June 15, 2024 • 40 mins
Property commentators seem to think that housing market is back in a slump - so how long will we be in this slump, and who's to blame?
Helen O'Sullivan from Valocity Global joins the Weekend Collective to give her take.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talk
SEDB Jeamy and I can tell it we would belong
with me.
Speaker 2 (00:16):
Sing name.
Speaker 3 (00:37):
John because it Adam. Welcome back. This is the Weekend
Collective Untim Beverage and this is the one roof radio show.
We want to take your calls on eight hundred and
eighty ten eighty. You can text on nine two of sorry,
nine two nine two. So yeah, we're looking forward to
your participation this hour, so don't hold back. And for
(00:57):
this hour we're joined by Well she is from Velocity
as in the A L O, C. I T Y
and she is she is sounds like a crude way
of a bit of a clumsy way of introducing Helen O'Sullivan. Hello, Helen,
how are you?
Speaker 4 (01:12):
I'm great, Tim, I'm really well. Tanks, how are you good?
Speaker 5 (01:15):
Hey?
Speaker 3 (01:15):
Just in your words tell us about what Velocity does. So.
Speaker 4 (01:19):
Velocity is a New Zealand owned property technology company. We
have been providing service for around about ten years now
in the evaluation, management and modeling space to a lot
of banks, and in the last ten days we've actually
launched a new product for our real estate clients, which
is called Velocity nexus.
Speaker 3 (01:40):
What does that do?
Speaker 4 (01:41):
It provides our real estate agent clients with access to
all of the data that they need to enable them
to research their market and provide advice to their clients
on the market value of the properties of the homes
for the clients that they're serving.
Speaker 3 (01:56):
So what so they can get a decent steer on
what something's worth? Because I always love that question. You
ask a real estate agent, so what's the what's it worth?
Or something in your art worth what anyone is prepared
to play for it? And it's like, okay, but what
do you think someone's going to be prepared to pay
for it?
Speaker 4 (02:09):
Yes? And look, one of the things that a realisted
agent is legally obliged to do when they list to you.
If you sign a listing with a real estate agent,
they have to give you what's called a comparative market
assessment into a CMA and preparing those as a process
that takes them quite some time. And the tool that
we've developed and launched, Velocity and Excess and what brings
all of the data sources that they need in order
(02:31):
to do that into one place for the first time.
Speaker 3 (02:34):
Exciting. Actually, we just in our panel with Neva and Mark,
the topic of AI came up as inevitably, AI is
going to be a powerful tool for analyzing data and
all sorts of things for the real estate market. What
(02:55):
role do you see it taking, Well, we.
Speaker 4 (02:57):
Are already using AI and a lot of our products.
Primarily it's as part of the data ingestion process. You know,
so data, by its very nature tends to come to
you in a messy state and you need to tide
it up and clean it up. And you know, we
have free text feels that we use AI to analyze it,
put out the numbers that are in there, get the
(03:20):
sense of the topics, and then enable us to further process.
If we had people doing that, it would simply take ours.
It just wouldn't be it wouldn't be economic to do it.
So it enables us to, you know, much more quickly
and efficiently and effectively tidy up data and present it
in ways which turn it from data and into intelligence.
Speaker 3 (03:40):
Because it ties in with the first thing we're going
to talk about, which is based on a piece by
Tony Alexander on the One roof website One Rooftop Coda
in set in z and He's he's talked about the
It's basically the headline is the return of the housing
market slump, and the question is who's to blame. But
(04:01):
of course the other question is what will trigger a
turn around? And that's I was wondering about the role
of AI in terms of predicting what the market's going
to do. Do you think do you think that AI
is going to get to a point where it's going
to be able to analyze patterns and behavior and nuances
here and there and go, we think this is going
(04:21):
to happen. But of course then if people act on that,
that it might confound the predictions of AI.
Speaker 4 (04:25):
But anyway, yeah, like AI is used extensively already in investments,
So you know, an enormous amount of a lot of
a lot of investment management houses are using AI to
analyze and crunch mass data sets and enable that and
use that to generate predictions and insights, identify opportunities where
(04:47):
things are mispriced, et cetera. So you know, AI has
a huge role to play and that sort of thing.
Our automated valuation mechanisms use AI to a large extent.
You know, there are algorithms that are using data sets
and learning constantly value waiting the data and looking at
the predictions that were made and measuring them against the
(05:11):
actual data and refining and tweaking. And I often think
though with AI, if you're sort of thinking, you know,
is that gonna undermine employment? Remember the paperless office? Ah? Yes, wow,
how technology was going to resolve in this?
Speaker 3 (05:30):
I always yeah, I mean it's more of a broader
theme though, isn't it, Because I always think that, you know,
you get the technology, the techno boffins who want to
predict this very sterile future. But I always remind myself
that regardless, people need people and people want tangible things
as well. And there's it finds its place. It's like
the same thing people said, oh theater, no one's going
(05:51):
to go out to live concerts because of the law
be on your television. People are craving to go, I mean,
live concerts going off apart from them struggle to pay
for it. So yeah, I think it finds its place.
Speaker 4 (06:01):
It does. It's a tool that enables us to do more.
You still I need asked person who's looking at the
data and asking the questions of the data.
Speaker 3 (06:11):
Well, speaking of the person who's looking at the data,
Tony Alexander, who of course, is a very well known
name as an economist, analyzing and reporting in his surveys
on the real estate market. So he's the headline, as
I say, is the return of the housing market slump.
Who is to blame? He points out that while between
July and November twenty twenty three, so late last year,
(06:32):
house prices rose an average of zero point nine percent
per month, since then they've fallen by zero point three
percent per month. Confounding, well, I do remember enough predictions
of people we have on the show who are predicting
and we're going to see a ten percent rise by
the end of the year. That ain't happening, Helen, Just
to just to be on the same page, do you
(06:54):
agree we're in a slump?
Speaker 4 (06:56):
I perst think I suspect we've been in a slump
for perhaps a little bit longer than you might. We've
been in this weeslam for our while.
Speaker 3 (07:06):
Do you think we've been living in denial of it
because there were Part of that is because it had
been flat and we've seen we've obviously seen the huge
fall from those ridiculous rises and following COVID cheap money,
But do you think it's because we are now feeling
where I'm in the slump, whereas we were all it's
don't worry, it's going to go soon. It's going to
move up soon. So everyone's sort of better brace yourself,
(07:26):
get ready to get you you know what I mean?
Are we feeling more?
Speaker 4 (07:30):
I think there's an element of the turn was we
saw the turn in the market, and I guess we
anticipated an accelerating path from there. However, that was sort
of predicated on the assumption that we would start to
see inflation come down and interest rates come down and
(07:50):
a soft landing in the economy. Sort of the opposite
has happened in all three of those factors, in that
the interest rates have stayed higher for longer, and now
we have considerable level of concern I think are unemployment.
And when those two combine high cost of interest rates
(08:13):
and low confidence on your ongoing employment, that's the time
when people will tend to button back while making big commitment.
Speaker 3 (08:20):
If it was a pantomime, this this particular subject, we'd
need a villain. Okay, who's to blame? What's to blame?
Speaker 4 (08:30):
Which the economy?
Speaker 3 (08:31):
Stupid brutal that was John Keith did. Oh yeah, I
think you're right, Yeah, whose faults are? Okay, look as
thing as we had to have, it's one nuanced.
Speaker 4 (08:49):
But this, this is the recession. We sort of had
to have to get the inflation genie back into the bottle.
And maybe we talk to Souse into thinking that the
recession wouldn't hurt that much and it would sort of
just float through through without us really having to feel it.
(09:09):
And I think inflation has persisted for longer than anyone anticipated,
around about six twelve, yeah, six to eight months ago
last year.
Speaker 3 (09:19):
So inflation's to blame because we had to get that
under control and everything follows from that. And if we
want to, we could play the game of who caused
inflation and all that, but that wouldn't be helping us
too much with our property thoughts, would it.
Speaker 4 (09:30):
Well, you know, there's so many people. Could somebody go
and knock on the door of the increases and energy
costs in Europe? Where did that come from? The invasion
of Ukraine? Increase in grain prices? Where did that come from?
Speaker 3 (09:42):
Invasion of Ukraine?
Speaker 4 (09:43):
Invasion of Ukraine? Increases in transport lo justic costs? Where
did that come from? The disaster? The shamozl that we
had after COVID. You know, there are so many causes.
The problem with trying to find yourself a convenient pantomime
villain is that facts don't generally lend themselves to such
tidy analyses.
Speaker 3 (10:03):
No, I mean it's more fun. I may of course
we've we've had a crack at Adrian or and of course.
Speaker 4 (10:08):
He probably has a jolly good crack right back. He's
good like that.
Speaker 3 (10:12):
Do you think he minds being the villain?
Speaker 4 (10:14):
I don't think you'd take that job if you.
Speaker 3 (10:16):
Did, I guess not. Okay, well, I guess so the
question is for you on out there as well, A
W one hundred eighty ten eighty. I actually I'd like
to know if there are any smarty pants out there
who predicted that we'd be in the slump and not
looking like we're going to get out of it by
the end of the year, which would be My prediction
(10:36):
is that we're not going to get out of it
before Christmas. But I'm not an expert, as you know,
how long do you think it will take, Helen? But
or more importantly, what will it take for us to
get out of the slump?
Speaker 4 (10:52):
I do think it's interesting with these things to look
back in history at previous slumps. And of course I
was the chief executive of the Real Estate Institute back
in twenty ten when first interview I ever did on
property price is the fiery Mary Wilson. Her first question was,
so not looking good for property market, is it? And
(11:15):
we would all now be delighted if we could buy
houses for the prices that I was talking about at.
Speaker 3 (11:21):
The time twenty ten. Yeah, I do. It is all
cyclical back when things sort of when it went from
a hot house being three hundred and fifty four hundred
thousand to sort of outrageously five or six hundred thousand. Gosh,
wouldn't we love dream of harve.
Speaker 4 (11:33):
Or six hundred thousand dollars now?
Speaker 3 (11:36):
So we'd love to hear from you on this as well.
Eight hundred eighty ten eighty text nine two nine two.
You can tell us if you predicted the fact that
the slump was going to be as long as it's
or as bad as it is or as it feels,
and maybe how much how much is how much does
human emotion play a part in.
Speaker 4 (11:55):
The stuff, and enormous Ultimately a huge amount of this
comes down to confidence, right and the slump is lease about.
You know, it's not that we're seeing vast decreases and prices.
It's really we're seeing enormous decreases and transactions. People decide
to sit tight and hold on and.
Speaker 3 (12:14):
Wait to ride it out because no one wants to
drop their price. They're just rather hold on to it.
Speaker 4 (12:19):
Correct.
Speaker 3 (12:19):
So the first thing that happens is people hold and
then you have a decrease.
Speaker 4 (12:23):
And and look, if you're trading in the same market,
if you're buying and selling, then it's not so bad
because you what you lose on the swings you make
upon the roundabouts. If you are needing to get in
for the first time or get out permanently, then it
becomes very painful because you actually realize I'll potentially realize
(12:45):
a cash loss at that point in time. And that's
when people decide to make other decisions and hang in
there and ride out the slump.
Speaker 3 (12:53):
Okay, so we want your reckons on this. What do
you think is going to happen with us getting out
of the slump, and what are the factors that will
dictate that because you know, obviously these things are always
nuanced and you've got job losses we've got the cost
of money most I do can think of a couple
of property commentators that'd say it's the cost of money
will be the first thing. But and again, if the
(13:14):
economy's flattened, people are losing their jobs and not confident
about their job prospects, does that reduce the demand as
well for a bit longer? What do you reckon? I wait,
one hundred eighty ten and eighty. That's that's why I
got a C minus in economics. By the way, with
that poor explanation. Well maybe it was a C, but
it didn't have a B in front of it. That
was for sure. It's twenty past four. We'll be back
taking your cause in just a moment. This is News Talks.
(13:35):
He'd be sends you on your way and restless sties
today and welcome back to the One Roof Radio Show.
My guest is Helen O Salondrevan from Velocity V A
L O C I T Y and their website, of
(13:57):
course is Velocity dot dot nz dot cod it z.
You can't miss it anyways, dot coded DZ. Helen. Right,
we're going to take some calls. What is causing the slump?
What's going to get us out of it, oh eight,
one hundred and eighty ten eighty, And if you can
tell us when then, you know, wouldn't that be great
if we get those predictions and nail them. But of
course predicting in real estate not the easiest thing to do,
(14:19):
is it. It will recover at some stage, though, Tim, Hello, Ry.
Speaker 2 (14:24):
Tim, I would just sit in the comment of this.
I think the slum's feed around a little longer. And
I wonder these days, in compared to days gone by,
it's a little insulated by the rich are so rich
that there's not a day goes by we don't hear
something can your sold, first state on the market, or
there's a record property still, you know, the real high
(14:45):
end is just so elective and twenty to thirty million
dollar properties and Queenstown we're getting constant pressed about records
being set. And I wonder whether it's sort of almost
numbed people off to the real market, which is that's
probably left two or three percent of the market, whereas
the reality the real market been suffering longer and harder consequences.
(15:09):
They're taking a little longer than eating. But we've got
a lot of positives at that top end. That we're
constantly exposed to these days.
Speaker 3 (15:17):
He I have noticed a few of those headlines which,
in the absence of anything else, you'd think, Oh, the
market's booming. Do you think there's something to that the
top end of town is making it look better than
it is.
Speaker 4 (15:27):
I think there's always those stories. I mean, real estate
agents do well. We love to talk about property in
New Zealand, right, Barbecue conversations have been about property in
New Zealand for longer than anyone can remember. And those
are the stories that it's the stories that are unusual
and outliers that attract attention.
Speaker 3 (15:49):
I guess, yeah, what do you reckon? Tim?
Speaker 4 (15:53):
Yeah?
Speaker 2 (15:53):
I think you're right, but more so than ever. I mean,
there's just it's not a bad thing, it's just reality.
But you know, the market, from what I see in
the mid two a two million dollar market, there's a
pretty desperate trouble. Yet you know, you do see these
massive records every week with the press one almost it's buddy, hell,
(16:16):
there's so much.
Speaker 4 (16:18):
Going on.
Speaker 2 (16:19):
Could I also say that your gift talent is incredibly
eloquent and accurate. But it's a pleasure to hear here.
Speaker 3 (16:27):
You not that it would be a plant.
Speaker 2 (16:36):
It's just it's a pleasure to hear somebody so confident
and so well equipped, you know, combining the abuse with
pleadyon knowledge. It's a pleasure.
Speaker 3 (16:46):
Good on your term, Thank you for that. And Joe,
can you make sure you save that little bit of
audio for Helen.
Speaker 4 (16:54):
Thanks.
Speaker 3 (16:55):
I thought you might replay it back at the office.
But of course, Hey mom, Hey, good on your term.
Thanks for you.
Speaker 6 (17:00):
Call Royce Hello, Hello, Hello, I of the Chuckery sens
And I wonder if a lot of the problem come
down to Quet's had amasing too much money creation. I
wonder if that's something that you think might be an issue.
Speaker 3 (17:15):
Well, that would have caused the boom in the first place.
Do you think that that's also means that we crashed
a lot.
Speaker 6 (17:21):
Or what Well, I think in order to well personally,
I think that in order to get a lot of
that money back out of the system, it's going to
take a bit of time, and I think that you're
going to have the opposite, the opposite effect, which is
you know, job losses, you know, less spending all around
the show.
Speaker 4 (17:41):
Yeah, look, I think that's exactly the point. Tony Alexander
is is well it's a issue that Tony Alexander is
pointing to. In order to wind back that expansion obviously
of the money supply without a commensurate an increase in
the productive economy aka inflation. The only way you get
that back down is to as tighten up the ratchets.
(18:02):
And you know, that's that's the phase that we're in
at the moment. The question is just really, are we
ast on near the bottom of that turn?
Speaker 3 (18:11):
Where about to you in the market, Royce, I'm.
Speaker 6 (18:15):
Just a novice thinking your financi But I did get
a property before the big boom, so I'm in the game. Yeah, yeah,
I just I'm just learning about money creation at the moment,
and like I've heard a lot of stuff about still
not being able to get it, like from the last
quantidat of easing, run get that money out before they
(18:38):
put more money back in. So I just wonder if
there's somewhat like a bit of a bubble forming that
no one's kind of aware of.
Speaker 3 (18:46):
As such, do you think also that the slump is
sort of inversely proportional to this, to the you know,
the amount of money or the proportion of the slump
needs to match how much they pumped money in with
the Quantitative Agency easing, So because we did so much
of it, we're in for a bigger slump in other words,
Is that where you're getting at.
Speaker 6 (19:04):
Yeah, I think it's like you really need to take
a lot back and I think that's going to hurt
quite a lot so and I don't see inflation even
but it's still not quite under control yet, so you know,
a lot more job losses long straight, so I don't know,
(19:25):
it's probably going to get a lot worse.
Speaker 4 (19:28):
I don't know, it's not under control of the new zeally,
but if we look overseas in the UK, they have
already they're awfully close to the being back within the
Italian inflation and Europe is we inflash and Genie started
spread internationally. I think we can look, you know, you're
(19:49):
already sort of starting to see the green shirts start
to spread in the UK, and you know, I don't
think it's too far away. But we do have a
tendency and enzi that took ourselves into a giant slump
and gear you know, stay as depressed as possible for
as long as possible.
Speaker 3 (20:09):
Yeah, okay, hey, good on your right, Thanks for your mate,
actually do. Our emotions tend to be a little bit
on the extremes about property as well. So for instance,
I have hosted enough property shows here to remember the
the the glea or the just the the property markets.
(20:31):
No brainer, you've got to get it. It's just going
to go, go, go go, and it's all positive, positive,
But it was really like this desperate thing you've got
to get in, You've got to get in. And now
it's do we match that further with market's really mounted
right now it's going to be urged as I'm not
going to get in and I'm not even thinking about it.
Speaker 4 (20:51):
I think we do it. It's become. But yeah, we're
you know, we don't really seem to have a happy
medium medium. We are either delight, we're at the peaks,
or we're in the we're in the trough. There's there's
no happy bit.
Speaker 3 (21:08):
It'll continue, But what do you think that we will
find a sort of more of an equilibrium where we
don't see these ridiculous extremes of boom or but you know, bust,
not as bust, but.
Speaker 4 (21:18):
You know what I mean, Yeah, yeah, I think it's
the other thing. You know, price is not going up
is not the same as a catastrophic crashing of the market.
Speaker 3 (21:27):
No, well it's not and it's not going to do that,
is it. I think we can. I think we can.
We can say that that's not going to happen. Mean,
but some people be like, oh, I've had people, so
I reckon the property. There's going to be a big
forces SI the long way to go.
Speaker 4 (21:38):
It's like I've seen people. I've heard people are hopefully
predicted that repeatedly. Every time we get to these kind
of times, it never happens. And you know, generally at
some point in time that people who are predicting thirty
percent price decreases are confidently predicting thirty percent price increases,
and nobody ever seems to get the get the get
(22:00):
the book out and check the receipts.
Speaker 3 (22:02):
Okay, here's a question what will reverse the fortunes of
the property market to get it moving again? And obviously
it's you know, a recipe usually involves more than one ingredient,
but predominantly will it be just the fact that money
becomes cheap again, or do we actually also need to
see some real productivity return to New Zealand in other sectors?
(22:24):
So the economy starts to feel a bit more. You know,
life's good, there's hope, I'm not going to lose my
job tomorrow.
Speaker 4 (22:31):
I think the confidence and employment piece is part of it.
But again, it's really important to put this in historic context. Right,
our unemployment rate at the moment, it's still.
Speaker 3 (22:41):
Just over four It's pretty low.
Speaker 4 (22:43):
It's still historically really.
Speaker 3 (22:45):
Low nineteen twenty eight exactly.
Speaker 4 (22:47):
We're not talking, you know, seven to nine percent or
even five percent. If you are that person who is
feeling that concern around their job, it's you know, that
doesn't help. But from an overall health of the economy
point of view, it is an important piece of context.
Speaker 3 (23:08):
Is our media lacking a bit of balance on the
reporting of this, then on the reporting of this, or
just on the reporting of just the way things are
with the economy. I know, as you say, and you
put it in context, unemployments at about four percent, But
it feels like the discussion in media and I know
I probably bang on about the media work in the media,
what can I say, But it just feels that we
(23:29):
are lacking of a little bit. So when you say that,
there'll be people listening right now who will go, oh,
really God, I thought that doesn't sound so bad. That
will be a news flash to them. And that's why
I wonder whether there's this lack of a bigger picture
in the overall media coverage because we're always going for
something that will read well on Instagram or the Facebook
sort of page or whatever.
Speaker 5 (23:50):
Yeah.
Speaker 4 (23:51):
I do think that, you know, reducing our capability to
ingest information to set one hundred and sixty character the
step its may not have been that good for the
human race just generally. I mean that's a philosophical point.
Speaker 6 (24:08):
Yeah.
Speaker 3 (24:08):
Well, that's when we get you back on overnight talkback
and you have a night talkback host. It's Helen and
Sullivan Velocity as one hundred and sixty characters ruined us. Actually,
that's a great talkback topic. By the way, we want
to hear from you, though, what is it going to
take to turn around? Because let's just remember that for
people who are first home buyers, I guess what they're
(24:30):
doing right now is one they're seeing if they can
borrow what they need. But at the moment, what we're
reading it's good news for them generally, is that the
market's not suddenly escaping before they get their capital together
and their loans and all that sort of thing. So
as always, there's a good news story up to a point,
isn't there for people who want to get in the market,
(24:51):
Because you really are people really have been just given
up and going to ask stuff this they're probably thinking, oh, hell,
hell in a minute.
Speaker 4 (25:00):
That's right, And because vendors are very realistic about the
market after the last four to six months of trajectory
in the market, so vendors who want to sell are
much more likely to consider sensible offers. The pace of
the market isn't moving as fast. You know, things aren't
(25:21):
selling within two to three days, which is really difficult
for a first time buy. You need time to do
your d D, you need time to get your finance
in order.
Speaker 3 (25:29):
So in your confidence, I mean a big deal buying
a house, that's huge actually, because.
Speaker 4 (25:37):
I'm buying a home is the biggie. You're buying a home,
and then I suppose is the big thing. You know,
if you can afford it, and you can give yourself
that certainty that you can afford it. You're buying a home.
You're not buying something you're looking to flick in six
months time. So whether the price is going to go
up or down in six months time, isn't Actually the
point is it broadly good value? Can you afford the repayments?
(26:03):
And you know, if you're planning to stay, you know,
factor in planning to stay at least three to five years,
and suddenly what happens to the price in that period
of time actually isn't all that relevant.
Speaker 3 (26:16):
No, But having the time to make your decision before
it's snatched away, but in the frenzy of an overheated
market is gold. Yeah. Actually, one of the reasons I
asked about the productivity side of New Zealand and you know,
the confidence returning so people are not worried about losing
their jobs. Is that Tony also talks about and he
says he was just reading from his point as article
(26:36):
here it says young bars are pulling back and I
feel so this is Tony's feeling that it's due to
increasing insecurity in the job market, especially among those who
haven't seen a weak labor market before, or if they
have the reserve banking gun. We're stepping into boost things
for them, but no one is there to help this
time around. Yeah, I am am. I surprised that younger
(26:58):
buys are pulling back. I would have thought maybe that
is part of it.
Speaker 4 (27:01):
If you love that younger buys, The younger young are
usually most disproportionately affected when there is an employment market downturn,
so I can understand that that is the segment of
the market that would have the least sense of job security.
Speaker 3 (27:21):
You know, what are you guys seeing with investors at
the moment, because they still seem to be staying out
where to me people say they a school of thought
that would say it's these times when the canny investors
will get in.
Speaker 4 (27:37):
But yes, look, the challenge at the moment for any
investor is just around the cash flow, and that's that
comes down to interests costs as well.
Speaker 3 (27:47):
Yeah, okay, let's have a look at a few texts here.
Property talk has become our problem. I wish we invested
in business, innovation, science, farming. But this person says, but
your guest is very professional. However, fantastic, look at horomise.
Speaker 4 (28:02):
I'm not just paying people to write you these texts.
Speaker 3 (28:06):
Actually, I don't think I've had someone call up and say,
by the way, you are anyway, let's take the comments
from wherever they can tell you what we'll come back
with some texts. We've got some spear lines on eight
hundred and eighty and eighty. How long do you think
the slump is going to last? As commented by Tony Alexander,
I think we all realize the market's soft. How long
(28:26):
is it going to be soft for? What do you
think the signs will be that will make you think, actually,
maybe I need to dust off my my lending. What
is the word my This is an expression for.
Speaker 4 (28:37):
Dust off your pocket.
Speaker 3 (28:38):
I need to get my my borrowing approved. That's the
one dust off you finance finance. That's the word.
Speaker 4 (28:43):
It's improved.
Speaker 3 (28:44):
That's why you're here. Clarity of thought. Twenty one minutes
to five newstalks'd be.
Speaker 2 (28:55):
Yes.
Speaker 3 (28:55):
Welcome back to the Weekend Collective. This is the one
Roof radio show. I'm Tim Beveridge. My guest is Helena
sullivanan from Velocity. Just quickly, but one text before we
go to our next caller. The boom our property could
have solved one point eight million. We sold it three
years later for one point three so I think the
adjustment has been made, says Lucy. Yeah, thanks for that, Lucy. Right,
(29:16):
let's go to another caller.
Speaker 5 (29:18):
Kathy High, Hi, how are you doing?
Speaker 3 (29:21):
I think we're pretty good.
Speaker 5 (29:22):
Actually, okay, listener, I just wanted to make a couple
of comments on this. I'm an American, I've been living
here for fifty years, but I have never quite gotten
over the idea and watching the consequences of the population here.
Looking at at property as a market we have created,
(29:46):
it's unproductive as a business man.
Speaker 3 (29:49):
What's that you mean as it's like a big part
of our investment scenario here you.
Speaker 5 (29:53):
Mean, yes, yes, and we see it as a market
rather than as you know, like this is a place
where people live and we need to be able to
make it affordable. When you have a market, you know,
the American stock market, for example, the idea is to
be able to make things more and more expensive. Then
it's the same with housing. But when you make housing
(30:14):
more and more expensive, fewer and fewer people can afford
to be in it, and then you create inflation, and
then inflation creates cutbacks and jobs, and so it's it's
a negative circle.
Speaker 3 (30:28):
So we're too much in love with property as a
way of making loving making money, making love making money.
Speaker 5 (30:36):
Look bacon love. Yeah, sorry I can't say, but you know,
it's that's the outcome.
Speaker 3 (30:45):
Okay, I'll throw that. Well, let's throw that to Let's
throw that to Helen. What are you are we too
much in love with property?
Speaker 4 (30:53):
It's a really interesting thought. I was listening to a
podcast today which is talking about they post the nineteen
eighty for election and the events that followed that. There's
a school of thought says, so many people were so
badly burned in the eighty seven stock market crash that
as a nation, we've become much more focused on brick
and tile investments, things that you can touch and see
(31:15):
and feel, and our capital markets are lack liquidity and
are pretty thin relative to something like the US capital markets.
And as a result, I think there is a large
proportion of New Zealand is it they see housing as
the only safe investment because that's the one that they
(31:36):
can see, touch and have most influences.
Speaker 3 (31:39):
And actually, if you were a canny investor and it
made some solid investments in the stock markets, there's been
some amazing gains in there in the right stocks, but
of course you've got to pack them.
Speaker 4 (31:47):
I think, can we say is starting to change that
in manywhears. I think that's a great thing.
Speaker 3 (31:51):
Yeah, one here, one person here says it will need
an interest rate drop of at least one percent to
make any difference to the market, but unlikely we'll see
a half percent drop by twenty twenty five. That sounds
like a really good comment. I think there's you could
argue that they're making a good point.
Speaker 4 (32:07):
What do you think I think, more than anything else,
people need to see a trajectory downwards.
Speaker 3 (32:12):
Yeah, because yes, like that, like interest rates are starting
to drop, yeap renew and yeah, so.
Speaker 4 (32:18):
I can afford to get in now for a year
at that rate, I can anticipate having a cheaper interest
rate behind that.
Speaker 3 (32:26):
By the way, just as we had Kathy talking about
the American market market, have you do you ever trawl
through Zillow or the American real estate?
Speaker 4 (32:34):
Of course constantly. There are some.
Speaker 3 (32:37):
Places and one else right move right move, that's the
British one, okay, because there are some places where, man,
you get some bang for your buck.
Speaker 4 (32:47):
Oh god. Yeah. And there's but there's also a magnificent
Twitter account called Zillo Gone Wild. They have some absolute crackers.
It's just unbelievable things, things that look like normal condos
and Texas and they've got some kind of horrendous, freakish
dungeon downstairs. And then it's castles another week and just
(33:08):
crazy Las Vegas pink pads, and it's just as marvelous,
all right.
Speaker 3 (33:11):
I used to when Detroit was in trouble, which it
still is. I think, I mean there was a I
used to go and see what you get for Detroit
for I mean ten thousand bucks. You know you get
a I mean they weren't well locked after let's face it.
Speaker 4 (33:22):
But anyway you could for ten thousand dollars. But then
you'd have to live there.
Speaker 3 (33:27):
Yes, you would zilla gone wild.
Speaker 6 (33:29):
I think.
Speaker 3 (33:30):
I think there's people listening right now have made noted that,
and they can come back and tell us what they think. Well, actually,
we'll be back in just a moment. This is news talk.
Z'd be thirteen minutes to five.
Speaker 4 (33:40):
What your son understand?
Speaker 3 (33:42):
It's such chutch a great and welcome back to the
(34:08):
weekend Left of This is the one roof radio show.
And at that time of the week it's nine minutes to.
Speaker 1 (34:14):
Five, the one roof property of the week on the
Weekend Collective.
Speaker 3 (34:20):
And wow, the one roof property of the week is
quite something. It's in Timaru it's Castle Clermont on twenty
of great address, twenty two Mount Horrible Road, and there's
nothing horrible about this fourteen bedrooms, five bathrooms, fourteen car garage,
(34:42):
eighteen point sixty three hectares. It really is a gorgeous
property built with the granite between the years of eighteen
eighty four and eighteen eighty seven. And it took, yes,
it took artisans close to three years to construct. Stonemason's
carpenters were sourced from England to build this exceptional home.
Much of the interior woodwork was imported as well. At
one time it was the residence of Lord ran Fairly
(35:05):
as Governor of New Zealand. Sort of makes sense when
you have a look at it online. It's quite phenomenal.
This property is like no other built on rock. It
stood as sentinel overlooking the district for one hundred and
thirty five plus years, five generations and will stand for
many more. By the way, it's it's not like it was.
It's been left alone. It's been beautifully looked after. And
(35:27):
I'm going to actually Helen Osullivan from Velocity, who is
my guest today. I've got Helen to trawl through the photos.
You probably have to take into account. It's in Timrou.
What do you reckon that property would be worth? Actually,
what would it be with In Auckland.
Speaker 4 (35:47):
I've known.
Speaker 3 (35:50):
Simply priceless, and in Timrou you could get it for
you don't have to guess. Do you want to guess?
One of a crack?
Speaker 4 (35:57):
I do see fourteen car garaging. I'm still swooning over that.
Speaker 3 (36:01):
Yeah, okay, what's three million dollars?
Speaker 4 (36:03):
You're joking three million?
Speaker 3 (36:04):
Which yeah, well, well well it's also got a chapel.
Speaker 4 (36:10):
Does that decrease the venue? Does it come the ghost?
It's got to have a ghost, surely no thing is that.
Speaker 3 (36:16):
Doesn't really look like it's got a gest. It looks
very bright and cheerful.
Speaker 4 (36:19):
That's the photography. Now you wait for a dark, gloomy
day on the moors.
Speaker 3 (36:24):
On the it's quite a spectacular property. I didn't wonder
what the extra wing was for, but it's I guess
maybe or would you that looks newer? Maybe it's for
weddings and if you're going to host I mean the chapel.
If you've got your own chapel there, you could certainly
host weddings. You've got the lawns. It's quite phenomenal though,
(36:45):
wasn't it.
Speaker 4 (36:45):
It's just sensational. It would be unbelievably priceless.
Speaker 3 (36:50):
Yes, of course, mind you all that land, this wouldn't
be a real thing. But look it's worth going to
check out. And as I say, I say every week
our property of the week, it's always worth going to
have a look because it just takes you away from
your own our own worlds for a while. And you
look at this house and your imagine what it would
be like to live there.
Speaker 4 (37:07):
M Jane car garaging in your pool table.
Speaker 3 (37:10):
Yeah fourteen. So you've got three million, and then you've
got the cost of buying another dozen cars. So and
if you happen to like Aston Martin's and Bentley's and McLaren's,
then probably your cars are going to be worth more
than the house. Fun times, fun times. Now we can
(37:30):
look at a few more texts before we wrap up.
Somebody said it's somebody said to me, it's not easier
to buy. It's still basically impossible. However, it's not spiraling
out of control price wise like it is in Australia.
Do you keep much of an eye on Australia?
Speaker 4 (37:44):
Yes, I do well in some parts. You know, certainly
Queensland is having its own little holes and crisis and
what way old you're driven by? Driven by similar issues
to out sort of issues a couple of years ago
in terms of huge and woods migration, A lot of
people coming from Sydney and melbournere I couldn't afford to
buy coming to Queensland. A lot of external migration and
(38:07):
just a failure to build and building costs are really
constraining the ability the market to expand to meet the demand.
Speaker 3 (38:14):
I sometimes wonder that with the places in Australia that
we imagine ourselves living if we're moving over there, that
we hear that property is affordable in parts of Australia,
but the parts that it's affordable, well they're not necessarily
you know, you're not living in Double Bay, Sydney area.
And there are parts of and Brisbane. Some of Brisbane's
(38:34):
property prices are through the limit, expensive, isn't it.
Speaker 4 (38:38):
I was talking to a friend in Brisbane last week
who was sort of showing me a very ordinary looking property,
very you know, modest, not bad, but it's at one
point two million for an apartment that I'm coming up
I can tell you something exactly like that in quite
a nice part upon something.
Speaker 3 (38:56):
Have I got a deal for come over here? Has
it a guess as to where that might be? But anyway, hey,
so Helen, actually, just before we before we wrap up,
the one comment we just made when we were chatting
privately was with about a minute to go, is it
could turn reasonably quickly because at the moment, with the
(39:19):
market being suppressed, you're getting developers you can't build, and
all of a sudden you've got a supply which is dropping.
And if the demand turns around, then correact.
Speaker 4 (39:27):
Demand turns back, turns on a dime, and supplies told
twenty four months away. So if you, if, and when
you can afford to buy, is the time to buy.
Speaker 3 (39:38):
And by the way, next time we have Helen on,
Helen's company is doing some very interesting work which we
can't talk about yet with one roof, and so we'll
be having a chat about the work that they've done,
and I'm sure we'll be talking about that next time
you're on, Helen. Thanks so much.
Speaker 4 (39:51):
I look forward to it. Thanks Tim, have a great.
Speaker 3 (39:53):
Weekend, excellent And we'll package up those compliments from those
callers for you has them on to mum, the parents,
goad the Google Sutherlanders Next.
Speaker 1 (40:06):
For more from the Weekend Collective, listen live to Newstalkzedbe
weekends from three pm, or follow the podcast on iHeartRadio
You're listening to the Weekend Collective podcast from News Talk
SEDB Jeamy and I can tell it we would belong
with me.
Speaker 2 (00:16):
Sing name.
Speaker 3 (00:37):
John because it Adam. Welcome back. This is the Weekend
Collective Untim Beverage and this is the one roof radio show.
We want to take your calls on eight hundred and
eighty ten eighty. You can text on nine two of sorry,
nine two nine two. So yeah, we're looking forward to
your participation this hour, so don't hold back. And for
(00:57):
this hour we're joined by Well she is from Velocity
as in the A L O, C. I T Y
and she is she is sounds like a crude way
of a bit of a clumsy way of introducing Helen O'Sullivan. Hello, Helen,
how are you?
Speaker 4 (01:12):
I'm great, Tim, I'm really well. Tanks, how are you good?
Speaker 5 (01:15):
Hey?
Speaker 3 (01:15):
Just in your words tell us about what Velocity does. So.
Speaker 4 (01:19):
Velocity is a New Zealand owned property technology company. We
have been providing service for around about ten years now
in the evaluation, management and modeling space to a lot
of banks, and in the last ten days we've actually
launched a new product for our real estate clients, which
is called Velocity nexus.
Speaker 3 (01:40):
What does that do?
Speaker 4 (01:41):
It provides our real estate agent clients with access to
all of the data that they need to enable them
to research their market and provide advice to their clients
on the market value of the properties of the homes
for the clients that they're serving.
Speaker 3 (01:56):
So what so they can get a decent steer on
what something's worth? Because I always love that question. You
ask a real estate agent, so what's the what's it worth?
Or something in your art worth what anyone is prepared
to play for it? And it's like, okay, but what
do you think someone's going to be prepared to pay
for it?
Speaker 4 (02:09):
Yes? And look, one of the things that a realisted
agent is legally obliged to do when they list to you.
If you sign a listing with a real estate agent,
they have to give you what's called a comparative market
assessment into a CMA and preparing those as a process
that takes them quite some time. And the tool that
we've developed and launched, Velocity and Excess and what brings
all of the data sources that they need in order
(02:31):
to do that into one place for the first time.
Speaker 3 (02:34):
Exciting. Actually, we just in our panel with Neva and Mark,
the topic of AI came up as inevitably, AI is
going to be a powerful tool for analyzing data and
all sorts of things for the real estate market. What
(02:55):
role do you see it taking, Well, we.
Speaker 4 (02:57):
Are already using AI and a lot of our products.
Primarily it's as part of the data ingestion process. You know,
so data, by its very nature tends to come to
you in a messy state and you need to tide
it up and clean it up. And you know, we
have free text feels that we use AI to analyze it,
put out the numbers that are in there, get the
(03:20):
sense of the topics, and then enable us to further process.
If we had people doing that, it would simply take ours.
It just wouldn't be it wouldn't be economic to do it.
So it enables us to, you know, much more quickly
and efficiently and effectively tidy up data and present it
in ways which turn it from data and into intelligence.
Speaker 3 (03:40):
Because it ties in with the first thing we're going
to talk about, which is based on a piece by
Tony Alexander on the One roof website One Rooftop Coda
in set in z and He's he's talked about the
It's basically the headline is the return of the housing
market slump, and the question is who's to blame. But
(04:01):
of course the other question is what will trigger a
turn around? And that's I was wondering about the role
of AI in terms of predicting what the market's going
to do. Do you think do you think that AI
is going to get to a point where it's going
to be able to analyze patterns and behavior and nuances
here and there and go, we think this is going
(04:21):
to happen. But of course then if people act on that,
that it might confound the predictions of AI.
Speaker 4 (04:25):
But anyway, yeah, like AI is used extensively already in investments,
So you know, an enormous amount of a lot of
a lot of investment management houses are using AI to
analyze and crunch mass data sets and enable that and
use that to generate predictions and insights, identify opportunities where
(04:47):
things are mispriced, et cetera. So you know, AI has
a huge role to play and that sort of thing.
Our automated valuation mechanisms use AI to a large extent.
You know, there are algorithms that are using data sets
and learning constantly value waiting the data and looking at
the predictions that were made and measuring them against the
(05:11):
actual data and refining and tweaking. And I often think
though with AI, if you're sort of thinking, you know,
is that gonna undermine employment? Remember the paperless office? Ah? Yes, wow,
how technology was going to resolve in this?
Speaker 3 (05:30):
I always yeah, I mean it's more of a broader
theme though, isn't it, Because I always think that, you know,
you get the technology, the techno boffins who want to
predict this very sterile future. But I always remind myself
that regardless, people need people and people want tangible things
as well. And there's it finds its place. It's like
the same thing people said, oh theater, no one's going
(05:51):
to go out to live concerts because of the law
be on your television. People are craving to go, I mean,
live concerts going off apart from them struggle to pay
for it. So yeah, I think it finds its place.
Speaker 4 (06:01):
It does. It's a tool that enables us to do more.
You still I need asked person who's looking at the
data and asking the questions of the data.
Speaker 3 (06:11):
Well, speaking of the person who's looking at the data,
Tony Alexander, who of course, is a very well known
name as an economist, analyzing and reporting in his surveys
on the real estate market. So he's the headline, as
I say, is the return of the housing market slump.
Who is to blame? He points out that while between
July and November twenty twenty three, so late last year,
(06:32):
house prices rose an average of zero point nine percent
per month, since then they've fallen by zero point three
percent per month. Confounding, well, I do remember enough predictions
of people we have on the show who are predicting
and we're going to see a ten percent rise by
the end of the year. That ain't happening, Helen, Just
to just to be on the same page, do you
(06:54):
agree we're in a slump?
Speaker 4 (06:56):
I perst think I suspect we've been in a slump
for perhaps a little bit longer than you might. We've
been in this weeslam for our while.
Speaker 3 (07:06):
Do you think we've been living in denial of it
because there were Part of that is because it had
been flat and we've seen we've obviously seen the huge
fall from those ridiculous rises and following COVID cheap money,
But do you think it's because we are now feeling
where I'm in the slump, whereas we were all it's
don't worry, it's going to go soon. It's going to
move up soon. So everyone's sort of better brace yourself,
(07:26):
get ready to get you you know what I mean?
Are we feeling more?
Speaker 4 (07:30):
I think there's an element of the turn was we
saw the turn in the market, and I guess we
anticipated an accelerating path from there. However, that was sort
of predicated on the assumption that we would start to
see inflation come down and interest rates come down and
(07:50):
a soft landing in the economy. Sort of the opposite
has happened in all three of those factors, in that
the interest rates have stayed higher for longer, and now
we have considerable level of concern I think are unemployment.
And when those two combine high cost of interest rates
(08:13):
and low confidence on your ongoing employment, that's the time
when people will tend to button back while making big commitment.
Speaker 3 (08:20):
If it was a pantomime, this this particular subject, we'd
need a villain. Okay, who's to blame? What's to blame?
Speaker 4 (08:30):
Which the economy?
Speaker 3 (08:31):
Stupid brutal that was John Keith did. Oh yeah, I
think you're right, Yeah, whose faults are? Okay, look as
thing as we had to have, it's one nuanced.
Speaker 4 (08:49):
But this, this is the recession. We sort of had
to have to get the inflation genie back into the bottle.
And maybe we talk to Souse into thinking that the
recession wouldn't hurt that much and it would sort of
just float through through without us really having to feel it.
(09:09):
And I think inflation has persisted for longer than anyone anticipated,
around about six twelve, yeah, six to eight months ago
last year.
Speaker 3 (09:19):
So inflation's to blame because we had to get that
under control and everything follows from that. And if we
want to, we could play the game of who caused
inflation and all that, but that wouldn't be helping us
too much with our property thoughts, would it.
Speaker 4 (09:30):
Well, you know, there's so many people. Could somebody go
and knock on the door of the increases and energy
costs in Europe? Where did that come from? The invasion
of Ukraine? Increase in grain prices? Where did that come from?
Speaker 3 (09:42):
Invasion of Ukraine?
Speaker 4 (09:43):
Invasion of Ukraine? Increases in transport lo justic costs? Where
did that come from? The disaster? The shamozl that we
had after COVID. You know, there are so many causes.
The problem with trying to find yourself a convenient pantomime
villain is that facts don't generally lend themselves to such
tidy analyses.
Speaker 3 (10:03):
No, I mean it's more fun. I may of course
we've we've had a crack at Adrian or and of course.
Speaker 4 (10:08):
He probably has a jolly good crack right back. He's
good like that.
Speaker 3 (10:12):
Do you think he minds being the villain?
Speaker 4 (10:14):
I don't think you'd take that job if you.
Speaker 3 (10:16):
Did, I guess not. Okay, well, I guess so the
question is for you on out there as well, A
W one hundred eighty ten eighty. I actually I'd like
to know if there are any smarty pants out there
who predicted that we'd be in the slump and not
looking like we're going to get out of it by
the end of the year, which would be My prediction
(10:36):
is that we're not going to get out of it
before Christmas. But I'm not an expert, as you know,
how long do you think it will take, Helen? But
or more importantly, what will it take for us to
get out of the slump?
Speaker 4 (10:52):
I do think it's interesting with these things to look
back in history at previous slumps. And of course I
was the chief executive of the Real Estate Institute back
in twenty ten when first interview I ever did on
property price is the fiery Mary Wilson. Her first question was,
so not looking good for property market, is it? And
(11:15):
we would all now be delighted if we could buy
houses for the prices that I was talking about at.
Speaker 3 (11:21):
The time twenty ten. Yeah, I do. It is all
cyclical back when things sort of when it went from
a hot house being three hundred and fifty four hundred
thousand to sort of outrageously five or six hundred thousand. Gosh,
wouldn't we love dream of harve.
Speaker 4 (11:33):
Or six hundred thousand dollars now?
Speaker 3 (11:36):
So we'd love to hear from you on this as well.
Eight hundred eighty ten eighty text nine two nine two.
You can tell us if you predicted the fact that
the slump was going to be as long as it's
or as bad as it is or as it feels,
and maybe how much how much is how much does
human emotion play a part in.
Speaker 4 (11:55):
The stuff, and enormous Ultimately a huge amount of this
comes down to confidence, right and the slump is lease about.
You know, it's not that we're seeing vast decreases and prices.
It's really we're seeing enormous decreases and transactions. People decide
to sit tight and hold on and.
Speaker 3 (12:14):
Wait to ride it out because no one wants to
drop their price. They're just rather hold on to it.
Speaker 4 (12:19):
Correct.
Speaker 3 (12:19):
So the first thing that happens is people hold and
then you have a decrease.
Speaker 4 (12:23):
And and look, if you're trading in the same market,
if you're buying and selling, then it's not so bad
because you what you lose on the swings you make
upon the roundabouts. If you are needing to get in
for the first time or get out permanently, then it
becomes very painful because you actually realize I'll potentially realize
(12:45):
a cash loss at that point in time. And that's
when people decide to make other decisions and hang in
there and ride out the slump.
Speaker 3 (12:53):
Okay, so we want your reckons on this. What do
you think is going to happen with us getting out
of the slump, and what are the factors that will
dictate that because you know, obviously these things are always
nuanced and you've got job losses we've got the cost
of money most I do can think of a couple
of property commentators that'd say it's the cost of money
will be the first thing. But and again, if the
(13:14):
economy's flattened, people are losing their jobs and not confident
about their job prospects, does that reduce the demand as
well for a bit longer? What do you reckon? I wait,
one hundred eighty ten and eighty. That's that's why I
got a C minus in economics. By the way, with
that poor explanation. Well maybe it was a C, but
it didn't have a B in front of it. That
was for sure. It's twenty past four. We'll be back
taking your cause in just a moment. This is News Talks.
(13:35):
He'd be sends you on your way and restless sties
today and welcome back to the One Roof Radio Show.
My guest is Helen O Salondrevan from Velocity V A
L O C I T Y and their website, of
(13:57):
course is Velocity dot dot nz dot cod it z.
You can't miss it anyways, dot coded DZ. Helen. Right,
we're going to take some calls. What is causing the slump?
What's going to get us out of it, oh eight,
one hundred and eighty ten eighty, And if you can
tell us when then, you know, wouldn't that be great
if we get those predictions and nail them. But of
course predicting in real estate not the easiest thing to do,
(14:19):
is it. It will recover at some stage, though, Tim, Hello, Ry.
Speaker 2 (14:24):
Tim, I would just sit in the comment of this.
I think the slum's feed around a little longer. And
I wonder these days, in compared to days gone by,
it's a little insulated by the rich are so rich
that there's not a day goes by we don't hear
something can your sold, first state on the market, or
there's a record property still, you know, the real high
(14:45):
end is just so elective and twenty to thirty million
dollar properties and Queenstown we're getting constant pressed about records
being set. And I wonder whether it's sort of almost
numbed people off to the real market, which is that's
probably left two or three percent of the market, whereas
the reality the real market been suffering longer and harder consequences.
(15:09):
They're taking a little longer than eating. But we've got
a lot of positives at that top end. That we're
constantly exposed to these days.
Speaker 3 (15:17):
He I have noticed a few of those headlines which,
in the absence of anything else, you'd think, Oh, the
market's booming. Do you think there's something to that the
top end of town is making it look better than
it is.
Speaker 4 (15:27):
I think there's always those stories. I mean, real estate
agents do well. We love to talk about property in
New Zealand, right, Barbecue conversations have been about property in
New Zealand for longer than anyone can remember. And those
are the stories that it's the stories that are unusual
and outliers that attract attention.
Speaker 3 (15:49):
I guess, yeah, what do you reckon? Tim?
Speaker 4 (15:53):
Yeah?
Speaker 2 (15:53):
I think you're right, but more so than ever. I mean,
there's just it's not a bad thing, it's just reality.
But you know, the market, from what I see in
the mid two a two million dollar market, there's a
pretty desperate trouble. Yet you know, you do see these
massive records every week with the press one almost it's buddy, hell,
(16:16):
there's so much.
Speaker 4 (16:18):
Going on.
Speaker 2 (16:19):
Could I also say that your gift talent is incredibly
eloquent and accurate. But it's a pleasure to hear here.
Speaker 3 (16:27):
You not that it would be a plant.
Speaker 2 (16:36):
It's just it's a pleasure to hear somebody so confident
and so well equipped, you know, combining the abuse with
pleadyon knowledge. It's a pleasure.
Speaker 3 (16:46):
Good on your term, Thank you for that. And Joe,
can you make sure you save that little bit of
audio for Helen.
Speaker 4 (16:54):
Thanks.
Speaker 3 (16:55):
I thought you might replay it back at the office.
But of course, Hey mom, Hey, good on your term.
Thanks for you.
Speaker 6 (17:00):
Call Royce Hello, Hello, Hello, I of the Chuckery sens
And I wonder if a lot of the problem come
down to Quet's had amasing too much money creation. I
wonder if that's something that you think might be an issue.
Speaker 3 (17:15):
Well, that would have caused the boom in the first place.
Do you think that that's also means that we crashed
a lot.
Speaker 6 (17:21):
Or what Well, I think in order to well personally,
I think that in order to get a lot of
that money back out of the system, it's going to
take a bit of time, and I think that you're
going to have the opposite, the opposite effect, which is
you know, job losses, you know, less spending all around
the show.
Speaker 4 (17:41):
Yeah, look, I think that's exactly the point. Tony Alexander
is is well it's a issue that Tony Alexander is
pointing to. In order to wind back that expansion obviously
of the money supply without a commensurate an increase in
the productive economy aka inflation. The only way you get
that back down is to as tighten up the ratchets.
(18:02):
And you know, that's that's the phase that we're in
at the moment. The question is just really, are we
ast on near the bottom of that turn?
Speaker 3 (18:11):
Where about to you in the market, Royce, I'm.
Speaker 6 (18:15):
Just a novice thinking your financi But I did get
a property before the big boom, so I'm in the game. Yeah, yeah,
I just I'm just learning about money creation at the moment,
and like I've heard a lot of stuff about still
not being able to get it, like from the last
quantidat of easing, run get that money out before they
(18:38):
put more money back in. So I just wonder if
there's somewhat like a bit of a bubble forming that
no one's kind of aware of.
Speaker 3 (18:46):
As such, do you think also that the slump is
sort of inversely proportional to this, to the you know,
the amount of money or the proportion of the slump
needs to match how much they pumped money in with
the Quantitative Agency easing, So because we did so much
of it, we're in for a bigger slump in other words,
Is that where you're getting at.
Speaker 6 (19:04):
Yeah, I think it's like you really need to take
a lot back and I think that's going to hurt
quite a lot so and I don't see inflation even
but it's still not quite under control yet, so you know,
a lot more job losses long straight, so I don't know,
(19:25):
it's probably going to get a lot worse.
Speaker 4 (19:28):
I don't know, it's not under control of the new zeally,
but if we look overseas in the UK, they have
already they're awfully close to the being back within the
Italian inflation and Europe is we inflash and Genie started
spread internationally. I think we can look, you know, you're
(19:49):
already sort of starting to see the green shirts start
to spread in the UK, and you know, I don't
think it's too far away. But we do have a
tendency and enzi that took ourselves into a giant slump
and gear you know, stay as depressed as possible for
as long as possible.
Speaker 3 (20:09):
Yeah, okay, hey, good on your right, Thanks for your mate,
actually do. Our emotions tend to be a little bit
on the extremes about property as well. So for instance,
I have hosted enough property shows here to remember the
the the glea or the just the the property markets.
(20:31):
No brainer, you've got to get it. It's just going
to go, go, go go, and it's all positive, positive,
But it was really like this desperate thing you've got
to get in, You've got to get in. And now
it's do we match that further with market's really mounted
right now it's going to be urged as I'm not
going to get in and I'm not even thinking about it.
Speaker 4 (20:51):
I think we do it. It's become. But yeah, we're
you know, we don't really seem to have a happy
medium medium. We are either delight, we're at the peaks,
or we're in the we're in the trough. There's there's
no happy bit.
Speaker 3 (21:08):
It'll continue, But what do you think that we will
find a sort of more of an equilibrium where we
don't see these ridiculous extremes of boom or but you know, bust,
not as bust, but.
Speaker 4 (21:18):
You know what I mean, Yeah, yeah, I think it's
the other thing. You know, price is not going up
is not the same as a catastrophic crashing of the market.
Speaker 3 (21:27):
No, well it's not and it's not going to do that,
is it. I think we can. I think we can.
We can say that that's not going to happen. Mean,
but some people be like, oh, I've had people, so
I reckon the property. There's going to be a big
forces SI the long way to go.
Speaker 4 (21:38):
It's like I've seen people. I've heard people are hopefully
predicted that repeatedly. Every time we get to these kind
of times, it never happens. And you know, generally at
some point in time that people who are predicting thirty
percent price decreases are confidently predicting thirty percent price increases,
and nobody ever seems to get the get the get
(22:00):
the book out and check the receipts.
Speaker 3 (22:02):
Okay, here's a question what will reverse the fortunes of
the property market to get it moving again? And obviously
it's you know, a recipe usually involves more than one ingredient,
but predominantly will it be just the fact that money
becomes cheap again, or do we actually also need to
see some real productivity return to New Zealand in other sectors?
(22:24):
So the economy starts to feel a bit more. You know,
life's good, there's hope, I'm not going to lose my
job tomorrow.
Speaker 4 (22:31):
I think the confidence and employment piece is part of it.
But again, it's really important to put this in historic context. Right,
our unemployment rate at the moment, it's still.
Speaker 3 (22:41):
Just over four It's pretty low.
Speaker 4 (22:43):
It's still historically really.
Speaker 3 (22:45):
Low nineteen twenty eight exactly.
Speaker 4 (22:47):
We're not talking, you know, seven to nine percent or
even five percent. If you are that person who is
feeling that concern around their job, it's you know, that
doesn't help. But from an overall health of the economy
point of view, it is an important piece of context.
Speaker 3 (23:08):
Is our media lacking a bit of balance on the
reporting of this, then on the reporting of this, or
just on the reporting of just the way things are
with the economy. I know, as you say, and you
put it in context, unemployments at about four percent, But
it feels like the discussion in media and I know
I probably bang on about the media work in the media,
what can I say, But it just feels that we
(23:29):
are lacking of a little bit. So when you say that,
there'll be people listening right now who will go, oh,
really God, I thought that doesn't sound so bad. That
will be a news flash to them. And that's why
I wonder whether there's this lack of a bigger picture
in the overall media coverage because we're always going for
something that will read well on Instagram or the Facebook
sort of page or whatever.
Speaker 5 (23:50):
Yeah.
Speaker 4 (23:51):
I do think that, you know, reducing our capability to
ingest information to set one hundred and sixty character the
step its may not have been that good for the
human race just generally. I mean that's a philosophical point.
Speaker 6 (24:08):
Yeah.
Speaker 3 (24:08):
Well, that's when we get you back on overnight talkback
and you have a night talkback host. It's Helen and
Sullivan Velocity as one hundred and sixty characters ruined us. Actually,
that's a great talkback topic. By the way, we want
to hear from you, though, what is it going to
take to turn around? Because let's just remember that for
people who are first home buyers, I guess what they're
(24:30):
doing right now is one they're seeing if they can
borrow what they need. But at the moment, what we're
reading it's good news for them generally, is that the
market's not suddenly escaping before they get their capital together
and their loans and all that sort of thing. So
as always, there's a good news story up to a point,
isn't there for people who want to get in the market,
(24:51):
Because you really are people really have been just given
up and going to ask stuff this they're probably thinking, oh, hell,
hell in a minute.
Speaker 4 (25:00):
That's right, And because vendors are very realistic about the
market after the last four to six months of trajectory
in the market, so vendors who want to sell are
much more likely to consider sensible offers. The pace of
the market isn't moving as fast. You know, things aren't
(25:21):
selling within two to three days, which is really difficult
for a first time buy. You need time to do
your d D, you need time to get your finance
in order.
Speaker 3 (25:29):
So in your confidence, I mean a big deal buying
a house, that's huge actually, because.
Speaker 4 (25:37):
I'm buying a home is the biggie. You're buying a home,
and then I suppose is the big thing. You know,
if you can afford it, and you can give yourself
that certainty that you can afford it. You're buying a home.
You're not buying something you're looking to flick in six
months time. So whether the price is going to go
up or down in six months time, isn't Actually the
point is it broadly good value? Can you afford the repayments?
(26:03):
And you know, if you're planning to stay, you know,
factor in planning to stay at least three to five years,
and suddenly what happens to the price in that period
of time actually isn't all that relevant.
Speaker 3 (26:16):
No, But having the time to make your decision before
it's snatched away, but in the frenzy of an overheated
market is gold. Yeah. Actually, one of the reasons I
asked about the productivity side of New Zealand and you know,
the confidence returning so people are not worried about losing
their jobs. Is that Tony also talks about and he
says he was just reading from his point as article
(26:36):
here it says young bars are pulling back and I
feel so this is Tony's feeling that it's due to
increasing insecurity in the job market, especially among those who
haven't seen a weak labor market before, or if they
have the reserve banking gun. We're stepping into boost things
for them, but no one is there to help this
time around. Yeah, I am am. I surprised that younger
(26:58):
buys are pulling back. I would have thought maybe that
is part of it.
Speaker 4 (27:01):
If you love that younger buys, The younger young are
usually most disproportionately affected when there is an employment market downturn,
so I can understand that that is the segment of
the market that would have the least sense of job security.
Speaker 3 (27:21):
You know, what are you guys seeing with investors at
the moment, because they still seem to be staying out
where to me people say they a school of thought
that would say it's these times when the canny investors
will get in.
Speaker 4 (27:37):
But yes, look, the challenge at the moment for any
investor is just around the cash flow, and that's that
comes down to interests costs as well.
Speaker 3 (27:47):
Yeah, okay, let's have a look at a few texts here.
Property talk has become our problem. I wish we invested
in business, innovation, science, farming. But this person says, but
your guest is very professional. However, fantastic, look at horomise.
Speaker 4 (28:02):
I'm not just paying people to write you these texts.
Speaker 3 (28:06):
Actually, I don't think I've had someone call up and say,
by the way, you are anyway, let's take the comments
from wherever they can tell you what we'll come back
with some texts. We've got some spear lines on eight
hundred and eighty and eighty. How long do you think
the slump is going to last? As commented by Tony Alexander,
I think we all realize the market's soft. How long
(28:26):
is it going to be soft for? What do you
think the signs will be that will make you think, actually,
maybe I need to dust off my my lending. What
is the word my This is an expression for.
Speaker 4 (28:37):
Dust off your pocket.
Speaker 3 (28:38):
I need to get my my borrowing approved. That's the
one dust off you finance finance. That's the word.
Speaker 4 (28:43):
It's improved.
Speaker 3 (28:44):
That's why you're here. Clarity of thought. Twenty one minutes
to five newstalks'd be.
Speaker 2 (28:55):
Yes.
Speaker 3 (28:55):
Welcome back to the Weekend Collective. This is the one
Roof radio show. I'm Tim Beveridge. My guest is Helena
sullivanan from Velocity. Just quickly, but one text before we
go to our next caller. The boom our property could
have solved one point eight million. We sold it three
years later for one point three so I think the
adjustment has been made, says Lucy. Yeah, thanks for that, Lucy. Right,
(29:16):
let's go to another caller.
Speaker 5 (29:18):
Kathy High, Hi, how are you doing?
Speaker 3 (29:21):
I think we're pretty good.
Speaker 5 (29:22):
Actually, okay, listener, I just wanted to make a couple
of comments on this. I'm an American, I've been living
here for fifty years, but I have never quite gotten
over the idea and watching the consequences of the population here.
Looking at at property as a market we have created,
(29:46):
it's unproductive as a business man.
Speaker 3 (29:49):
What's that you mean as it's like a big part
of our investment scenario here you.
Speaker 5 (29:53):
Mean, yes, yes, and we see it as a market
rather than as you know, like this is a place
where people live and we need to be able to
make it affordable. When you have a market, you know,
the American stock market, for example, the idea is to
be able to make things more and more expensive. Then
it's the same with housing. But when you make housing
(30:14):
more and more expensive, fewer and fewer people can afford
to be in it, and then you create inflation, and
then inflation creates cutbacks and jobs, and so it's it's
a negative circle.
Speaker 3 (30:28):
So we're too much in love with property as a
way of making loving making money, making love making money.
Speaker 5 (30:36):
Look bacon love. Yeah, sorry I can't say, but you know,
it's that's the outcome.
Speaker 3 (30:45):
Okay, I'll throw that. Well, let's throw that to Let's
throw that to Helen. What are you are we too
much in love with property?
Speaker 4 (30:53):
It's a really interesting thought. I was listening to a
podcast today which is talking about they post the nineteen
eighty for election and the events that followed that. There's
a school of thought says, so many people were so
badly burned in the eighty seven stock market crash that
as a nation, we've become much more focused on brick
and tile investments, things that you can touch and see
(31:15):
and feel, and our capital markets are lack liquidity and
are pretty thin relative to something like the US capital markets.
And as a result, I think there is a large
proportion of New Zealand is it they see housing as
the only safe investment because that's the one that they
(31:36):
can see, touch and have most influences.
Speaker 3 (31:39):
And actually, if you were a canny investor and it
made some solid investments in the stock markets, there's been
some amazing gains in there in the right stocks, but
of course you've got to pack them.
Speaker 4 (31:47):
I think, can we say is starting to change that
in manywhears. I think that's a great thing.
Speaker 3 (31:51):
Yeah, one here, one person here says it will need
an interest rate drop of at least one percent to
make any difference to the market, but unlikely we'll see
a half percent drop by twenty twenty five. That sounds
like a really good comment. I think there's you could
argue that they're making a good point.
Speaker 4 (32:07):
What do you think I think, more than anything else,
people need to see a trajectory downwards.
Speaker 3 (32:12):
Yeah, because yes, like that, like interest rates are starting
to drop, yeap renew and yeah, so.
Speaker 4 (32:18):
I can afford to get in now for a year
at that rate, I can anticipate having a cheaper interest
rate behind that.
Speaker 3 (32:26):
By the way, just as we had Kathy talking about
the American market market, have you do you ever trawl
through Zillow or the American real estate?
Speaker 4 (32:34):
Of course constantly. There are some.
Speaker 3 (32:37):
Places and one else right move right move, that's the
British one, okay, because there are some places where, man,
you get some bang for your buck.
Speaker 4 (32:47):
Oh god. Yeah. And there's but there's also a magnificent
Twitter account called Zillo Gone Wild. They have some absolute crackers.
It's just unbelievable things, things that look like normal condos
and Texas and they've got some kind of horrendous, freakish
dungeon downstairs. And then it's castles another week and just
(33:08):
crazy Las Vegas pink pads, and it's just as marvelous,
all right.
Speaker 3 (33:11):
I used to when Detroit was in trouble, which it
still is. I think, I mean there was a I
used to go and see what you get for Detroit
for I mean ten thousand bucks. You know you get
a I mean they weren't well locked after let's face it.
Speaker 4 (33:22):
But anyway you could for ten thousand dollars. But then
you'd have to live there.
Speaker 3 (33:27):
Yes, you would zilla gone wild.
Speaker 6 (33:29):
I think.
Speaker 3 (33:30):
I think there's people listening right now have made noted that,
and they can come back and tell us what they think. Well, actually,
we'll be back in just a moment. This is news talk.
Z'd be thirteen minutes to five.
Speaker 4 (33:40):
What your son understand?
Speaker 3 (33:42):
It's such chutch a great and welcome back to the
(34:08):
weekend Left of This is the one roof radio show.
And at that time of the week it's nine minutes to.
Speaker 1 (34:14):
Five, the one roof property of the week on the
Weekend Collective.
Speaker 3 (34:20):
And wow, the one roof property of the week is
quite something. It's in Timaru it's Castle Clermont on twenty
of great address, twenty two Mount Horrible Road, and there's
nothing horrible about this fourteen bedrooms, five bathrooms, fourteen car garage,
(34:42):
eighteen point sixty three hectares. It really is a gorgeous
property built with the granite between the years of eighteen
eighty four and eighteen eighty seven. And it took, yes,
it took artisans close to three years to construct. Stonemason's
carpenters were sourced from England to build this exceptional home.
Much of the interior woodwork was imported as well. At
one time it was the residence of Lord ran Fairly
(35:05):
as Governor of New Zealand. Sort of makes sense when
you have a look at it online. It's quite phenomenal.
This property is like no other built on rock. It
stood as sentinel overlooking the district for one hundred and
thirty five plus years, five generations and will stand for
many more. By the way, it's it's not like it was.
It's been left alone. It's been beautifully looked after. And
(35:27):
I'm going to actually Helen Osullivan from Velocity, who is
my guest today. I've got Helen to trawl through the photos.
You probably have to take into account. It's in Timrou.
What do you reckon that property would be worth? Actually,
what would it be with In Auckland.
Speaker 4 (35:47):
I've known.
Speaker 3 (35:50):
Simply priceless, and in Timrou you could get it for
you don't have to guess. Do you want to guess?
One of a crack?
Speaker 4 (35:57):
I do see fourteen car garaging. I'm still swooning over that.
Speaker 3 (36:01):
Yeah, okay, what's three million dollars?
Speaker 4 (36:03):
You're joking three million?
Speaker 3 (36:04):
Which yeah, well, well well it's also got a chapel.
Speaker 4 (36:10):
Does that decrease the venue? Does it come the ghost?
It's got to have a ghost, surely no thing is that.
Speaker 3 (36:16):
Doesn't really look like it's got a gest. It looks
very bright and cheerful.
Speaker 4 (36:19):
That's the photography. Now you wait for a dark, gloomy
day on the moors.
Speaker 3 (36:24):
On the it's quite a spectacular property. I didn't wonder
what the extra wing was for, but it's I guess
maybe or would you that looks newer? Maybe it's for
weddings and if you're going to host I mean the chapel.
If you've got your own chapel there, you could certainly
host weddings. You've got the lawns. It's quite phenomenal though,
(36:45):
wasn't it.
Speaker 4 (36:45):
It's just sensational. It would be unbelievably priceless.
Speaker 3 (36:50):
Yes, of course, mind you all that land, this wouldn't
be a real thing. But look it's worth going to
check out. And as I say, I say every week
our property of the week, it's always worth going to
have a look because it just takes you away from
your own our own worlds for a while. And you
look at this house and your imagine what it would
be like to live there.
Speaker 4 (37:07):
M Jane car garaging in your pool table.
Speaker 3 (37:10):
Yeah fourteen. So you've got three million, and then you've
got the cost of buying another dozen cars. So and
if you happen to like Aston Martin's and Bentley's and McLaren's,
then probably your cars are going to be worth more
than the house. Fun times, fun times. Now we can
(37:30):
look at a few more texts before we wrap up.
Somebody said it's somebody said to me, it's not easier
to buy. It's still basically impossible. However, it's not spiraling
out of control price wise like it is in Australia.
Do you keep much of an eye on Australia?
Speaker 4 (37:44):
Yes, I do well in some parts. You know, certainly
Queensland is having its own little holes and crisis and
what way old you're driven by? Driven by similar issues
to out sort of issues a couple of years ago
in terms of huge and woods migration, A lot of
people coming from Sydney and melbournere I couldn't afford to
buy coming to Queensland. A lot of external migration and
(38:07):
just a failure to build and building costs are really
constraining the ability the market to expand to meet the demand.
Speaker 3 (38:14):
I sometimes wonder that with the places in Australia that
we imagine ourselves living if we're moving over there, that
we hear that property is affordable in parts of Australia,
but the parts that it's affordable, well they're not necessarily
you know, you're not living in Double Bay, Sydney area.
And there are parts of and Brisbane. Some of Brisbane's
(38:34):
property prices are through the limit, expensive, isn't it.
Speaker 4 (38:38):
I was talking to a friend in Brisbane last week
who was sort of showing me a very ordinary looking property,
very you know, modest, not bad, but it's at one
point two million for an apartment that I'm coming up
I can tell you something exactly like that in quite
a nice part upon something.
Speaker 3 (38:56):
Have I got a deal for come over here? Has
it a guess as to where that might be? But anyway, hey,
so Helen, actually, just before we before we wrap up,
the one comment we just made when we were chatting
privately was with about a minute to go, is it
could turn reasonably quickly because at the moment, with the
(39:19):
market being suppressed, you're getting developers you can't build, and
all of a sudden you've got a supply which is dropping.
And if the demand turns around, then correact.
Speaker 4 (39:27):
Demand turns back, turns on a dime, and supplies told
twenty four months away. So if you, if, and when
you can afford to buy, is the time to buy.
Speaker 3 (39:38):
And by the way, next time we have Helen on,
Helen's company is doing some very interesting work which we
can't talk about yet with one roof, and so we'll
be having a chat about the work that they've done,
and I'm sure we'll be talking about that next time
you're on, Helen. Thanks so much.
Speaker 4 (39:51):
I look forward to it. Thanks Tim, have a great.
Speaker 3 (39:53):
Weekend, excellent And we'll package up those compliments from those
callers for you has them on to mum, the parents,
goad the Google Sutherlanders Next.
Speaker 1 (40:06):
For more from the Weekend Collective, listen live to Newstalkzedbe
weekends from three pm, or follow the podcast on iHeartRadio
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