Nick Tuffley: ASB Chief Economist on house prices rising 0.1% in September

Property values have ticked up again after a five-month fall. 

Cotality data shows property values in New Zealand edged up by 0.1% in September. 

Across the main centres, Wellington dipped by 0.4%, with Auckland also down 0.2%. 

It follows a cumulative -1.6% drop over the five months to August. 

ASB Chief Economist Nick Tuffley told Ryan Bridge the regions that are doing the best are the ones who have had good export outcomes or tourism seasons. 

Tauranga for example, he said, has had two bumper seasons of kiwifruit exports.  

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Episode Transcript

Speaker 1 (00:00):
Speaking of a sleep. That's what the property market's been lately.
But jeep, we're celebrating this morning because, wait for it,
September property prices, according to Cotality, showed some increase zero
point one percent. This brings an end to five straight
months of waning property values. Joining me this morning, Nick Tuff,
the ASB chief econdoms Nick, good morning, good morning, Good
to have you on.

Speaker 2 (00:19):
Is this?

Speaker 1 (00:20):
I mean, look, it's monthly data. It's zero point one percent.
Will the real estate agents be cracking out the champagne?
Do we think?

Speaker 2 (00:27):
Oh? Well, I think at the moment we've been looking
for really excuse we could. When it comes to the
housing market, it is one tenth percent. But when you
look at various housing measures, we did have a bit
of a burst of activity where prices were lifting slightly
late last year early this year, and things didn't look
like they peetered out. So if we do start to
see the property market picking up, it's one of those

(00:50):
economic signs that people are starting to get out of
the infrastrate hibernation that they've been in for a while.

Speaker 1 (00:58):
The regions doing well, a bay of plenty. What do
you put that down to?

Speaker 2 (01:03):
Well, when read our ASP Regional School Board. We actually
had the Bay of Plenty at the top. And one
thing that when you're looking around the country at the moment,
you tend to see areas that have had good, good
export incomes or tourism have done well. And that's the
pending example was two bumper seasons of Kerry Freed exports.

Speaker 1 (01:23):
For example, are people buying you mentioned tourism, are people
buying homes there to rent for tourism like Airbnb?

Speaker 2 (01:32):
Well, with Torong, it's probably more around the income that's
come through. We've seen jobs lifting up, retail spending lifting
up there. For example, the bottom of the South Island
had a really great run. And one thing I've put
that down to is around the central Lakes and the
spillover effects around the region would be that tourism. It's

(01:52):
not just the people coming and wanted to buy properties,
but also the need for workers as well. So that's
something in recent years where the lakes, even though it's
come off the boil this time, now it's hit that
population pressure and that needs for housing.

Speaker 1 (02:05):
Nick, what's the lag everyone in the big cities this
morning I'll be thinking, well, that's great for Toling and
great for Southend. But what's the lag between because normally
it's the other way around. Auckland would lead a property
price resurgence and then the regions would follow. This time,
it seems like it's in verse. When will the city
start to see something.

Speaker 2 (02:24):
We will start to see something, I think over time.
One challenge with Auckland and particularly Wellington, as they've gone through,
they went through big booms, they went through big, big busts.
One challenge that we do have a number of markets.
There's actually a lot of stock sitting on the market,
so we actually need more activity. We need the sales
activity to pick up start eating into that stock on

(02:44):
the market doesn't really get some sort of more noticeable
lists and prices, so supply versus demand, there's a lot
of supply. People are still being a little bit cautious
and we've seen that in house sales recently that they've
actually edged back down, so people haven't sort of quite
got out and embraced a sort of buying crem at
the moment.

Speaker 1 (03:00):
Be fair to say, Nick, appreciate your time this morning.
Nick Touughy, ASP Chief Economist. For more from early edition
with Ryan Bridge, Listen live to News Talks. It'd be
from five am weekdays, or follow the podcast on iHeartRadio