Brad Olsen: Infometrics principal economist on new data revealing more Kiwis are moving

New census data shows more Kiwis are moving house than ever and it's raised questions among experts.

45 percent of New Zealanders have moved address over the last five years - a noticeable increase on previous data.

Infometrics principal economist Brad Olsen explains why this could be the case.

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Episode Transcript

Speaker 1 (00:00):
Brad Olson, Infametric's principal economist, is with us.

Speaker 2 (00:02):
Hello, Brad, good evening.

Speaker 1 (00:04):
We're moving house a lot at the moment, are we?

Speaker 2 (00:07):
It seems that way. The latest census starter out from
STATSENZ does show that over time we've been seeing quite
a lot of moving. Around forty five percent of New
Zealanders moved addressed over the five years between twenty eighteen
and twenty twenty three, slightly higher than the last five
year period, so obviously quite a lot of shift. Two

(00:27):
big trends that came through in the numbers, though generally
a bit more of a shift south than we normally see,
particularly into the likes of Otago and Canterbury, but also
a real shift where previously everyone was flocking to the cities.
Now it's a little bit it's not an exodus, but
definitely a bit of a shift where people are trying
to find an option nearby to a city but not
in the middle of the congestion. People seeming to like

(00:50):
those sort of fringe areas outside the main urban centers
where they can get a better lifestyle offering probably a
slightly cheaper house price. Seems to be sort of a
bit of a sweet spot are.

Speaker 1 (01:00):
We're moving more than we normally would.

Speaker 2 (01:03):
We're moving ever so slightly more so. Back in over
the five years to twenty eighteen, about forty four point
six percent of the population shifted address forty five point
two percent, so a little bit more over the five
years to twenty twenty three. Now, of course that's normal,
like people move, it's just often you don't make huge,
huge moves. Seventy seven percent of New Zealanders who moved

(01:27):
within the last five years, they still stayed within the
same region, so pretty close to you know, wherever original
home base. Well, this so they're not sort of shifting massively.
Sixteen point six percent moved to a different region on
the same island. And that so again often people staying
a little bit closer to what they'd normally have. But
put it this way, I think what you're seeing and

(01:48):
what you've really had emerged since COVID has come through,
is that working from home is now much greater focus
for people, and that's opening up a lot of employment opportunities,
a lot of new housing opportunities, which means that the
old idea of go to the cities that's where all
the economic activity is isn't strictly true anymore.

Speaker 1 (02:05):
Okay, Brad, can you please explain how the ratings valuations
work for people who think that their property having fallen
should lead to a ratings decrease.

Speaker 2 (02:16):
Yes, and I can understand because normally, right, we haven't
gone through many periods in New Zealand's history where house
prices have gone down, certainly not by quite as much effectively,
though the council is using the rating valuations to help
split up the rates pie And so because there's an
average increase this year I think in Auckland of around
five point eight percent if you've had a so that's

(02:39):
what the average household would get. Now, we also know
the average house has fallen in price by around about
nine percent over the period. So if you've had a
nine percent full, you're still going to pay five point
eight percent more in rates. If you've had a larger
than nine percent fall, you'll probably have a slightly smaller
increase in rates. It'll go up, but maybe by just
a coupleercentage points. If your house hasn't fallen quite as much,

(03:03):
if it's fallen by less than that nine percent, you're
going to pay probably more than a six percent increase
in rates this year only because the cost of delivering
services has gone up. There's more people. Everything has become
a whole lot more expensive, both for households but also
for councils who've got to buy some of those services.
So the ratings, the cvs, they're not a good measure
of what your house is actually worth at any given time.

(03:26):
They're sort of a snapshot. We almost shouldn't publish them.
You do wonder where a council should sort of say,
look every house and you know your house, Heather is
going to pay zero points zero zero one two percent
of the total rates bill and that's what you get. Yep.

Speaker 1 (03:39):
Is it possible that people that some people may have
had a fall in their house value that is so
massive that they end up with the rates increase, a
decrease possibly number of cent falls.

Speaker 2 (03:53):
Potentially, But it would also probably depend on the services
that they are getting from the council, where they are
in the city. I mean, one thing that we noted
from all council was that some of the apartments in
the central city have seen some pretty big decreases relative
to otherwise. But again in the city, they're using a
lot of the resources that come through that, you know,
all of the roads, all of the wastewater, stormwater, water

(04:14):
services and that. So it'd be a very unusual situation
that anyone's rates would outright go down. The biggest win
you can probably get is having a larger fall and
not too big of a rates increase this time around.

Speaker 1 (04:25):
Yeah, Brad, thank you as always appreciated. Brad Olson Informatrix
Principle Economists.

Speaker 2 (04:30):
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