as an investment property. Gosh, it does feel like those
days have changed a bit, doesn't it yet.
Speaker 3 (13:17):
Well, one of the reasons why that right now it
does feel like it has is because property prices, especially
in Auckland, have come down about twenty two to twenty
three percent. If you did buy at the top of
the market and you've seen your equity being wiped out,
you kind of feel stuck in the property you're in
right now. But if you started buying, let's say in
twenty ten, and you saw your property value go up
(13:39):
by quite a lot over the next five years and
you all of a sudden have this massive deposit in
your house, and originally you might have had a very
small deposit compared to your loan. Then that's changed because
maybe you've paid some of that mort good job, it's
gone up in value. That's where the trading up becomes
a lot more accessible. But in that downward market, if
you bought January twenty twenty two in Auckland, you probably
(14:01):
feel like it's not as much of a ladder but
a prison because you can't really at the moment because
you don't have much of it a positive you were
to sell.
Speaker 2 (14:08):
I think a lot of it also depends on when
you buy. So if you buy a property in your
you know, in your middle age, then you're probably less
likely to think of it as a as a property
latter scenario compared to someone who's a couple or or
I don't know why I say a couple, I guess
because maybe if you if you are a couple and
you bought together, it's part of building a life together,
you would imagine that that's the first home of at
(14:31):
least two or three, if not several.
Speaker 3 (14:34):
Yeah, I see that in my own situation, right, My
wife had a house down in christ It was a
very nice house for a first property, but then when
we moved up here, she sold that I was investing
in property. Then we've got into where we currently live,
but our bland probably is in seven years. If there
are a couple of little a little bit of a pet,
a patter of little feet, then you probably would decide
to trade up because you need a couple of fects
(14:54):
for pair dress.
Speaker 2 (14:55):
It feels like there's an announcement coming here. I'm loath
to read that. By the way, I found your next house,
which is our property of the week.
Speaker 3 (15:02):
I look forward to seeing that.
Speaker 2 (15:04):
Oh it is white something, but I don't want to.
I almost feel I can't read the first text message
that's come through, but it's quite funny from Ken. It
says buying your first house house is a bit like marriages.
Your first is new and exciting, but there's always going
to be another one. I think you Ken. Anyway, we'd
(15:27):
love to hear from you on this. How do you
view the property letter? Is it just something for you
where you'd just be happy to get your foot on
the bottom rung and hang in there for grim death
or life. What it would be or are you one
of those or you're looking at it and going well, no, no,
this is our plan. I've got it all mapped out.
We'll find that, we'll find a house, we'll start to
nudge the mortgage down of it. Then we'll look for
(15:48):
something else in five or ten years time. Eight hundred
and eighty ten eighty or is the lowest rung of
the property letter still something that you know is a
bit of a pipe train? Oh, eight hundred eighty ten
eighty text nine to nine two and we'll look forward
to you giving us a call on I eight hundred
eight ten eighty. Right, we'll be back in just the
tickets twenty two and a half past four. Yes, welcome
(16:08):
back to the One Roof radio show. The property Ladder.
Is it still a ladder? Or is it just a
ladder with one rung which I'm not going to climb
very far with that sort of letter? Is it anyway?
Ed mc knight's my guest, eight hundred and eighty ten
eighty Jack, Hello.
Speaker 4 (16:25):
Here you're going. Yeah, it's quite an interesting dynamics we're
in at the moment. Like the problem is is that
the standard of housing has got so high, so all
the ndlords have had to put so much money into
these houses now that like if you built a brand
new house and you built it for yourself, the standard
for yourself as lower than the standard that you put
(16:48):
in for a tenant. So now it's come to cost
an effect that to actually be a landlord. Look, I've
got one company that does two million dollars. We've got
two million dollars if Essex and it at It makes
forty five thousand dollars a year profit after Texas and
only got one hundred thousand dollars mortgages. So it's got
this not worth seeing in there.
Speaker 3 (17:09):
That's really interesting there, Jack, So two million dollars worth
of houses mortgage.
Speaker 2 (17:16):
This Sorry, we're just losing your Jack, and we've lost
you can call back if you're listening on the radio.
We just lost Jack there. For a second, I think
you went into a dead patch. But you were going
to say.
Speaker 3 (17:25):
It, well, it's quite interesting if you've got two million
bucks worth of houses and you've got only one hundred
k mortgage, that's nothing of a mortgage, right, so forty
five grand after taxes. I'm just calculating the numbers in
my head. If you were on say a four and
a half percent Grossie that's the average in New Zealand
that people get there to be ninety grand worth of
rent getting down to forty five thousand dollars after tax
(17:47):
as well. Actually, you might not be too far off
with those numbers because you've got operating costs of course.
Like so if you've got ninety grand worth of rent
coming in off those properties, by the time you pay
your rates, maintenance and assurance, that might easily be twenty
grand on that That gets you down to seventy grand
a petty on your tax rate, you could be down
at forty five thousand dollars. Those are the numbers.
Speaker 2 (18:06):
Hey, what he made a comment? Jack made a comment
there just about the standard being different. If you're building
a house for yourself, the standard is different to what
it would have to be if you were building as
a landlord. Is that because of what you have to
have in there? And that I don't understand that? Well,
what's that.
Speaker 3 (18:23):
There's a couple of things going on. So if you
rent out your property, it's going to meet the healthy
home standards. Now, nobody would disagree. I think with the
idea that it's important that landlords provide safe, warm, dry homes.
We want people living in healthy homes. I do have
an issue with the healthy home standards and that I
think it's a bit of a misnomer. And some of
the guidelines, or they're not guidelines, but some of the
(18:46):
requirements are at times too stringent. So for example, we've
seen people who want to change their own homes that
they've lived in quite happily for maybe five six years.
They want to turn them into a rental property. You've
got to go get a healthy homes assessment. Your property
that you happily lived in for six years yourself might
not meet the standards, the healthy home standard to get
it across the line. I was speaking to a property
(19:08):
investor the other day. They were going to move out
of their house, got the assessment done, but there's a
little bit of a draft across in some of the windows.
Where there's a little bit of a draft coming through. Now,
that never bothered them, right, but in order to rent
that out, they've got to replace the latchers. I mean,
I'll give you the example, Like my bedroom, right above
my bed, there's a little draft that comes through the window.
(19:31):
Doesn't bother me, But if I was going to rent
my house out, I would need to replace all of
those latchers. Same thing with heat pumps and lounges. So
you need to have a heat pump that is strong
enough that on the coldest day of the year, in
the middle of the night, right, So if the tenant
wants to go in there at two am in the
morning on the coldest day of the air, you have
to have enough heating to get that property up to
(19:52):
eighteen degrees even though it is the coldest point of
the year. Now, that often has meant that landlords have
put in quite supersized heat pumps in there, sometimes to
such a degree that our property management company says that, oh,
tenants won't even turn it on because they're too big
for the space. So sometimes it's just a bit overkill
in terms of the regulation in there. Do you know
what I mean? There's a difference between healthy home standards
(20:14):
and actually what is legitimately a normal person we call
a healthy funny what you get used to.
Speaker 2 (20:18):
I mean, just remember flatting in Dunedin. Oh my god,
I mean the flat we had in Dunedin with a
seventeen foot stud It was an old pub, so the
ceiling was as high, you know, with single just probably
a five millimeter thick piece of glass and sash windows
that probably didn't really close. But I must admit I
did probably get the odd chest infection that I just
thought you got in winter, but maybe that was actually
(20:40):
because it wasn't particularly flash place to flatten. Good place
for parties, of course. But anyway, now, so you actually
when you if yeah, the whole thing about building a place,
so it's landlords are different than tenants. If you were
building a place, actually, how would you sort of build
(21:02):
it with? What would you build it with? Is the
actual I'm trying to think of the word for it.
It's not the actual construction of a place, is it.
Speaker 3 (21:12):
No, it's about what goes in it. So we've actually
seen because we at Oprah's partners deal with property developers
all the time, right, so we might have somewhere between
four hundred and six hundred kiwis invest in property every
single year. And one thing that we when the Healthy
Home standards came out that we realized is not every
brand new property, even though it is brand new, not
(21:33):
every single property will meet the healthy Home standards, right,
And that's where Jack I think was getting into. So
there are a couple of things that might mean that
it doesn't meet it straight away. One example is the
heat pump that I just talked about. Another can be
if you've got an internal garage. Often the door between
the internal garage and the lounge might just be a
(21:55):
sliding door. Now, if there is too much of a
gap between the bottom of the sliding door and the ground,
then a little draft can come in, and so an
inspector might say, well, that's Healthy Homes compliant. Now, bear
in mind, it's a brand new house. It's just got
at CCC code compliance certificate. But there are I mean,
the healthy Home stands are so stringent that you might
(22:16):
need to do additional work even though it's brand new.
And I think that's where people like Jackie coming from
in terms of saying there's a lot more compliance than
there used to be. Now, some of that's good, right,
because I hate reading about the grubby landlords. And I
can say that because I'm a landlord. But the grubby
the grubby landlords who provide absolutely terrible accommodation for people
and rap off these poor tenants. Right, most people aren't
(22:39):
like that, but they're the ones you read about online
because you know, nice landlord provides safe house to tenant,
isn't a very good so.
Speaker 2 (22:48):
Very sexy head.
Speaker 3 (22:49):
Not a good head. You've got to get Betty too,
but he clicks on hereld premium.
Speaker 2 (22:52):
No, That's actually why I getic sometimes I find the
conversation when it comes to them, not one we've slightly
drifted sideways just for a second, but the conversation around
tenants and landlords it's always such a tribal one where
people talk about I mean, it's like the rhetoric we
hear from the Greens about you greedy landlords and a
tax break and all that sort of thing, which I
(23:14):
just find it that sort of politics of plea. I
don't know, it's politics of envy, and I think it
does a great disservice to everyone in the discussion because
there are good landlords, there are lousy landlords, there are
good tenants, and as we know, there are lousy tenants
as well. And this just this making an argument on
policy based on the side that you've hooked up with,
(23:35):
to me is just bs politics.
Speaker 3 (23:38):
Well, I tend to agree with that. It's a bit
like employers, right, there are great businesses and there are
bad businesses. There are good employers and good bosses, and
there are bad employers and bad bosses who really rip
people off. Turns out that one of those people ended
up being a green MP darling Tana. But that's okay.
So can I say that I don't face Maybe I
can't say that.
Speaker 2 (23:57):
I don't know.
Speaker 3 (23:57):
No, I've just where's the bleep butter bleep it out?
It's too late late, But I but I do agree
that it would be better if things were based were
just toned down a little bit. The interesting thing about
the tax break which you just mentioned, Tim.
Speaker 2 (24:14):
Is sorry, I didn't even mean to use those words.
It's a legitimate tax deduction, which one side of the
political aisle want to demonize. Yeah.
Speaker 3 (24:22):
Well, the thing that gets up my go around saying
that the change in interest reductibility, calling it a tax
carts or a tax break, I kind of don't like
that because you've got to remember that that policy was
only halfway phased in. So Labor had a four year
period where we were going to phase in these interest
deductibility rules. We were halfway through them. National in Act
(24:45):
always said that they didn't like it, and we're going
to reverse it. So then they did reverse it, And
what we often hear from some political parties is if
we didn't change that, we would have collected all of
that tax. But the truth of the matter is New
Zealand never collected all of that tax because the rules
weren't fully phased in, and so we just reversed those
and went back the old rules. Now is it a
(25:06):
tax cut, is it a tax break? Well, it is
relative to what would have happened if that policy fully
got phased in. But New Zealand never really collected the
full amount of tax that from that policy. Do you
know what I mean? Yes, anyway, I got on my soapbox.
I'll just hop off that for a moment.
Speaker 2 (25:24):
No, this is what you're here for. Ed you are
here to jump on the soapbox as often as you like.
Speaker 3 (25:30):
Back up then.
Speaker 2 (25:32):
I've got a few texts here, and I think this
one's just a sort of a brag about the property ladder.
I've got two million in cash invested in a high
interest offshore interest earning account getting two hundred and twenty
four thousand dollars a year net, even while the war
was on was on property. Even while the war was
on property is a loser investment I've got no tenants,
(25:55):
no work, I've got the money from properties and I
sold them all. I guess this person is saying I
did well when it was easy to do well, and
now I'm out. That's lee more into the sort of
discussion we often have about what the market's doing and
all that. But it's an interesting point actually that basically
they looked at and the right I'm out.
Speaker 3 (26:15):
Well, I've just got two points around that. The first
thing is, get earning two hundred and twenty four grand
after fees after tax on two million dollars worth of
equities is about an eleven percent risky after tax after
fees return. That'd be a highly risky investment, right. I mean,
good on them if they're making the money and those
risks are paying off. But I just don't want people
to think that that's that's a sort of normal return.
(26:38):
But generally speaking, I would agree with the sequencing of
what they're talking about. We often see that property is
a very good wealth builder because if you buy a
property that's worth five hundred k and you put in
your hundred thousand dollar deposit, so twenty percent deposit. If
it doubles in value, you made five hundred k off
your one hundred thousand dollar deposit and so often, And
(27:01):
so that's the leverage side, right, Like you use a
mortgage to buy property and doubles in value, you keep
all of those gains. You don't have to share them
with the bank, and at the moment, you don't really
have to share them with the taxman in most cases either.
So it's a really good way to build wealth. But
then when we're thinking about, Okay, I've made the money now,
and two million dollars is a great amount of money.
If I think about a lot of our clients at
(27:21):
opens where we create financial plans for them, two million bucks,
two and a half million bucks, that's what a lot
of people are aiming for, right, And so they build
their wealth and property. Then were like, all right, let's
get out of that time to live off it. Maybe
you put it into a really nice diversified managed fund
or investment portfolio, and you gradually spend it over time. Right,
that's a pretty normal way to sequence your investing.
Speaker 2 (27:42):
Is that actually what most property investors would do these
I mean would do now as they see property as
the intermediate sort of part of their investment strategy. And
then get out of it because low hassle, and just
get it into managed funds once you've made enough. How
many investors actually stay on the property ladder.
Speaker 3 (28:04):
Well, if we think about if we think about Jack's point,
he made a really good point that he had two
million dollars worth of property one point nine mil worth
of equity, and he's like, gosh, my cash flow return
is pretty low, right, And so that's why you You
typically can spend more money per year if you sell up,
put it into a nice, nice diversified investment portfolio, gradually
(28:25):
spend that over time. That's what we call the Nistig strategy,
or what I call it in the book. The other
strategy is the golden goose.
Speaker 2 (28:32):
That's what you call it in what book.
Speaker 3 (28:34):
In my book, Wealth Plan, I wrote a book a
couple of years ago. By the way, I'll.
Speaker 2 (28:38):
Give you, Yeah, where's where's my copy?
Speaker 3 (28:41):
I'll bring you a copy. I'll even sign it right there.
Speaker 2 (28:45):
That'll be. That'll be. That could be worth something one day.
Speaker 3 (28:48):
Pull prints it down. No, we're actually up to the
third print run.
Speaker 2 (28:52):
So so, gosh, flash, aren't you.
Speaker 3 (28:55):
Well we did about four or five thousand copies, which
is pretty good for New Zealand. But so we've got
the Nistig strategy where you sell up diversified portfolio gradually
spend it. The other one is what Jack's doing, which
is we call the Golden goose, which is you keep
your properties and you just live off the rental return. Now,
the good thing about that is you've always got your
(29:15):
house rather than gradually spending the money. And on top
of that, the other benefit is that rental income is
really really stable, right Like, typically, no matter what happens,
your tenants almost always pay the rent. And so while
it is typically a lower cash flow return because you've
got some tax in there, it can be quite stable.
So those are the two paths that you'd go down,
(29:36):
and we've kind of had two examples of that with
our correspondence today on the.
Speaker 2 (29:40):
Text bishon have We've got a few bits of crirespondence.
Cost time flies, isn't it? It's twenty one minutes to
five by the way, Just a little bit of trivia
for you when I mentioned first editions, because I like
to digress first editions of your book. I had a
caller the other day who we'd had a woman who
owned a second hand bookstore and one of my other
callers called up and said, oh, can you maybe get
her to ask I'm looking for a first edition of
(30:03):
Ian Fleming's Casino, because I'm quite keen to get a
copy of it. And I googled and I said, well,
unfortunate if she finds that you're not getting it, because
guess how much of a first edition of Cassino Roylsworth.
Speaker 3 (30:14):
Sixty five thousand American.
Speaker 2 (30:16):
One hundred and sixty six thousand American. Wow, really good copy.
That's what people are willing to pay. So just hang
on to that first edition of Wealth Planner seven dollar.
Speaker 3 (30:25):
Kindle guys, you'd be able to read the saved text.
Speaker 2 (30:28):
I don't think it's just about reading it. I think
it's about, you know, leaving it in the hot little hands. Anyway,
back in just a bit of trivia for you. Probably
not a bad investment if you can go back in time. Anyway,
it is twenty minutes to five news talks. He'd be
news Talks. He'd be with Tim Beverage. My guest is
Ed McKnight. We're talking about the property ladder in general,
and you know, how long are you staying it for?
(30:49):
And is it just one rung or are you one
of those people who go and I've been up twenty
rungs of the property ladder, you know, eight hundred and
eighty ten eighty is the number. David.
Speaker 5 (30:59):
Hello, Yeah, okay, guys, how are you good?
Speaker 2 (31:02):
Good things?
Speaker 3 (31:03):
Hey?
Speaker 5 (31:04):
I'm I'm a build and I'm also landlords, so I've
sort of got a not a unique but I've got
I've got a perspective on the on the building industry
and and how rentals go. And one of the interesting things,
you know, you were talking before about terrible landlords, renting,
renting slums, and a parent raised more or less what
(31:26):
we were talking about, allegedly allegedly. Well, listen, I've actually
in my building business. I've got a guy that works
works for us part time, so he's actually a building inspector.
So he's he's building and a building inspector. And we
have these sort of fairly heated discussions on a pretty
regular basis of that continuous improvement because you know, like
(31:47):
every time we build a house, the next time we
get an inspection, there's there's a new requirement, something that's
been updated or added or or whatever, you know, And
and and his defense of that as oh, you know,
we've got to continuously get better. And my my rebuttal
is that actually what we're doing is we're making houses
more and more extensive, and we're actually pricing them out
(32:07):
of most people's most people's grasp. And we're kind of
doing the same thing with rentals, you know, because every time,
like I have a particular target market with rentals, I'm
I'm looking at relatively low income people, and my preferences
people who's essentially whose rent is paid by the government
because they're they're pretty ambivalent about rent risers. So every
(32:30):
time the government say to me, I have to put
a bigger heat pump or more insulation or whatever, and
my properties, I do that and then then hydra like
up the rent to pay for those things.
Speaker 2 (32:41):
That's a really interesting That's an interesting philosophical argument, isn't it,
Because Yeah, your argument would be, look, there's got to
be a point where we go this is habitable, it's healthy,
full stop. We don't need to keep you know, pushing
the envelope.
Speaker 5 (32:55):
I mean, I'd actually go even further because when I
when my wife and I were first married, we actually
rented a house which after we moved out, was condemned
and demolished.
Speaker 3 (33:09):
And you were in love.
Speaker 5 (33:11):
Well, we specifically look for a house like that because
it allows us allowed us in six months to save
the deposit for our first time, because we're playing fifty
dollars a week for rent. And it was a it
was a genuine slum, and we thought, well, you know, like,
well if.
Speaker 2 (33:24):
You had to cuddle each other, you had to cuddle
each other title when it got cold. I mean, a
very cunning planet.
Speaker 3 (33:29):
David to ask you, though, how much extra Like I
assume you've been in the building industry for a bit,
but if we say, like the last ten years, how
much additional cost you reckon there is just from additional requirements.
Obviously the cost of building goes up because you know
what gets more expensive, job gets more expensive. But what
about these extra requirements, how much does the actually add.
Speaker 5 (33:53):
Well, actually, I haven't been in the building industry that long.
Actually I'm still on the printer's weirdy enough. I've really
just started in the last three years. So oh wow,
I've got a building company with a partner and I
decided to do it a pretty But that's.
Speaker 2 (34:07):
So interesting being at both ends of the spectrum.
Speaker 5 (34:09):
There, Yeah, yeah, yeah, but we had I've been a
farmer for twenty five dred years and I've decided to
go for a bit of a career change.
Speaker 2 (34:15):
And so you've been around the block a few times.
Speaker 5 (34:18):
Yeah, yeah, you've done a done a few bits and pieces.
But we do we're sort of doing something different now.
But I'm talking to my partner. He's been in it
for twenty years, and he is an interesting point. It's
not so much the cost of the extra materials, you know,
like the price of housing is going up because of
all those costs going up, but it's also the sort
of administrative cost you know. It's the it's the insulation costs,
(34:40):
you know, Like for instance, we have these the insulation
requirements have gone up recently, and one of the places
that causes the problem is out of the eves where
the insulation is up against the roof and there's this
little plastic strip we have to put in to keep
the insulation from touching the roofs. You know. Now that
costs i know two three, four hundred dollars per house,
(35:01):
and then it costs another couple of hundred bucks to
put it in. But it's just it's just a lit added,
you know, it's best by a thousand cuts kind of thing.
You know, like each individual thing doesn't seem like that much,
but when you add dozens and dozens of these things,
things like you know, the stud corners of a building,
we have to put polysty in blocks in there there.
Speaker 3 (35:21):
Well, here's one year as well, David, that I want
to ask you about. So, my brother in law is
a structural engineer, and one thing he was telling me
is that I've just changed them. So they've just changed.
So they've just changed the rules. I think maybe a
year or so ago, and he was talking about insulation
around the foundation. And I'll tell you what he told me,
and I want you to fact check it. He was
(35:43):
saying to me that you've now got to put some
sort of insulation around the foundation, but only something like
ten percent of heat is lost through the foundation because
heat naturally rises, and the insulation you've got to put
in has a twenty percent benefit, which means actually you're
only save two percent of heat that you would have
otherwise got or otherwise lost. What's your take on that?
(36:05):
Is that really happening? Or is he's an Italian man?
So is he he just talking Giberius.
Speaker 5 (36:10):
Well he's right and he is wrong. So yes, very
little heat is lost through the through the slab, and
most of the insulation systems that we put into slabs
are pretty ineffective, you know, so for the cost of them,
the net reward is pretty small. But one of the
things that happened when they made changes to the inslation
requirements recently is it went from a system where they
(36:33):
prescribed certain level of insulation and in your ceiling and
your walls and your slab to now you can it's
like a calculation method, which is is actually quite a
lot more flexible. So you can say, oh, well, in
my design, say I've got a scillion roof and it's
very difficult to get enough insulation there. I can make
that up by having more insulation in the walls, a
(36:55):
better slab, double glazing, or indeed, you can go the
other way. You can say, hey, I've got a really
good ceiling insulation, and so I can save some money
by head having small single blazed windows. So the the
insulation side of things has gotten a little bit more fexible.
I'd say, it's still it's still expensive and you need
(37:17):
you need somebody like a structural engineer to do all
the mathematics to calculate what you can and can't do.
But it does mean that certain designs can happen now
that couldn't happen before.
Speaker 2 (37:28):
Okay, hey, thanks, thanks for coming over. If we have
to leave it there because we've got to, we'll have
to go to a break and come back with one
with probably the week. But you can actually do an
interesting discussion for probably a bit longer than well, we
don't have the time now, but just about the whole
Healthy Home standards out if it keeps shifting and improving,
I mean, at what point do we say that's good
(37:48):
enough on the basics.
Speaker 3 (37:50):
Well, we haven't seen. We haven't seen the Healthy Home
standards get tighter. If anything, I believe we actually saw
them come back just a tensey bit around the heating
because they were a little bit overkill. But in terms
of the actual building standard, you would expect that it
has improved over time. One thing that I was just
thinking though, is I was listening to David, is the
premium you pay for a new build has been pretty
(38:12):
stable over time around It goes up and down, but
about six percent. So if we are building a like
requiring new builds to have more and more and more
and more stuff, which is absolutely the case. That probably
drags the price of all other houses up as well,
because then people think, oh, okay, well maybe I won't
pay that premium, I'll go buy an existing house, and
so that perhaps drags the out price of all the
(38:34):
other houses up as well.
Speaker 2 (38:35):
Right we've we're going to have to take a moment
and we'll come back with the one roof Property of
the week is a house I would really, really really love,
but if I won lotto, I possibly couldn't afford it.
But it is a spectacular property, the location, and we'll
be back with it in just a moment, because if
you just want to be a bit nosy and go
and have a look at the life the way the
(38:57):
other half live, then this is the property for me.
We'll be back in just the tickets eight and a
half minutes to five.
Speaker 1 (39:04):
The one roof of the week on the Weekend Collective.
Speaker 2 (39:08):
Yes, the one roof property of the week is an
a I'm going to give you the address right now.
You're go and have a look at it, because it
is I don't want to I don't mean this crudely,
but the expression it's property porn because it really is
just absolutely you've just got to go and have a
look at it. It's one of Auckland's finest waterfront residents.
Is so many people if you are if you've been
to Walkland, you've gone to the shore and you've had
to wander around the rocks at the tech in Takapoona,
(39:32):
the good chance you will have walked past this place
it is. It's described as a Cape cod inspired home
that's been reimagined by architect Jack McKinney. Six on suited bedrooms,
large home office. The one that stood out to my
producer he actually mildly had his attention. Then the home cinema.
It's like, oh, like the look of this is like
(39:52):
whether it had the cinema or not was no meant
nothing either way for me. But it is a stunning
The address is twenty nine many Haha Avenue in Takapoona,
six bedroom, six bathroom, six car garage and I think
the rate of all value, we don't know how much
it is, but the rate of all value was around
twelve million. I think, so ed you're next time probably
(40:15):
allowed to step.
Speaker 3 (40:16):
Up there's gotta be quite a few rungs having to
be climbed, right, I think, you know, there might be
about a thousand rungs for me to get on there.
But one thing that stuck out to me, about six
hundred meters squared is that property. Now, if I think
about some of the properties I own, they might be
seventy square meters if it's like a small rental. My
(40:36):
own house I think is about two hundred and thirty something.
There's probably be about three times the size of the house. Right.
Speaker 2 (40:42):
It is gorgeous. Interestingly, they staged it with twenty seconds
to go. Interestingly, they staged it with no furniture. Normally
you'd see your house dressed up, but it's maybe they're
letting you know how much space you've got, which is
a lot. Anyway, Go and check it out. Gorgeous property
twenty nine minute. Ha ha. If you win lotto you
might just be able to afford it.
Speaker 3 (41:00):
Hey, ed, good to see you mate, Thanks for having me, Tim.
We'll see you next time.
Speaker 2 (41:03):
Yep. Sarah chat one next for the repaired Squad.
Speaker 1 (41:06):
For more from the weekend collective, listen live to news
Talk ZEDB weekends from three pm or follow the podcast
on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks,
B Cues, food, where unsmooth.
Speaker 2 (00:42):
And welcome back or welcome in the Weekend Collective. I'm
Tim Beverte. I must be with the Heavy Rockets, having
given Taylor Swift a hard time. IBE wish you need
to start the next hour with a bit of tay
or not, I don't know anyway. Welcome to, welcome in
if you have, if you are just joining us, or
welcome back. And this is the one roof radio show,
and this is the moment we want your calls. We
(01:03):
invite you to join the comversation. Gosh, that sounds so formal,
but I do say as opposed to we want your cause. Literally,
it's just about joining the conversation. You don't have to
have the answer to the meaning of life. You can
just come in and join us and add your two
pen tuppenny whatever the expressions I've forgotten now my guest
to probably correct me on that one, but just add
what you reckon and we'd love you to join us.
(01:23):
On eight hundred and eighty ten eighty text nine nine two.
So we're going to kick off with but just before
I introduce my guest the property. You know, it's been
the golden Goose in New Zealand for for a long time.
And there's always this expression about getting onto the property ladder.
Speaker 3 (01:43):
And I've never.
Speaker 2 (01:45):
Actually really thought of what the property ladder was. I
guess maybe I was thinking if you I've got a
metaphor in my mind that you're you're raging around in
the sea and somebody throws a ladder down and you
grab onto that ladder because you just need to get
on before you get washed away, and that's the end
of view. That's a metaphor I have for the property ladder,
But I've never really thought about it as as being
(02:05):
something you've just got to get onto and cling to.
But I sometimes wonder whether the property ladder for most
people is just one rung. You just get on it
and you hang on there with your eighty or ninety
percent mortgage. And as opposed, I think probably I'm guessing
the property ladder is you get on the first rung
and the eventually you progress. But of course these days,
people you know, often especially if you bought in twenty
(02:28):
twenty one sort of around the time spending so much
on a house, is there such a thing as the
property leader and what the hell is it? I don't know.
We're also going to dig into a little bit there's
been I think Tony Alexander talked about when the property
market might revive a little. He didn't actually he didn't
play his cards overplay the cards on that, but he
(02:48):
talked about twenty twenty seven there'd be maybe something of
a revival. And I think the caveat was going to
be that it wasn't necessarily going to be rocking and
rolling like we've seen it before. But we're going to
dig into that as well, but to discuss what on
earth to think of it as something we just get
on first and then move up. Do you buy your
first house thinking this is going to be the first
of five? My parents, I think I following their example,
(03:11):
they built a house in Rotaua and then I don't
know why we moved. We moved. We were one seventy
of a particular rod ll it doesn't matter, we're not
there any longer. We were in Coah Point Road. We
moved from one seventy to one eighty and I never
understood why we moved to one eighty, but I think
it was because it was less land to manage. But
that's that was it. And then they oh, that's right.
(03:32):
Then they moved to Walkland and retired, et cetera. Not
many people moved to Walkland to retire. That was another
strange one. Anyway, What the hell is the property ladder?
And to discuss that with me?
Speaker 1 (03:43):
Is?
Speaker 2 (03:43):
He's resident economist for Op's Partners. He also features on
his own podcast, It's Ed McKnight. Good a Ed. How
are you going?
Speaker 3 (03:49):
Oh great to be here, Tim, And it's wonderful to
talk about the property leader with you guys with you today?
Speaker 2 (03:55):
Actually, did you like my metaphor? I've been reading Showgun
and there's there's a bit where there's a shipwreck and
they're getting washed onto the shore and then they have
to sort of throw down a rope to someone before
they get washed out to see to grab onto it
and to climb up the cliff. And I think I've
always thought of the property ladder as been this tumultuous
(04:17):
sea of uncertainty, and that's some stage to reach for it,
grab the letter. That's my analogy.
Speaker 3 (04:23):
Well I must have been. I've never thought of it
quite that way. But one thing, because I'm a bit
curious like you. Sometimes you hear these phrases and you're like,
where does that actually come from? Well, I went and
found out. So according to the dictionary, it came up
in nineteen forty one.
Speaker 2 (04:38):
You went and found out. So I went to the dictionary.
Speaker 3 (04:41):
That's right, Oxford English Dictionary. They actually put that phrase
property letter nineteen forty one in a paperby I'm going
to absolutely butcher this guy's name because it's in French. Tim,
But you're I'll have a crack. You're more of alerted
man than me.
Speaker 2 (04:55):
So well, I was wondering what that expression was. You know,
a tupenny. You know what was that expression I used before?
I've forgotten already.
Speaker 3 (05:02):
Look you don't know, and neither do I. So we
just want correct one of your toppens on that that's it.
But as they was, Francois Lafite, Edie wrote, pass me.
Speaker 2 (05:11):
That bit of paper.
Speaker 3 (05:14):
Who was it, Francoise't it hang on where it's at
the top of the piece of paper.
Speaker 2 (05:21):
Oh, Francois Lafitte.
Speaker 3 (05:23):
Oh it's pretty close.
Speaker 2 (05:24):
Francois Lafite.
Speaker 3 (05:27):
I'll take that.
Speaker 2 (05:28):
I think you've treated him like it's an Italian name.
Speaker 3 (05:30):
Hey, the listeners aren't here to hear two middle aged
white guys talk about absolutely butcher the French language. But
here we go. Anyway. He coined that in the Eugenics
Review of all Things, which I was like, oh, whenever
I hear you didn't so I just think of scientology.
Speaker 2 (05:45):
He would have known my cousin, Lord William Beveridge, who
was wrote the Beverage Report, which was the foundation of
the Social Welfare and then and the National Health Service
which we adopted here, but it was also a eugenicist.
Speaker 3 (05:58):
Is that right?
Speaker 2 (05:58):
Yeah? Yeah, fun fact for you. I'll tell you what
if you have come for fun facts. The One Roof
radio show was the place to go. How much have
we covered?
Speaker 3 (06:08):
We've covered a lot, but also not very much at
the same time. And basically the idea of the property
letter though, is that you do get on and you
buy a starter home and you pay off a bit
of the mortgage and the property goes up in value
and maybe it's a bit smaller, but by the time
you've built a bit of equity in there, maybe you've
had a kid, you've got your second one on the way,
(06:29):
so you sell that because you need an extra bedroom.
Now you're in a three bedroom property. You're living it
for it, but maybe you do some renovations. All I've
added it on sweet because now, oh, well, gosh, the
wife's pregnant again. We needed we need a beggar house.
It over several decades again, well you see, you see, Tim,
I know my wife's listening to this, but where no,
(06:52):
she's not pregnant. They get excited. I'd be excited if
she was.
Speaker 2 (06:56):
I thought you're about to drop the do the public reveal.
Speaker 3 (06:58):
Well, well give me six months and we'll see what
we can do for you.
Speaker 2 (07:03):
Tim forgotten what we were talking about.
Speaker 3 (07:07):
Ladder, Yeah, lafite And so what ends up happening is
you trade up over time. And it's quite funny because
we often when we're talking about the property ladder, we
do look at our parents and see what happened with them,
because they've been in property for a lot longer than
obviously us kids have been, no matter how old we
are as kids. And if I think about it, my
parents started out in Harwarda. I mean you threw out
(07:30):
one hundred and seventy whatever road it was, I'll throw
out our and I think we were Camberwell Road and
after a while that happened. I was on the way.
I was born in that property. This is a property
and the property my mum was a natural mother and
she was really into home booth, so anyway, I was
born there. Then we sold that up because obviously that
wasn't that important to them, and we moved to a
(07:51):
different property. Then they upgraded again, and they eventually got divorced,
we upgraded again, and eventually you trade up houses over time.
The average person says about seven to ten years within
their property right. So if you're starting out in the
average amberage of a first home buyer is about thirty
six in New Zealand at the moment, So if you
go thirty six to sixty six, you might have three
or four properties in your lifetime. If you were to
(08:13):
follow those averages right and over time, hopefully you might
be upgrading. So that effectively is the property letter. I
think it is still a useful way of thinking about property.
And the reason behind that is that often when we're
talking to first home buyers, we say to them, hey, look,
just manage your expectations around what you're going to buy.
(08:36):
You're not going to have what your parents have right now.
Because they might have traded up a few times as
they've paid off their mortgage, their incomes might have risen
as they've progressed through the workforce over time, and so
you might start out with just an entry level home
and eventually trade up. I actually say it with my
sister and her partner. He bought when he was about
(08:57):
eighteen nineteen years old, a small two bedroom home in Inglewood,
of all places, that's just about maybe fifteen minutes south
of New Plymouth. After a while, I mean, I don't
know why Inglewood house prices went up, but they did.
They ended up selling, and they traded up to a
nicer part a few Plymouth. Then they had that for
a while, they ended up selling that we're looking at
a different property in a different part of town, and
(09:19):
so you do tend to see that buying and selling
over time.
Speaker 2 (09:23):
I guess the question, you know, what did you what
the statue gave there about how often people would buy
and sell.
Speaker 3 (09:29):
Seven to ten years ten years.
Speaker 2 (09:31):
So if you were to buy a house in your twenties,
I don't actually how many people what percentage of people
are buying house in their twenties, but so you anticipate
I mean, in fact, I think I remember the number
being most the average number of people moved four or
five times in their lives. I guess it depends what
your first house is, isn't it because we bought well,
it's we love it, it's our home, but we love
(09:53):
the area. So to be honest, probably the next one
I buy will be, you know, the home I carkeetent
is that one of the one of the challenges to
the traditional idea of the property ladder is that some
people will often buy a house and they'll their investment
is not so much moving as renovating as well, because
(10:16):
that's what the goal is for us, is to keep
renovating it because there's a bit of work to do.
And you know, sometimes you do think maybe to be
easier if we just sold and bought something else.
Speaker 3 (10:24):
But well, if we just apply the idea of the
property ladder about to the renovation example you just gave
over time, people can typically do more and more stuff, right,
So if you think about all of the renovations you'd
ideally do to your property, you probably can't do everything
at the same time because it's just going to be very,
very expensive. So maybe you take a fifty thousand dollars
top up loan against your property to fund the first
(10:46):
phase of the renovations. You get those done, the value
of your properties increased, you gradually pay down that mortgage
over time, that fifty k top up loan as well
as the rest of you mortgage that you've probably got
after a while, let's say it's gone up in value
from those renovations. Because you look like you're a bit
of a handy kind of guy who might be able
to renovate, manage a renovation. Hosting this show, Tim.
Speaker 2 (11:08):
I actually, you know why I do a bit of
my own stuff because I worked out how much I
can save I do. I don't do my own jibbing
because I got it's something the builders can do quite easily,
and it's a bit of you know, save yourself blowing
a foo foo valve. But I do my own plastering
and painting and coving. And I taught myself on YouTube.
(11:30):
But I did that because well, I'm probably a tight ass.
Speaker 3 (11:35):
But the thing is, you can teach yourself anything on
YouTube these days.
Speaker 2 (11:38):
Now.
Speaker 3 (11:38):
This has got nothing to do with property. But I
remember when I popped my first tire, right I drove
over a nail or something at university and I thought,
oh gosh, you know what am I going to do?
I thought, oh, go on YouTube. Now. It probably took
me about an hour and a half to change that tire,
but I managed to get it done. So there we go.
You cared lute anything on YouTube these days.
Speaker 2 (11:58):
I just I love the fact that I just assume
you changed. You just did it intuitively. You look for
something that looks like a act and then you sort of
crank that up. But actually, probably changing a tire is
something you want to have an idea what you're doing.
Speaker 3 (12:11):
I studied economics. I've got no common sense, right, I
wouldn't have been able to figure that out. That's physical stuff.
Give me a spreadshet and I'd be able to figure
it out.
Speaker 2 (12:21):
Funny thing is, if this wasn't a property show, I
could turn that topic right now into about five hours
of talk. You know, the jobs you can teach yourself
to do or you need YouTube for. We'd love to
hear from you on this though. I eight one hundred
eighty ten eighty. Well, the basic question is is the
property ladder something? Is that the way you thought of
(12:42):
it when you bought your first property. It's like, this
is just our first one, and we're going to go
from strength to strength or house to house, and we
didn't kind of trade up as we go. Or do
you think that maybe has changed and that there's a
version of the property ladder which is maybe not buying
another house but improving the one you're in. I wait,
one hundred eighty ten eighty Also, have you moved lots
(13:02):
of times and was it literally a property ladder scenario
where you were looking to improve your the value of
where you were living, use the equity and the other
one to step up, maybe even keep the other one
as an investment property. Gosh, it does feel like those
days have changed a bit, doesn't it yet.
Speaker 3 (13:17):
Well, one of the reasons why that right now it
does feel like it has is because property prices, especially
in Auckland, have come down about twenty two to twenty
three percent. If you did buy at the top of
the market and you've seen your equity being wiped out,
you kind of feel stuck in the property you're in
right now. But if you started buying, let's say in
twenty ten, and you saw your property value go up
(13:39):
by quite a lot over the next five years and
you all of a sudden have this massive deposit in
your house, and originally you might have had a very
small deposit compared to your loan. Then that's changed because
maybe you've paid some of that mort good job, it's
gone up in value. That's where the trading up becomes
a lot more accessible. But in that downward market, if
you bought January twenty twenty two in Auckland, you probably
(14:01):
feel like it's not as much of a ladder but
a prison because you can't really at the moment because
you don't have much of it a positive you were
to sell.
Speaker 2 (14:08):
I think a lot of it also depends on when
you buy. So if you buy a property in your
you know, in your middle age, then you're probably less
likely to think of it as a as a property
latter scenario compared to someone who's a couple or or
I don't know why I say a couple, I guess
because maybe if you if you are a couple and
you bought together, it's part of building a life together,
you would imagine that that's the first home of at
(14:31):
least two or three, if not several.
Speaker 3 (14:34):
Yeah, I see that in my own situation, right, My
wife had a house down in christ It was a
very nice house for a first property, but then when
we moved up here, she sold that I was investing
in property. Then we've got into where we currently live,
but our bland probably is in seven years. If there
are a couple of little a little bit of a pet,
a patter of little feet, then you probably would decide
to trade up because you need a couple of fects
(14:54):
for pair dress.
Speaker 2 (14:55):
It feels like there's an announcement coming here. I'm loath
to read that. By the way, I found your next house,
which is our property of the week.
Speaker 3 (15:02):
I look forward to seeing that.
Speaker 2 (15:04):
Oh it is white something, but I don't want to.
I almost feel I can't read the first text message
that's come through, but it's quite funny from Ken. It
says buying your first house house is a bit like marriages.
Your first is new and exciting, but there's always going
to be another one. I think you Ken. Anyway, we'd
(15:27):
love to hear from you on this. How do you
view the property letter? Is it just something for you
where you'd just be happy to get your foot on
the bottom rung and hang in there for grim death
or life. What it would be or are you one
of those or you're looking at it and going well, no, no,
this is our plan. I've got it all mapped out.
We'll find that, we'll find a house, we'll start to
nudge the mortgage down of it. Then we'll look for
(15:48):
something else in five or ten years time. Eight hundred
and eighty ten eighty or is the lowest rung of
the property letter still something that you know is a
bit of a pipe train? Oh, eight hundred eighty ten
eighty text nine to nine two and we'll look forward
to you giving us a call on I eight hundred
eight ten eighty. Right, we'll be back in just the
tickets twenty two and a half past four. Yes, welcome
(16:08):
back to the One Roof radio show. The property Ladder.
Is it still a ladder? Or is it just a
ladder with one rung which I'm not going to climb
very far with that sort of letter? Is it anyway?
Ed mc knight's my guest, eight hundred and eighty ten
eighty Jack, Hello.
Speaker 4 (16:25):
Here you're going. Yeah, it's quite an interesting dynamics we're
in at the moment. Like the problem is is that
the standard of housing has got so high, so all
the ndlords have had to put so much money into
these houses now that like if you built a brand
new house and you built it for yourself, the standard
for yourself as lower than the standard that you put
(16:48):
in for a tenant. So now it's come to cost
an effect that to actually be a landlord. Look, I've
got one company that does two million dollars. We've got
two million dollars if Essex and it at It makes
forty five thousand dollars a year profit after Texas and
only got one hundred thousand dollars mortgages. So it's got
this not worth seeing in there.
Speaker 3 (17:09):
That's really interesting there, Jack, So two million dollars worth
of houses mortgage.
Speaker 2 (17:16):
This Sorry, we're just losing your Jack, and we've lost
you can call back if you're listening on the radio.
We just lost Jack there. For a second, I think
you went into a dead patch. But you were going
to say.
Speaker 3 (17:25):
It, well, it's quite interesting if you've got two million
bucks worth of houses and you've got only one hundred
k mortgage, that's nothing of a mortgage, right, so forty
five grand after taxes. I'm just calculating the numbers in
my head. If you were on say a four and
a half percent Grossie that's the average in New Zealand
that people get there to be ninety grand worth of
rent getting down to forty five thousand dollars after tax
(17:47):
as well. Actually, you might not be too far off
with those numbers because you've got operating costs of course.
Like so if you've got ninety grand worth of rent
coming in off those properties, by the time you pay
your rates, maintenance and assurance, that might easily be twenty
grand on that That gets you down to seventy grand
a petty on your tax rate, you could be down
at forty five thousand dollars. Those are the numbers.
Speaker 2 (18:06):
Hey, what he made a comment? Jack made a comment
there just about the standard being different. If you're building
a house for yourself, the standard is different to what
it would have to be if you were building as
a landlord. Is that because of what you have to
have in there? And that I don't understand that? Well,
what's that.
Speaker 3 (18:23):
There's a couple of things going on. So if you
rent out your property, it's going to meet the healthy
home standards. Now, nobody would disagree. I think with the
idea that it's important that landlords provide safe, warm, dry homes.
We want people living in healthy homes. I do have
an issue with the healthy home standards and that I
think it's a bit of a misnomer. And some of
the guidelines, or they're not guidelines, but some of the
(18:46):
requirements are at times too stringent. So for example, we've
seen people who want to change their own homes that
they've lived in quite happily for maybe five six years.
They want to turn them into a rental property. You've
got to go get a healthy homes assessment. Your property
that you happily lived in for six years yourself might
not meet the standards, the healthy home standard to get
it across the line. I was speaking to a property
(19:08):
investor the other day. They were going to move out
of their house, got the assessment done, but there's a
little bit of a draft across in some of the windows.
Where there's a little bit of a draft coming through. Now,
that never bothered them, right, but in order to rent
that out, they've got to replace the latchers. I mean,
I'll give you the example, Like my bedroom, right above
my bed, there's a little draft that comes through the window.
(19:31):
Doesn't bother me, But if I was going to rent
my house out, I would need to replace all of
those latchers. Same thing with heat pumps and lounges. So
you need to have a heat pump that is strong
enough that on the coldest day of the year, in
the middle of the night, right, So if the tenant
wants to go in there at two am in the
morning on the coldest day of the air, you have
to have enough heating to get that property up to
(19:52):
eighteen degrees even though it is the coldest point of
the year. Now, that often has meant that landlords have
put in quite supersized heat pumps in there, sometimes to
such a degree that our property management company says that, oh,
tenants won't even turn it on because they're too big
for the space. So sometimes it's just a bit overkill
in terms of the regulation in there. Do you know
what I mean? There's a difference between healthy home standards
(20:14):
and actually what is legitimately a normal person we call
a healthy funny what you get used to.
Speaker 2 (20:18):
I mean, just remember flatting in Dunedin. Oh my god,
I mean the flat we had in Dunedin with a
seventeen foot stud It was an old pub, so the
ceiling was as high, you know, with single just probably
a five millimeter thick piece of glass and sash windows
that probably didn't really close. But I must admit I
did probably get the odd chest infection that I just
thought you got in winter, but maybe that was actually
(20:40):
because it wasn't particularly flash place to flatten. Good place
for parties, of course. But anyway, now, so you actually
when you if yeah, the whole thing about building a place,
so it's landlords are different than tenants. If you were
building a place, actually, how would you sort of build
(21:02):
it with? What would you build it with? Is the
actual I'm trying to think of the word for it.
It's not the actual construction of a place, is it.
Speaker 3 (21:12):
No, it's about what goes in it. So we've actually
seen because we at Oprah's partners deal with property developers
all the time, right, so we might have somewhere between
four hundred and six hundred kiwis invest in property every
single year. And one thing that we when the Healthy
Home standards came out that we realized is not every
brand new property, even though it is brand new, not
(21:33):
every single property will meet the healthy Home standards, right,
And that's where Jack I think was getting into. So
there are a couple of things that might mean that
it doesn't meet it straight away. One example is the
heat pump that I just talked about. Another can be
if you've got an internal garage. Often the door between
the internal garage and the lounge might just be a
(21:55):
sliding door. Now, if there is too much of a
gap between the bottom of the sliding door and the ground,
then a little draft can come in, and so an
inspector might say, well, that's Healthy Homes compliant. Now, bear
in mind, it's a brand new house. It's just got
at CCC code compliance certificate. But there are I mean,
the healthy Home stands are so stringent that you might
(22:16):
need to do additional work even though it's brand new.
And I think that's where people like Jackie coming from
in terms of saying there's a lot more compliance than
there used to be. Now, some of that's good, right,
because I hate reading about the grubby landlords. And I
can say that because I'm a landlord. But the grubby
the grubby landlords who provide absolutely terrible accommodation for people
and rap off these poor tenants. Right, most people aren't
(22:39):
like that, but they're the ones you read about online
because you know, nice landlord provides safe house to tenant,
isn't a very good so.
Speaker 2 (22:48):
Very sexy head.
Speaker 3 (22:49):
Not a good head. You've got to get Betty too,
but he clicks on hereld premium.
Speaker 2 (22:52):
No, That's actually why I getic sometimes I find the
conversation when it comes to them, not one we've slightly
drifted sideways just for a second, but the conversation around
tenants and landlords it's always such a tribal one where
people talk about I mean, it's like the rhetoric we
hear from the Greens about you greedy landlords and a
tax break and all that sort of thing, which I
(23:14):
just find it that sort of politics of plea. I
don't know, it's politics of envy, and I think it
does a great disservice to everyone in the discussion because
there are good landlords, there are lousy landlords, there are
good tenants, and as we know, there are lousy tenants
as well. And this just this making an argument on
policy based on the side that you've hooked up with,
(23:35):
to me is just bs politics.
Speaker 3 (23:38):
Well, I tend to agree with that. It's a bit
like employers, right, there are great businesses and there are
bad businesses. There are good employers and good bosses, and
there are bad employers and bad bosses who really rip
people off. Turns out that one of those people ended
up being a green MP darling Tana. But that's okay.
So can I say that I don't face Maybe I
can't say that.
Speaker 2 (23:57):
I don't know.
Speaker 3 (23:57):
No, I've just where's the bleep butter bleep it out?
It's too late late, But I but I do agree
that it would be better if things were based were
just toned down a little bit. The interesting thing about
the tax break which you just mentioned, Tim.
Speaker 2 (24:14):
Is sorry, I didn't even mean to use those words.
It's a legitimate tax deduction, which one side of the
political aisle want to demonize. Yeah.
Speaker 3 (24:22):
Well, the thing that gets up my go around saying
that the change in interest reductibility, calling it a tax
carts or a tax break, I kind of don't like
that because you've got to remember that that policy was
only halfway phased in. So Labor had a four year
period where we were going to phase in these interest
deductibility rules. We were halfway through them. National in Act
(24:45):
always said that they didn't like it, and we're going
to reverse it. So then they did reverse it, And
what we often hear from some political parties is if
we didn't change that, we would have collected all of
that tax. But the truth of the matter is New
Zealand never collected all of that tax because the rules
weren't fully phased in, and so we just reversed those
and went back the old rules. Now is it a
(25:06):
tax cut, is it a tax break? Well, it is
relative to what would have happened if that policy fully
got phased in. But New Zealand never really collected the
full amount of tax that from that policy. Do you
know what I mean? Yes, anyway, I got on my soapbox.
I'll just hop off that for a moment.
Speaker 2 (25:24):
No, this is what you're here for. Ed you are
here to jump on the soapbox as often as you like.
Speaker 3 (25:30):
Back up then.
Speaker 2 (25:32):
I've got a few texts here, and I think this
one's just a sort of a brag about the property ladder.
I've got two million in cash invested in a high
interest offshore interest earning account getting two hundred and twenty
four thousand dollars a year net, even while the war
was on was on property. Even while the war was
on property is a loser investment I've got no tenants,
(25:55):
no work, I've got the money from properties and I
sold them all. I guess this person is saying I
did well when it was easy to do well, and
now I'm out. That's lee more into the sort of
discussion we often have about what the market's doing and
all that. But it's an interesting point actually that basically
they looked at and the right I'm out.
Speaker 3 (26:15):
Well, I've just got two points around that. The first
thing is, get earning two hundred and twenty four grand
after fees after tax on two million dollars worth of
equities is about an eleven percent risky after tax after
fees return. That'd be a highly risky investment, right. I mean,
good on them if they're making the money and those
risks are paying off. But I just don't want people
to think that that's that's a sort of normal return.
(26:38):
But generally speaking, I would agree with the sequencing of
what they're talking about. We often see that property is
a very good wealth builder because if you buy a
property that's worth five hundred k and you put in
your hundred thousand dollar deposit, so twenty percent deposit. If
it doubles in value, you made five hundred k off
your one hundred thousand dollar deposit and so often, And
(27:01):
so that's the leverage side, right, Like you use a
mortgage to buy property and doubles in value, you keep
all of those gains. You don't have to share them
with the bank, and at the moment, you don't really
have to share them with the taxman in most cases either.
So it's a really good way to build wealth. But
then when we're thinking about, Okay, I've made the money now,
and two million dollars is a great amount of money.
If I think about a lot of our clients at
(27:21):
opens where we create financial plans for them, two million bucks,
two and a half million bucks, that's what a lot
of people are aiming for, right, And so they build
their wealth and property. Then were like, all right, let's
get out of that time to live off it. Maybe
you put it into a really nice diversified managed fund
or investment portfolio, and you gradually spend it over time. Right,
that's a pretty normal way to sequence your investing.
Speaker 2 (27:42):
Is that actually what most property investors would do these
I mean would do now as they see property as
the intermediate sort of part of their investment strategy. And
then get out of it because low hassle, and just
get it into managed funds once you've made enough. How
many investors actually stay on the property ladder.
Speaker 3 (28:04):
Well, if we think about if we think about Jack's point,
he made a really good point that he had two
million dollars worth of property one point nine mil worth
of equity, and he's like, gosh, my cash flow return
is pretty low, right, And so that's why you You
typically can spend more money per year if you sell up,
put it into a nice, nice diversified investment portfolio, gradually
(28:25):
spend that over time. That's what we call the Nistig strategy,
or what I call it in the book. The other
strategy is the golden goose.
Speaker 2 (28:32):
That's what you call it in what book.
Speaker 3 (28:34):
In my book, Wealth Plan, I wrote a book a
couple of years ago. By the way, I'll.
Speaker 2 (28:38):
Give you, Yeah, where's where's my copy?
Speaker 3 (28:41):
I'll bring you a copy. I'll even sign it right there.
Speaker 2 (28:45):
That'll be. That'll be. That could be worth something one day.
Speaker 3 (28:48):
Pull prints it down. No, we're actually up to the
third print run.
Speaker 2 (28:52):
So so, gosh, flash, aren't you.
Speaker 3 (28:55):
Well we did about four or five thousand copies, which
is pretty good for New Zealand. But so we've got
the Nistig strategy where you sell up diversified portfolio gradually
spend it. The other one is what Jack's doing, which
is we call the Golden goose, which is you keep
your properties and you just live off the rental return. Now,
the good thing about that is you've always got your
(29:15):
house rather than gradually spending the money. And on top
of that, the other benefit is that rental income is
really really stable, right Like, typically, no matter what happens,
your tenants almost always pay the rent. And so while
it is typically a lower cash flow return because you've
got some tax in there, it can be quite stable.
So those are the two paths that you'd go down,
(29:36):
and we've kind of had two examples of that with
our correspondence today on the.
Speaker 2 (29:40):
Text bishon have We've got a few bits of crirespondence.
Cost time flies, isn't it? It's twenty one minutes to
five by the way, Just a little bit of trivia
for you when I mentioned first editions, because I like
to digress first editions of your book. I had a
caller the other day who we'd had a woman who
owned a second hand bookstore and one of my other
callers called up and said, oh, can you maybe get
her to ask I'm looking for a first edition of
(30:03):
Ian Fleming's Casino, because I'm quite keen to get a
copy of it. And I googled and I said, well,
unfortunate if she finds that you're not getting it, because
guess how much of a first edition of Cassino Roylsworth.
Speaker 3 (30:14):
Sixty five thousand American.
Speaker 2 (30:16):
One hundred and sixty six thousand American. Wow, really good copy.
That's what people are willing to pay. So just hang
on to that first edition of Wealth Planner seven dollar.
Speaker 3 (30:25):
Kindle guys, you'd be able to read the saved text.
Speaker 2 (30:28):
I don't think it's just about reading it. I think
it's about, you know, leaving it in the hot little hands. Anyway,
back in just a bit of trivia for you. Probably
not a bad investment if you can go back in time. Anyway,
it is twenty minutes to five news talks. He'd be
news Talks. He'd be with Tim Beverage. My guest is
Ed McKnight. We're talking about the property ladder in general,
and you know, how long are you staying it for?
(30:49):
And is it just one rung or are you one
of those people who go and I've been up twenty
rungs of the property ladder, you know, eight hundred and
eighty ten eighty is the number. David.
Speaker 5 (30:59):
Hello, Yeah, okay, guys, how are you good?
Speaker 2 (31:02):
Good things?
Speaker 3 (31:03):
Hey?
Speaker 5 (31:04):
I'm I'm a build and I'm also landlords, so I've
sort of got a not a unique but I've got
I've got a perspective on the on the building industry
and and how rentals go. And one of the interesting things,
you know, you were talking before about terrible landlords, renting,
renting slums, and a parent raised more or less what
(31:26):
we were talking about, allegedly allegedly. Well, listen, I've actually
in my building business. I've got a guy that works
works for us part time, so he's actually a building inspector.
So he's he's building and a building inspector. And we
have these sort of fairly heated discussions on a pretty
regular basis of that continuous improvement because you know, like
(31:47):
every time we build a house, the next time we
get an inspection, there's there's a new requirement, something that's
been updated or added or or whatever, you know, And
and and his defense of that as oh, you know,
we've got to continuously get better. And my my rebuttal
is that actually what we're doing is we're making houses
more and more extensive, and we're actually pricing them out
(32:07):
of most people's most people's grasp. And we're kind of
doing the same thing with rentals, you know, because every time,
like I have a particular target market with rentals, I'm
I'm looking at relatively low income people, and my preferences
people who's essentially whose rent is paid by the government
because they're they're pretty ambivalent about rent risers. So every
(32:30):
time the government say to me, I have to put
a bigger heat pump or more insulation or whatever, and
my properties, I do that and then then hydra like
up the rent to pay for those things.
Speaker 2 (32:41):
That's a really interesting That's an interesting philosophical argument, isn't it,
Because Yeah, your argument would be, look, there's got to
be a point where we go this is habitable, it's healthy,
full stop. We don't need to keep you know, pushing
the envelope.
Speaker 5 (32:55):
I mean, I'd actually go even further because when I
when my wife and I were first married, we actually
rented a house which after we moved out, was condemned
and demolished.
Speaker 3 (33:09):
And you were in love.
Speaker 5 (33:11):
Well, we specifically look for a house like that because
it allows us allowed us in six months to save
the deposit for our first time, because we're playing fifty
dollars a week for rent. And it was a it
was a genuine slum, and we thought, well, you know, like,
well if.
Speaker 2 (33:24):
You had to cuddle each other, you had to cuddle
each other title when it got cold. I mean, a
very cunning planet.
Speaker 3 (33:29):
David to ask you, though, how much extra Like I
assume you've been in the building industry for a bit,
but if we say, like the last ten years, how
much additional cost you reckon there is just from additional requirements.
Obviously the cost of building goes up because you know
what gets more expensive, job gets more expensive. But what
about these extra requirements, how much does the actually add.
Speaker 5 (33:53):
Well, actually, I haven't been in the building industry that long.
Actually I'm still on the printer's weirdy enough. I've really
just started in the last three years. So oh wow,
I've got a building company with a partner and I
decided to do it a pretty But that's.
Speaker 2 (34:07):
So interesting being at both ends of the spectrum.
Speaker 5 (34:09):
There, Yeah, yeah, yeah, but we had I've been a
farmer for twenty five dred years and I've decided to
go for a bit of a career change.
Speaker 2 (34:15):
And so you've been around the block a few times.
Speaker 5 (34:18):
Yeah, yeah, you've done a done a few bits and pieces.
But we do we're sort of doing something different now.
But I'm talking to my partner. He's been in it
for twenty years, and he is an interesting point. It's
not so much the cost of the extra materials, you know,
like the price of housing is going up because of
all those costs going up, but it's also the sort
of administrative cost you know. It's the it's the insulation costs,
(34:40):
you know, Like for instance, we have these the insulation
requirements have gone up recently, and one of the places
that causes the problem is out of the eves where
the insulation is up against the roof and there's this
little plastic strip we have to put in to keep
the insulation from touching the roofs. You know. Now that
costs i know two three, four hundred dollars per house,
(35:01):
and then it costs another couple of hundred bucks to
put it in. But it's just it's just a lit added,
you know, it's best by a thousand cuts kind of thing.
You know, like each individual thing doesn't seem like that much,
but when you add dozens and dozens of these things,
things like you know, the stud corners of a building,
we have to put polysty in blocks in there there.
Speaker 3 (35:21):
Well, here's one year as well, David, that I want
to ask you about. So, my brother in law is
a structural engineer, and one thing he was telling me
is that I've just changed them. So they've just changed.
So they've just changed the rules. I think maybe a
year or so ago, and he was talking about insulation
around the foundation. And I'll tell you what he told me,
and I want you to fact check it. He was
(35:43):
saying to me that you've now got to put some
sort of insulation around the foundation, but only something like
ten percent of heat is lost through the foundation because
heat naturally rises, and the insulation you've got to put
in has a twenty percent benefit, which means actually you're
only save two percent of heat that you would have
otherwise got or otherwise lost. What's your take on that?
(36:05):
Is that really happening? Or is he's an Italian man?
So is he he just talking Giberius.
Speaker 5 (36:10):
Well he's right and he is wrong. So yes, very
little heat is lost through the through the slab, and
most of the insulation systems that we put into slabs
are pretty ineffective, you know, so for the cost of them,
the net reward is pretty small. But one of the
things that happened when they made changes to the inslation
requirements recently is it went from a system where they
(36:33):
prescribed certain level of insulation and in your ceiling and
your walls and your slab to now you can it's
like a calculation method, which is is actually quite a
lot more flexible. So you can say, oh, well, in
my design, say I've got a scillion roof and it's
very difficult to get enough insulation there. I can make
that up by having more insulation in the walls, a
(36:55):
better slab, double glazing, or indeed, you can go the
other way. You can say, hey, I've got a really
good ceiling insulation, and so I can save some money
by head having small single blazed windows. So the the
insulation side of things has gotten a little bit more fexible.
I'd say, it's still it's still expensive and you need
(37:17):
you need somebody like a structural engineer to do all
the mathematics to calculate what you can and can't do.
But it does mean that certain designs can happen now
that couldn't happen before.
Speaker 2 (37:28):
Okay, hey, thanks, thanks for coming over. If we have
to leave it there because we've got to, we'll have
to go to a break and come back with one
with probably the week. But you can actually do an
interesting discussion for probably a bit longer than well, we
don't have the time now, but just about the whole
Healthy Home standards out if it keeps shifting and improving,
I mean, at what point do we say that's good
(37:48):
enough on the basics.
Speaker 3 (37:50):
Well, we haven't seen. We haven't seen the Healthy Home
standards get tighter. If anything, I believe we actually saw
them come back just a tensey bit around the heating
because they were a little bit overkill. But in terms
of the actual building standard, you would expect that it
has improved over time. One thing that I was just
thinking though, is I was listening to David, is the
premium you pay for a new build has been pretty
(38:12):
stable over time around It goes up and down, but
about six percent. So if we are building a like
requiring new builds to have more and more and more
and more stuff, which is absolutely the case. That probably
drags the price of all other houses up as well,
because then people think, oh, okay, well maybe I won't
pay that premium, I'll go buy an existing house, and
so that perhaps drags the out price of all the
(38:34):
other houses up as well.
Speaker 2 (38:35):
Right we've we're going to have to take a moment
and we'll come back with the one roof Property of
the week is a house I would really, really really love,
but if I won lotto, I possibly couldn't afford it.
But it is a spectacular property, the location, and we'll
be back with it in just a moment, because if
you just want to be a bit nosy and go
and have a look at the life the way the
(38:57):
other half live, then this is the property for me.
We'll be back in just the tickets eight and a
half minutes to five.
Speaker 1 (39:04):
The one roof of the week on the Weekend Collective.
Speaker 2 (39:08):
Yes, the one roof property of the week is an
a I'm going to give you the address right now.
You're go and have a look at it, because it
is I don't want to I don't mean this crudely,
but the expression it's property porn because it really is
just absolutely you've just got to go and have a
look at it. It's one of Auckland's finest waterfront residents.
Is so many people if you are if you've been
to Walkland, you've gone to the shore and you've had
to wander around the rocks at the tech in Takapoona,
(39:32):
the good chance you will have walked past this place
it is. It's described as a Cape cod inspired home
that's been reimagined by architect Jack McKinney. Six on suited bedrooms,
large home office. The one that stood out to my
producer he actually mildly had his attention. Then the home cinema.
It's like, oh, like the look of this is like
(39:52):
whether it had the cinema or not was no meant
nothing either way for me. But it is a stunning
The address is twenty nine many Haha Avenue in Takapoona,
six bedroom, six bathroom, six car garage and I think
the rate of all value, we don't know how much
it is, but the rate of all value was around
twelve million. I think, so ed you're next time probably
(40:15):
allowed to step.
Speaker 3 (40:16):
Up there's gotta be quite a few rungs having to
be climbed, right, I think, you know, there might be
about a thousand rungs for me to get on there.
But one thing that stuck out to me, about six
hundred meters squared is that property. Now, if I think
about some of the properties I own, they might be
seventy square meters if it's like a small rental. My
(40:36):
own house I think is about two hundred and thirty something.
There's probably be about three times the size of the house. Right.
Speaker 2 (40:42):
It is gorgeous. Interestingly, they staged it with twenty seconds
to go. Interestingly, they staged it with no furniture. Normally
you'd see your house dressed up, but it's maybe they're
letting you know how much space you've got, which is
a lot. Anyway, Go and check it out. Gorgeous property
twenty nine minute. Ha ha. If you win lotto you
might just be able to afford it.
Speaker 3 (41:00):
Hey, ed, good to see you mate, Thanks for having me, Tim.
We'll see you next time.
Speaker 2 (41:03):
Yep. Sarah chat one next for the repaired Squad.
Speaker 1 (41:06):
For more from the weekend collective, listen live to news
Talk ZEDB weekends from three pm or follow the podcast
on iHeartRadio
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