Brad Olsen: Infometrics Principal Economist on REINZ saying there's green shoots in the housing market

There's green shoots returning to the housing market, according to the Real Estate Institute.

REINZ data shows the volume of sales rose 14.5 percent year-on-year and nearly 20 percent month-on-month.

Infometrics Principal Economist Brad Olsen unpacks what this news means following the recent OCR cut.

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Episode Transcript

Speaker 1 (00:00):
Now, the Real Estate Institute reckons there are green shoots
in the housing market. Although prices in July were down
two point two percent from a year ago, the number
of properties sold actually jumped almost fifteen percent in the year.
Brad Olsen is Infometrics principal economist.

Speaker 2 (00:13):
Day Brad good evening.

Speaker 1 (00:14):
Did you hear the sledging from Adrian or towards you
last week?

Speaker 2 (00:18):
Oh, I've heard various views being put out across what
the bank may or may not have done with cutting,
whether or not it was U turns or not. I mean, look,
I just stand by my point hither that there that
was a big swing in view to go from saying
that things will interest rates might go up and certainly
going to stay and hold another year to then three
months later decide to go for a cut. Now, if

(00:39):
the economy had changed, marketly, I could understand that. But
most of the high frequency data that we've been setting
has continued to look bad through twenty twenty four. It
didn't emerge just three months ago.

Speaker 1 (00:50):
What about him saying that he thinks that you need
pictures to be drawn? Did it make you be angry
or did you go, oh, that's just classic Adrian.

Speaker 2 (00:57):
Oh, look, that's not for me to comment. I have
tried my heart not to make it personally genuinely, you
don't think I have. If others want to try and
make it that way, that's completely on them. But put
it this way, I'm more than comfortable with calling a
spade a spade. If it has been going around forty
years this year, you know, making sure that we're providing
an independent, robust economic view and we won't be changing that.

Speaker 1 (01:16):
Now, what do you reckon is going to happen from
here on in? Is it going to be cut cut, cut, cut,
cut at every single meeting.

Speaker 2 (01:23):
That's what we're taking from the predictions at the moment.
If the economic data comes in as expected, we'd be
expecting cuts every meeting until probably mid next year, and
then the bank weft is probably take it a little
bit more of a do they don't they? After that? Look,
it's not out of the rental of possibility either here
that the bank sides at the end of this year,
come November, they might have to do a fifty pass

(01:44):
point cut. They'll have three months, remember before they meet
again in twenty twenty five, so they might want to
sneak in an extra cut almost ahead of time.

Speaker 1 (01:51):
Yep, yep, yep. I think you might be on the
money on that one. Listen, now, why is the housing
market up at the moment? Is this and this is
pre the cut? Is this because people start to see
good signs?

Speaker 2 (02:02):
I think there's a few parts. So, I mean, one,
June was just sort of quite rubbish in terms of
you you've seen sales jump up significantly in July in
the housing market. Part of that was just because there
wasn't a whole lot happening in June. Sales. If you
look at them sort of over the last year or so,
it's still pretty weak on all accounts. You can see
that in house price growth as well, only zero point

(02:22):
two percent over the last year, the slowest annual growth
since November twenty twenty three. So it's not like there's
a huge amount out there. You might be seeing some
green shoots starting to be sullen, but let's be clear
that the ground is still pretty frozen underneath, and we're
not expecting it thaws out immediately.

Speaker 1 (02:38):
Brad, you mentioned it's forty years. It's forty years of
infametrics today, isn't it.

Speaker 2 (02:43):
We are celebrating today. I mean, the business has been
going a long time, starting in nineteen eighty four as
the economy was really starting to go through some big
economic ructions. We've sort of been there through it all
and we're pretty excited to say that, you know, we've
made the smilestone and we're looking forward to a lot more.

Speaker 1 (02:58):
Yeah, good stuff. As you've got a party in Earliament tonight.
So you've got the Finance Minister coming, Gareth Morgan coming.

Speaker 2 (03:05):
Yes, indeed we've got Gareth coming along. We've got our
team and a bunch of clients and supporters and similar
not wanting it to be too big. We're economists after all,
and so we've got to be you know, conservative. We
don't want to try and reinflate you know, the inflationary
pressures again, so.

Speaker 1 (03:18):
Keeping it sort of reserve Adrian coming.

Speaker 2 (03:23):
We have not got the Reserve Bank Governor in attendance.
We have invited the chief economists, but unfortunately they're not
able to make.

Speaker 1 (03:29):
It other commitments like washing their hair tonight. Brad, thank
you very much, really appreciate it. Brad alson infametrics principle
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