August 31, 2024 • 39 mins
With interest rates dropping, some economists are predicting higher house prices by the end of the year at the soonest.
Helen O'Sullivan joins Tim Beveridge on The Weekend Collective to discuss the best time to buy.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:09):
Be and welcome back to the Weekend Collective. This is
the one Roof Radio show. We want your calls on
O eight one hundred and eighty ten eighty text on
nine two nine two. By the way, if you've missed
any of our hours, I always like to say this
at this time, especially given that we've just had another
rollicking panel with Simon Wilson and new guest Paul Spain.
You can go and check out the Weekend Collective podcast
(00:30):
and it'll all be there for you. Go to iHeartRadio
just look for the Weekend Collective. But as I say,
right now, it is time for the one Routhfradio show.
My guest is she is CEO of Actually, funnily enough,
in my notes that just says CEO of real estate
full stop, which makes you sound like you're just in
charge of the whole industry. But it's actually CEO of
CEO of real estate for Velocity.
Speaker 3 (00:51):
Correct. Yes, I don't mind. I can Queen of the
world kind of title.
Speaker 2 (00:56):
It is, I look at it. See Hello, No Sullivan,
So I didn't give everyone your name, but people have
listened will know who you are. And if they don't,
they can just google who is the CEO of real estate?
I mean worldwide global. It's like, you know, real estate,
that's me, that's me. So actually tell us a little
bit about it, tell us a little bit about your role,
(01:16):
Helen and you.
Speaker 3 (01:18):
Okay, So look, I've been kicking around the property industry
for way too long really in various guys is and
just just you know, keep coming back to it because
you know, it's where home begins really and that's what's
what I love about it. But Velocity is the business
I'm working with, and we are a data company that
focuses on property. We are the data partner for One Roof,
(01:40):
who are of course a magnificent real estate website.
Speaker 2 (01:43):
Yes, and this is the One Roof radio.
Speaker 3 (01:46):
Radio show, so effector here I am.
Speaker 2 (01:48):
Actually One Roof is also doing very I think we
had a bit of a there was a I think
run One Roof is doing very well as as just
an initiative amens in me as well, isn't it?
Speaker 3 (01:56):
It is, as I understand it, doing extremely well.
Speaker 2 (01:59):
I think the expression is rocking and rolling, rocking.
Speaker 3 (02:01):
And rolling because it's got a great data partner behind it.
Speaker 2 (02:04):
Yes, and of course you know, and be given that
we have one ref radio show, I think their success
is down to you and me.
Speaker 3 (02:09):
I would say so to more you than me.
Speaker 2 (02:13):
Anyway. Actually, what were your first forays into real estate?
Speaker 3 (02:18):
I first was worked with Crocker's Property Group and they're
a property management body, corporate company in Auckland with a
great presence. And from there was the CEO of the
Real Estate Institute for a number of years, which is
where I first met the Velocity team. And then I
was CEO of Ockham Residential, who are progressive Auckland property developer.
Speaker 2 (02:40):
Yeah. Yeah, and actually, and you are quite a fan
of this. I think you might even even a potential
that you might even live in one of their properties.
Speaker 3 (02:48):
I may have lived in three of their properties.
Speaker 2 (02:50):
Really just not at the same time.
Speaker 3 (02:53):
When I drink the kool aid, I drink it proper.
Speaker 2 (02:57):
It almost sounds like you still like you have three
that you like. Today, I think we'll just go back
to the one, you know, one.
Speaker 3 (03:03):
Quite because they're all within a lead two and a
half kilometers of each other, so they really would be silly.
Speaker 2 (03:08):
Hey, So look what we want to talk about today
is the question about when and for people to get
into property or if they're thinking about making decision, because
a lot of the time people sit on the fringes
and they think, oh, look, I really need to get
my ducks lined up. Maybe I need to sort out
some finance so I can actually get moving. But so
we're going to talk about the simple question is is
(03:30):
now the time to buy? But there have been some
predictions from I've seen predictions both ways, from economists predicting
that house rises will continue to fall, whether it's plausible
with the interest rate cuts. I've seen some predictions that
I mean not a lot, but that maybe there's still
going to be a bit of a sag in the market.
Might be the way of summing things up. What's your
(03:50):
take on where things are at? I mean, no one's
going to get every prediction right, and predictions a sort
of good way to what do they say, Trying to
make a prediction is a good way to hear God laughing.
But what's your take on where things are at with
the market? Because while interest rates, you know, I have
turned the banks were sort of ahead of that. Anyway,
how much more is it going to fall? But of course,
(04:12):
when money does get cheaper all of a sudden, there
is a real energy of people thinking now's the time.
What's your take on it?
Speaker 3 (04:18):
So, I mean the key thing about interest rates starting
to fall is that that really changes affordability base. You know,
if you can, say on one thousand dollars a week,
as the interest rates starts to come down, what you
can potentially borrow with that money, it starts to increase
and brings properties that much closer to being able to
(04:39):
be affordable. So that coupled with the fact that the
track is now downwards as opposed to upwards, so you
have some confidence that that affordability will continue. And in fact,
if you buy now in a year's time, the interest
rates will be lower, as opposed to buy now in
a year's time, you might have to find more to
cover your interest bill. So it does look to me
(05:02):
that the factors are starting to line up for or
a turn in the market. Just in the last just
since the interest change from the Reserve Bank came through,
I'm starting to see clearance rates that auctions start to improve.
And in addition to more of the properties being passed
in with bids having been made as opposed to being
(05:25):
passed in with no bids.
Speaker 2 (05:26):
So the data is telling a story that something.
Speaker 3 (05:29):
So the data is telling us that the transaction figures
might start to move again, because there's sort of there's
always three. To me, there's three key metrics in the
housing market. One is price, and that's the obvious one
that people talk about, But the other two that are
I think even just as important other days on market.
But the biggest one to me is the volumes, the
(05:50):
number of transactions. And at the moment, the transaction figures
are incredibly low compared to where we've seen them in
the past.
Speaker 2 (05:58):
And what's an example of a number of what we
might have seen when things are going gag busters versus
where we're at now. So back when so I can
see you swiping on your touchscreen. You are in Velocity from.
Speaker 3 (06:15):
Velocity and we are a data company and.
Speaker 2 (06:18):
Data which probably makes you feel under a bit of
pressure when you come because you can't just sort of go, well,
let's say roughly this.
Speaker 3 (06:24):
Yeah, I sort of have to say roughly something roughly
exactly this. When I get back to the office on Monday,
I'll get I'll get pitchfork shut sure thrown at me.
Speaker 2 (06:33):
Fantastic, So look.
Speaker 3 (06:34):
Back in a quarter four of twenty twenty, they're around
about thirty seven thousand settled sales, and in the latest
corner quarter there's been about sixteen and a half thousand
settled wow.
Speaker 2 (06:45):
Lesson.
Speaker 3 (06:45):
So that's the kind of style we're talking about.
Speaker 2 (06:48):
Is that as far as being saggy, I'm trying to say, Tim.
Speaker 4 (06:58):
Sorry, that's as far as as far as the market
being saggy, Let's find another word for that.
Speaker 2 (07:14):
God, you unsttle me with that one. Anyway, what's what's
another word for it? It's actually fair enough? Is that
a fair enough word for the market.
Speaker 3 (07:23):
Look, it's subdued, I think is probably the term we
analysts would like to.
Speaker 2 (07:28):
Use, Tim, What that got me? Okay? So it's subdued
as far as as a subdued market goes? How how
how subdued is it? Is it?
Speaker 3 (07:43):
Look? Those are those are pretty low transaction figures, you know?
That is that is about as subdued as she gets.
Speaker 2 (07:52):
Okay, So that would okay? And so in terms of where,
because let's I've got to remind myself of the question
we've got is now the time to buy if you are,
and especially for people who are thinking about investing because
there are a lot of people have been calling their
heels on the investment, and so they will be to me,
I was summat as now is the time to think
about it. But I'm not an active participant in that's
(08:15):
in that sense.
Speaker 3 (08:16):
No, Look, so what I what we tend to see
in this in the turning of the cycles. The cycle
turns and then things start to move away. We've there's
been a real contraction of supply. And the thing you
have to remember about supply is that supply takes a
really has a really long pipeline. It takes a long
(08:37):
time for it to turn on. And whereas demand turns
back on over a couple of weeks, the interest rates
come off. We start to see an increasing track of affordability.
People start to get back into the market and think
that you know, if they're ready, there's you know, there's
maybe some some showers have been on the market for
a while who are motivated. It is a good time
(09:00):
if you are poised and ready to act, to start
to act before others start joining you. That is when
you will start to see the prices much.
Speaker 2 (09:07):
I thought that it was quite a bit of supply.
Am I mistaken on that? This is it because of
the balance between supply and demand and confusing.
Speaker 3 (09:16):
I'm talking about two things. I suppose when I talk
about supply, I mean supply of new stock. So consent
figures the number of houses consented has dropped significantly over
the past four quarters, which means that in a year's time,
in two years time, those new houses will not be
coming to market. Because the house gets consented, that doesn't
necessarily means it gets started, and it doesn't necessarily means
(09:38):
to get built. Developers are really feeling the pressure in
terms of sales off the plans, and when they stop
selling properties off the houses off the plans, they will
stop because they don't build those they don't start those
developments that don't build those developments still have got those sales.
Speaker 2 (09:56):
Intuitively, that does tell me that when demand does cac
in that there may be a bit of a reasonably
chunky amount of growth, but potential there because you're not
getting the new stock coming on to sort of ameliorate
or to match.
Speaker 3 (10:11):
The band, and you don't have matching supply. And the
matching supply is all of existing houses who you know,
in most of those houses have that occupant, so you
know in the absence of significant immigration, which although to
be fair we do have a bit of that going
on as well, you start to get supply pressure.
Speaker 2 (10:31):
So I still can't work out that we've had these
headlines around really large numbers of immigrants coming to the country.
Of course it's offset by New Zealander's leaving, but none
of that's a happy statistic. But I'm surprised that it
hasn't translated into a little bit more pressure on the
market in terms of demand. But where are these Do
(10:52):
we know what's happened with the increasing population or they
just squeezing in somewhere.
Speaker 3 (10:57):
Our net migration flow over the last few quarters is
actually negative, as in they're actually now more people leaving
than there are arriving. There was a period of time
about a year ago in the rental market was very,
very prescient at the moment you last time I was here,
we're talking about the fact that rents Chi's starting to soften,
because that rental market is definitely not under the same
(11:20):
pressure it was twelve months ago.
Speaker 2 (11:21):
Okay, I didn't know, maybe time flies because in my
mind it was just I guess it was the figures
for the last year. But yeah, are you saying that
over the last few months, on a monthly basis, we've
been starting to lose people. Correct net Wow, that is
quite a big deal. We want your calls eight hundred
eighty ten eighty. When you look at the fact that
(11:42):
the interest rates had turned a little bit at least,
and it's slightly cheaper to get a mortgage, do you
think that now or thereabouts is the time when you
really need to start looking at buying something. If you
if you're someone who's looking at either getting your first
time or you're an investor, what are your thoughts around
what's where the market's are? Is it actually time to
(12:04):
get your lined up? I'm bit worried about using the
wrong metaphor because Helen's going to give me a hard time,
but anyway, give us a call on eight hundred eighty
ten eighty text nine two nine two. Simple question, Is
now the time to buy? Oh? Eight hundred eighty ten
eighty back in a mine?
Speaker 3 (12:19):
Yes.
Speaker 2 (12:19):
Welcome back to the one roof radio show on the
weekend collective Umpton Beverage. My guest is Helen O'Sullivan. She
is ch chief well, chief executive Office, a CEO of
real estate. The Real estate side of Velocity, which is
a data business which specialized in basically getting all the
good data and information around what's happening in the real
estate market. We're talking about is now the time to
buy now? That may be a crude and obvious question
(12:41):
for things and Waftin, that's the question on I mean,
that's the question in real estate all the time. I
guess for people who are in it is now the
time to sell, hold or buy. But Helen, the I
guess the reason that we're asking this question is because
we have finally seen a turnaround in the in the
reserve banks approach to the cash rate. So people are
thinking all and the anticipation given the way that loans
(13:06):
interest rates are structured, we see that it's there and
trying to encourage you to go for a longer term
deal because interest rate's probably going to keep falling and
everyone's guessing that's going to keep falling. I guess before
we as part of painting the picture. By the way,
if you've got any questions to ask Kellen as well,
she does have a pretty good insight into these things,
because that's why we've got on the show. But the
(13:30):
Reserve Bank have do you think that they've sort of
overshot the mark in terms of and look, it's difficult
to do their job. I'm going to talk about that
in any particular detail, But do you think they've just
pushed things that maybe the economy is just a bit
(13:50):
and so regardless of the change in interest rates, we've
still got a little bit more settling to do before
things can get moving.
Speaker 3 (13:58):
Look, I can't help but feel tim that the things
are a lot more depressed than then the data tells
us in the sense that retarders that I talked to
on PONSONMBI Riota saying it just hasn't been this It's
never been this bad. Hospos really struggling.
Speaker 1 (14:23):
You know.
Speaker 3 (14:25):
The when I look at the number of transaction figures
in the real estate market, that number is incredibly low,
sort of sixteen and a half seventeen thousand transactions. Now
sure that sort of twenty twenty Q four was bonkers,
but those are really low figures, and that is having
(14:45):
such a compounded effect on that future supply of our
housing and we've never actually managed to build enough houses
pretty much since the GFC. It's been a long time
since our housing market was an equilibrium and you know
the longer term effect on that housing, you know, So
we up potentially with the same thing we saw coming
(15:07):
out of the GFC that we stopped building houses, and
then when we suddenly wanted to buy houses again, there
weren't any new ones to buy, and so the prices
start to go through the roof. We're kind of setting
up the same conditions for that again.
Speaker 2 (15:23):
It's interesting because we've got the rhetoric also from people
like Chris Bishop, who has talked about how he wants
to make housing more affordable by building more and more
and more and more houses. So he's determined as someone
who's involved in policy making for the government and the
Actually the data is interesting because you still do sort
of in your instinct, in your own instinctive view of
(15:46):
the market as well. You look at those stories the
restaurant's closing and all that, and even though it's not data,
it's stuff that does make you think, gosh, we really
is that the sort of thing that makes you think
that the data doesn't give us the complete story.
Speaker 3 (16:01):
I think a lot of the official data is very
backwards looking, you know, and it's no it's as much
as a quarter behind, and so it's rare vision mirror
stuff and the stuff that you're sort of seeing and feeling.
We look on a daily basis at data in the
real estate market. We're looking at auction clearance rates. We're
looking at reports from vendors. We're looking at what's listed
(16:25):
on the market at the moment. We're looking at where
the registrations.
Speaker 2 (16:32):
So your data is pretty quick, but economic data is behind.
Speaker 3 (16:36):
Well, the official data is behind.
Speaker 2 (16:38):
There's lots of.
Speaker 3 (16:39):
Different dashboards, you know, and there are lots of different
indicators and omitors and that various banks and commentators, et cetera.
Have built. There's lots of surveys on sentiments and those
are really good indicators as to what you know. That's
your dashboard for what's happening today, whereas you know, the
(17:01):
official data is sort of as much as three months behind,
and it's absolutely it's rock solidly well, hopefully a lot
more accurate as a result of being a lot older.
There's an element of fuzz and stuff that's current, sure,
but I just I just feel like that, you know,
there's we may have stomped on the exit on the
(17:25):
brakes a little too.
Speaker 2 (17:26):
Hard, and how do you think if we have done that,
then what does that actually mean for the property market?
From broadly speaking, I guess difficult to say specifically.
Speaker 3 (17:38):
Broadly speaking, look, I think it means that, you know,
it just might it's it's really like those the volumes
have come way back. It may take a little bit
longer to get confidence back in the market for buyers,
but it does mean that there are some opportunities, some
(18:00):
buying opportunities in the market now.
Speaker 2 (18:03):
I guess if I was listening as a lay person
to you now, you always get a vibe, and the
vibe would be that, Okay, things may turn around at
some stage, but it does feel like you've got a
bit of you've got a bit of time up, you know.
You say, for instance, if I was an investor wanted
to decide I was going to get into investment property,
I'd be feeling like, okay, maybe it's time to go
(18:25):
into a chat with the bank. But I wouldn't be
feeling I'd have to do it in a hurry. That's
probably fair enough.
Speaker 3 (18:31):
Look, if you don't have to do your things in
a hurry, that's always a good way to do your property,
not in a hurry, so that you can do a
good due diligence is actually always the way to transact.
Speaker 2 (18:41):
So that tells me that if you really are interested
in being investor, probably now is the time to start
acting then, isn't it? Because you talk about sentiment as well.
And one of the things that I've always found slightly
irritating is that headlines when it comes to reading about
property are either like, oh, it's awful too, it's a way,
the demand is crazy, there's no sort of like, things
(19:02):
are sort of fifty.
Speaker 3 (19:03):
To fifty, things are trundling along nicely. Doesn't make it
particularly interesting headline perfectly normal day where some buyers went
away happy and some sellers went away happy, and no
blood was s built on the auction room floor and
no records were broken. It is quite a boring headline.
(19:23):
So no one writes those stories.
Speaker 2 (19:26):
What would be the key bit of data you would
expect to see shifting that would indicate things.
Speaker 3 (19:30):
Of starting to move the transaction figures.
Speaker 2 (19:32):
Transactions in terms just the number of.
Speaker 3 (19:34):
Number of number of transaction figures, number of sales concluded.
You know, most of the big real estate agencies put
out their figures on a month. You know a lot
of them put out a monthly, monthly release. There's a
couple of big ones in Auckland that we watch very
closely because they are large players in the Auckland market.
(19:57):
And you start to see their numbers move, then the
rest of the Auckland market will move with them. So
you know, those regular releases from the from the people
who are actually concluded in the transactions.
Speaker 2 (20:07):
What about sentiment surveys, Yeah.
Speaker 3 (20:10):
Tony and Alexander does some really good sentiment surveys which
are also published coincidentally on one roof.
Speaker 2 (20:15):
Yeah, of course that's right. I mean, but how how
how much the pretension do you pay to things like that?
Speaker 4 (20:23):
Oh?
Speaker 3 (20:23):
Quite a lot, quite a lot. Yeah, you might call
it anec data, but it is. Actually it has been
a good indicator over time of sentiment in the market
from real estate agents. And so you know, he's regularly
surveying real estate agents to see how their senses of
the vibe they're getting from buyers, from first time bars,
(20:48):
from investors, from banks. He's surveying the property investors are
with the Crockers to see how they're feeling about getting
into the market getting out of the market. And we've
consistently seen because I am a regular reader consistently seeing
the sentiment indications play out in the data. So I
(21:11):
think it's a good sign.
Speaker 2 (21:12):
And what are the sentiment indications at the moment?
Speaker 3 (21:15):
Sentiment indications And at the moment, they are definitely showing
that turn and sentiment in the real estate sector in
that you know, the buyers are starting to re emerge.
No one's going mad, but the buyers are starting to
re emerge. Just in the last couple of weeks, as
I say, we've seen something. I've seen the options that
I watch regularly from sort of selling one under the
(21:36):
hammer and passing in half of them with no bids,
starting to see a better clearance rate and and a
lot more a lot more activity on the floor, which
is which is I think a positive sign.
Speaker 2 (21:49):
Do you think houses at the moment? Do you think
the market is undervalued at the moment in terms of
the I mean supply and demands. Was just it's a
real time thing.
Speaker 3 (21:56):
Look, I think if you're buying at the moment, you
can potentially get some quite good you can get some bargains.
Speaker 2 (22:02):
What does that mean?
Speaker 3 (22:03):
So it does it's just Oh, it means that you know,
vendors who are prepared to and able to be patient,
are not and are not under pressure, will still hold
out for the prices that thereafter. But if you are
ready to transact, then then you're not under the kind
of competition pressure that you were, you know, even eighteen
(22:26):
months ago. So you know there are opportunities you like.
Speaker 2 (22:30):
So if you like a stress, if you've got the
ability to buy and you're like a stress free environment
where you're not up against every man or woman and
their dog or cat or whatever, bases there probably not about.
Speaker 1 (22:45):
Right.
Speaker 2 (22:45):
Let's take some calls Andrew High.
Speaker 5 (22:47):
Oh great, We've just been studying the packet when I
kids up there in the apartment. Every body of a lot.
But it just seems to me that during the period
of COVID, in the last three or four years, we've
built some some repidas grow and some of these each
team like homes in an apartment, and when you look
at one roof and homes and so forth. With some
(23:09):
of the apps, it's and then some of the sales
that are actually happy, it just seems that some of
them have to come back. The affordability is not there.
They were funny lend when interest rates money we've been
given away and when you look at the affordability now
and the people that are by them, it just doesn't work.
And I think a lot of values and you see
(23:31):
it on all the graph They took a huge left
in that last two or three years, and that was
fine where money was where there is, but the affordability
doesn't work in there. And it seems to be a
lot of sales are not reaching vendor's expectation and they're
coming back, you know, one or two hundred thousand in
some instances. And is it just going to take the
market time to swallow that a little bit that that
(23:52):
is not acceptable anymore of those values that just doesn't work. Yeah,
it just it seems to be a bit of a
flavor that I'm seeing. It's a bit of a trend,
you know, even on the good property you know.
Speaker 3 (24:05):
Yeah, look, it's an interesting one because one of the
key things though about certainly new builds, is that there
is a large proportion of what it costs to build
them is a big factor in the price point, and
they can't ever fall below that point because then the
(24:25):
builders simply stop building them. So they'll always be that
aspect to price it. But certainly, know the levels of
the prices have definitely come back in the last eighteen months,
and we are you know, we saw a turn about
twelve months ago back up and at the moment it
is still I think we're back to being about thirteen
(24:49):
just thirteen thousand dollars ahead of the bottom of last year.
Speaker 2 (24:52):
The sort of question that Andrews reminded me of is
when the interest rates got really cheap, people just piled
in because they thought I can afford this because it's
two percent or three percent. Whereas now as interest rates
drop down, I don't think people suddenly going this is
do people have in mind the fright they might be
in for five years down the track of interest rates
(25:14):
go up.
Speaker 3 (25:15):
Well, that's where the debt to incompliments have been implemented
at quite a sensible time, because that's what they're designed
to avoid. That you pile in and borrow an enormous
amount of money that you can afford when the interest
rate is four percent, but when the interest rate is
seven percent, you are absolutely in over your ears. So
(25:35):
that's why the and the dtiyes have been introduced at
a point in time when the loan to value restrictions
would prevent you from borrowing anything anywhere near where.
Speaker 2 (25:47):
It always frightens. It always frightens me. What the bank
think I can borrow?
Speaker 4 (25:50):
Though?
Speaker 3 (25:51):
Absolutely, just because they say you can doesn't mean you should.
Speaker 2 (25:54):
Do you think do you think that's part of it?
Andrew that we were also thrilled with cheap interest rates,
but now we're like, okay, it's cheap, but let me
just hang on.
Speaker 5 (26:02):
I still in those auction rooms when that was on,
we would properties and other places in a frenzy. Was
the out of control, and you know, people got to
the point that attended six or seven options, tried to
buy and finished, they gave up. They just nodded until
they own it and they're worried about it afterwards.
Speaker 2 (26:16):
So where are you at in the mind.
Speaker 5 (26:18):
Values through the I'm just helping kids and just studying.
But I just think we have to because I believe
when you go back and you look back to the
eighties and our parents suffered and high interstrates, I think
this has been equally as bad when you look at
the value of home to times that people's sellarings, and
I think it's it's scarred people and it will do
(26:39):
for a long time going. They'll treature cash a lot differently.
The people that have gone through this now and have
to you know, have lost some of the bank of
mom and dad and the transition or they're going to
have to the outside and what you know.
Speaker 2 (26:54):
Just so your point is that the damage that's been
done by the you know, the cheap money, then all
of a sudden, the expensive money is actually going to
linger as a negative sentiment for a while.
Speaker 5 (27:03):
Yeah, And I think it put values where they shouldn't
have been. And I think it's going to take Bendos
a while to realize that, hold on, we took this
to this level, but actually it's not where we should
be or where the market can tolerate. And then I
think we're going through a period at the moment of
rerationalizing some of those Yeah.
Speaker 2 (27:20):
Good stuff. Hey, thanks for your corre mate. Actually it's difficult.
That's a difficult sentiment question for Tony. But you know,
how do you view cheap I guess how would you
say about how do you view cheap money now compared
to how you might have viewed it four years ago?
Speaker 3 (27:34):
Yeah, I do think we all got into this bizarre mindset. Well,
there was a sense that money was cheap and money
was going to stay cheap.
Speaker 2 (27:43):
And we're bitten on that.
Speaker 3 (27:45):
Well, you know, this is the first time many people
have actually, ever, ever, actually saw those inflating and sure
interest rates go up. We haven't really experienced rapid inflation
as in the kind that central banks around the world
have been fighting over the last two years for a
long time. So for a lot of us, it was
(28:06):
the first time we'd even experienced reserve central banks hiking
up interest rates at speed in order to pull back
over over inflated economies.
Speaker 2 (28:17):
I think the other thing that maybe what Andrew's pointing
towards as well as that that might just point towards
the sentiment being a little slower to adjusting to mean
any sort of rabid market anytime soon.
Speaker 3 (28:26):
You know, it wouldn't be a bad thing if we
learned a few lessons for industry.
Speaker 2 (28:32):
Oh don't want to that one. Good on you. Hey,
look we want your calls as well. I Waite hundred
eighty ten eighty. You reckons on whether now is a
good time to buy it at least to start thinking
about it, or do you think there's still a little
bit of slackness sort of floating around in the market
right now. I wa eight one hundred eighty ten eighty
is the number twenty one minutes to five News Talk
ZB and welcome back to the Weekend Collective. This is
(28:53):
the one roof radio show. My guest is Helen O'Sullivan
from the Velocity Issues, a CEO of the real estate
side of that business. Actually we were just having a
chat in the break Helen, I was trying to think
of a way of mentioning this particular phenomenon. But I think,
in a nutshell, I think what we were trying to
get at with Andrew was that people's attitude to debt
(29:14):
might have changed because there was a time where it
might have been in the eighties, I think even a
few years ago, where people go, I can borrow for
two percent. I've just gone and got myself a new
ut and to toe, a new boat. And people just
bought things because money was cheap, because they treated their
mortgage payments like it was rent, Like I'm a rent
(29:35):
got cheaper so I can do ex but it's like
you do have to pay that back.
Speaker 3 (29:40):
Yeah. I remember and commentators talking about the people feel
richer because their house is worth more, so they go
out and borrow more money and buy a big screen TV.
It's like, I just don't understand how that mets works
because you still want to pay for it, you still
pay it back.
Speaker 2 (29:53):
I would worry richer, That's the thing. I've never done that,
and I would worry that if I did, I'd get
addicted to it. Because you go and buy a new
car because money is cheap. You hop in that new car.
It feels pretty good good, And I don't know that anyway.
Speaker 3 (30:10):
Like hows almost as much as I like houses.
Speaker 2 (30:13):
Actually, you were more of an apartment gal or it's
housecale always.
Speaker 3 (30:18):
I'll never go back to living in houses like I
like apartment living too much.
Speaker 2 (30:22):
Yeah, do you think apartments the right apartments are good
investments these days?
Speaker 3 (30:27):
I think so, And they're great places to live as well.
Speaker 2 (30:29):
Where we've had this conversation, and that's the point. When
are you inviting around for a cup of tea or
something so I can see your flash.
Speaker 3 (30:36):
Apartment anytime you'd like to name the day you.
Speaker 2 (30:39):
Mentioned it on air? You can't say what about this
text from being hide do z B. This is the
time to buy a house. Next year when interest rates drop,
your house will jump fifteen percent in value. I don't
think given what we've been talking about, that's quite the scenario,
is it.
Speaker 3 (30:56):
Maybe not quite the fifteen percent, But I think the
point that we were talking about earlier, as the interest
rates come down, what you can afford to borrow increases,
and if you find yourself in a scrap, well we
find ourselves in a situation where we are under supplied
relative to demand, then that is what will happen to prices.
Speaker 2 (31:14):
Okay, Steve says, I don't see I just don't see
good growth without good immigration numbers. That's always been the
case in New Zealand. Y.
Speaker 3 (31:24):
It's possible We've got to get away from the candy
I suppose of always always feeding GDP growth of immigration.
Speaker 2 (31:35):
It was John Keithing, wasn't it.
Speaker 3 (31:36):
We certainly happened during those years did mask the fact
that we that that GDP growth per capita, and we
love talking about per capita in New Zealand, it's it's
our national sport. But our GDP growth per capita was
not was not strong, So we were getting kind of
you know, it was it was kind of fake growth,
(31:59):
and we were not building the infrastructure and the houses
and the schools and the housing and all all the
pipes in the ground that we need to go with it.
Speaker 2 (32:07):
You've touched on that, You've touched on a few little
sensitive moments. If anyone in central government right now, isn't
it What did you say, we haven't built the houses,
the schools, the hospitals, or the pipes in the grounds.
Pretty much sums up were not got it that long.
Speaker 3 (32:22):
Term infrastructure planning. I went to Norway last year and
it made me almost ill to see their beautiful long
term infrastructure and like twenty five year plans that they
they just keep building stuff. Kind of governments come, governments go,
the infrastructure just plows on. Now. Sure the multi trillion
dollar Sovereign Investment Fund with all of that.
Speaker 2 (32:45):
They do, they still dredge up a fair bit of
oil and sell it to the Norwegians, don't they.
Speaker 3 (32:49):
But they have invested it well in long term infrastructure.
Speaker 2 (32:53):
Yeah. I wonder if that has anything to do with
in certain season you never see the sun for a
week or two or three or four, the old mid night.
Speaker 3 (33:01):
The twenty four hour darkness that's the year.
Speaker 5 (33:04):
Yeah.
Speaker 2 (33:04):
Yeah, you want to make sure you had good infrastructure
for those colts.
Speaker 3 (33:07):
You do want to make sure that the power supply
is good when it's minus thirty two degrees outside.
Speaker 2 (33:14):
That's the one. That's the one. That's what I said for.
Larry says, can you please ask Helen for an update
on the deductibility of mortgage interest on a privately owned
residential property? Thank you. Timing wise, I can't. I know
it's all turning around, but I can't remember. We all
got time.
Speaker 3 (33:30):
I believe it's yes, I'm talking without having research having
the number at the top of my I think we're
back to eighty percent this year and one hundred percent
next year is being deductible, So the deductibility is being
phased back in.
Speaker 2 (33:46):
That's right and hopefully right.
Speaker 3 (33:48):
That was not text advice.
Speaker 2 (33:50):
No, no specific financial advice given on this show, although
we do like to just, you know, have a good
chat about the old Generally, I'd like.
Speaker 3 (33:57):
To have a few reckons.
Speaker 2 (33:59):
That's the word. You've nailed it exactly. We're going to
come back in the moment. The one property of the
week is up just after this break, and I tell
you it is an absolute classic. We're going to give
you the address. You will be able to go and
check it out on the one roof, so Helen's all
over it. She's nail. It's a cracker. There we go
the preview of that one. Well done to my producer Tira.
(34:20):
We'll be back in just to tick. It's twelve minutes
to five newstalks'd b Yes, welcome back to Well this
is the one Roof radio show. My guests Helen O.
Sullivan from Velocity. It is that magic time of day.
That's eight minutes to five.
Speaker 1 (34:35):
The one roof property of the Week on the Weekend Collective.
Speaker 2 (34:40):
Now, if you do get the chance to google this
our one roof property of the week, well not google it,
go to the one Roof, one roof dot curt it
in z it is. The address is two hundred and
forty four Ken would drive Matarrangi, Thames, Corimandel and it
is a three bedroom, two bathroom, two car garage garage garage.
I don't know this holiday home. It's a time capsule. Seriously,
(35:01):
they've even got a photo I think from nineteen seventy
six is the cover photo for it. An old in fact,
it must be because it shows he's got no neighbors.
It basically hasn't changed much esthetically, it's got retro warpaper,
green porcelain, bath and basin, a big backyard just like
the old day's huge backyard. Actually has had some upgrades
(35:22):
for modern day luxury, under floor insulation, gas, hot water,
and other hidden luxuries. As I say head because you
wouldn't have to look at it. It really looks like
it's straight out of nineteen seventy six order. But it's
been in the family for nearly fifty years, and clearly
they've had some wonderful memories. I think my producer Tira
is sure. She's absolutely positive, which means she thinks maybe
(35:43):
she stayed there as an airbnb. So anyway, Helen, it's
got an estimate an RV. I think the estimate price
is two point six eight million. I've got some quite
flashed neighbors. But the house itself is I mean, the
wallpaper in the shower alone, goodness may.
Speaker 3 (36:03):
The time caps you'll description is a good one in
the nineteen seventies for a pretty special time. As far
as internal decore.
Speaker 2 (36:13):
What sort of flaw is that it's a sort of
quirky sort of lineo. It's people will will recognize what
it does. It does look like it's it's ideal.
Speaker 3 (36:22):
For a batch though, right because the other the thing
that we haven't mentioned is its absolute beachfront. It is
this is like Keen would drive is the dress circle Matangi.
That beach is wild and when swept and magnificent, and
it is perched right on the beachfront. You go off,
you go out the front and into the.
Speaker 2 (36:44):
Surf and the shower stainless steel shower at the bottom.
Speaker 3 (36:48):
It's it's are you going to be tracking a lot
of sand and.
Speaker 2 (36:51):
There's a shower. You can tell there's a second shower
next to the garage when you because.
Speaker 3 (36:54):
You're going to de sand before you go inside.
Speaker 2 (36:57):
Excellent? Did you if you go on to have a
look at it the neighbors, it looks like the house
next to it, this may be, you know, estimate two
point six eight. The next door neighbors looks like about
fifteen million.
Speaker 3 (37:10):
There are some absolutely unbelievable homes down there. It is
quite it's quite something to just walk down along the beach.
It's hard to know whether you want to look out
to see and see that or look to the left
and see the holls I reckon.
Speaker 2 (37:21):
You know, the property is like this, there's I think
there's almost a sort of smugness. It's like you can
look at your neighbors who've got this amazing architectural marvel,
and you're there in your sort of ninety seventies batch,
and you're pretty much just giving people the finger, going
look at me. I'm on the beach and I'm in
(37:42):
my batch, and I bet you wish you were here.
Speaker 3 (37:45):
It's an interesting way of characterizing it, Tim, you may
be projecting.
Speaker 2 (37:49):
There a little bit, I think possibly, To be honest,
I guess if you offered me the fifteen million dollar
bunker next to it, I'd probably be quite happy there
as well. Anyway, you can go and check it out
on the one roof dot one roof, dot co dotdian Z.
It's two forty four ken I matter, Rangy, Tims, Crimandle.
I would be surprised if that estimate of two point
six eight million wasn't slightly exceeded by someone.
Speaker 3 (38:12):
Look chem would drive is incredibly tightly held. These beachfront
properties do not come to market very often, and the
most recent sale was for a much newer house, but
was over the threes. So you may well be right.
Speaker 2 (38:28):
I didn't see ho are they going to auction or
it must be auction, surely, isn't it. Oh I no
sold by deadline sale by the thirty first of October
twenty twenty four, unless sold prior. Oh I'll better get
them with my low ball offer right now.
Speaker 3 (38:39):
It gives you time to beat your paperwork in auder time.
Speaker 2 (38:41):
Now is the time to buy, and that's the one.
Speaker 3 (38:43):
Now is definitely How many million are we up to tonight.
Speaker 2 (38:48):
On the powerball? Enough?
Speaker 3 (38:50):
Enough?
Speaker 2 (38:50):
About ten?
Speaker 3 (38:52):
They would be enough.
Speaker 2 (38:53):
Hey, Helen, thanks so much for coming and always a pleasure.
Speaker 3 (38:56):
Tim thanks for having me.
Speaker 2 (38:57):
Yeah, you're welcome and we'll be back in just a
moment with the parents squad. Google Sutherland joins us. This
is News Talk z B three and a half minutes
to five.
Speaker 1 (39:07):
For more from the weekend collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:09):
Be and welcome back to the Weekend Collective. This is
the one Roof Radio show. We want your calls on
O eight one hundred and eighty ten eighty text on
nine two nine two. By the way, if you've missed
any of our hours, I always like to say this
at this time, especially given that we've just had another
rollicking panel with Simon Wilson and new guest Paul Spain.
You can go and check out the Weekend Collective podcast
(00:30):
and it'll all be there for you. Go to iHeartRadio
just look for the Weekend Collective. But as I say,
right now, it is time for the one Routhfradio show.
My guest is she is CEO of Actually, funnily enough,
in my notes that just says CEO of real estate
full stop, which makes you sound like you're just in
charge of the whole industry. But it's actually CEO of
CEO of real estate for Velocity.
Speaker 3 (00:51):
Correct. Yes, I don't mind. I can Queen of the
world kind of title.
Speaker 2 (00:56):
It is, I look at it. See Hello, No Sullivan,
So I didn't give everyone your name, but people have
listened will know who you are. And if they don't,
they can just google who is the CEO of real estate?
I mean worldwide global. It's like, you know, real estate,
that's me, that's me. So actually tell us a little
bit about it, tell us a little bit about your role,
(01:16):
Helen and you.
Speaker 3 (01:18):
Okay, So look, I've been kicking around the property industry
for way too long really in various guys is and
just just you know, keep coming back to it because
you know, it's where home begins really and that's what's
what I love about it. But Velocity is the business
I'm working with, and we are a data company that
focuses on property. We are the data partner for One Roof,
(01:40):
who are of course a magnificent real estate website.
Speaker 2 (01:43):
Yes, and this is the One Roof radio.
Speaker 3 (01:46):
Radio show, so effector here I am.
Speaker 2 (01:48):
Actually One Roof is also doing very I think we
had a bit of a there was a I think
run One Roof is doing very well as as just
an initiative amens in me as well, isn't it?
Speaker 3 (01:56):
It is, as I understand it, doing extremely well.
Speaker 2 (01:59):
I think the expression is rocking and rolling, rocking.
Speaker 3 (02:01):
And rolling because it's got a great data partner behind it.
Speaker 2 (02:04):
Yes, and of course you know, and be given that
we have one ref radio show, I think their success
is down to you and me.
Speaker 3 (02:09):
I would say so to more you than me.
Speaker 2 (02:13):
Anyway. Actually, what were your first forays into real estate?
Speaker 3 (02:18):
I first was worked with Crocker's Property Group and they're
a property management body, corporate company in Auckland with a
great presence. And from there was the CEO of the
Real Estate Institute for a number of years, which is
where I first met the Velocity team. And then I
was CEO of Ockham Residential, who are progressive Auckland property developer.
Speaker 2 (02:40):
Yeah. Yeah, and actually, and you are quite a fan
of this. I think you might even even a potential
that you might even live in one of their properties.
Speaker 3 (02:48):
I may have lived in three of their properties.
Speaker 2 (02:50):
Really just not at the same time.
Speaker 3 (02:53):
When I drink the kool aid, I drink it proper.
Speaker 2 (02:57):
It almost sounds like you still like you have three
that you like. Today, I think we'll just go back
to the one, you know, one.
Speaker 3 (03:03):
Quite because they're all within a lead two and a
half kilometers of each other, so they really would be silly.
Speaker 2 (03:08):
Hey, So look what we want to talk about today
is the question about when and for people to get
into property or if they're thinking about making decision, because
a lot of the time people sit on the fringes
and they think, oh, look, I really need to get
my ducks lined up. Maybe I need to sort out
some finance so I can actually get moving. But so
we're going to talk about the simple question is is
(03:30):
now the time to buy? But there have been some
predictions from I've seen predictions both ways, from economists predicting
that house rises will continue to fall, whether it's plausible
with the interest rate cuts. I've seen some predictions that
I mean not a lot, but that maybe there's still
going to be a bit of a sag in the market.
Might be the way of summing things up. What's your
(03:50):
take on where things are at? I mean, no one's
going to get every prediction right, and predictions a sort
of good way to what do they say, Trying to
make a prediction is a good way to hear God laughing.
But what's your take on where things are at with
the market? Because while interest rates, you know, I have
turned the banks were sort of ahead of that. Anyway,
how much more is it going to fall? But of course,
(04:12):
when money does get cheaper all of a sudden, there
is a real energy of people thinking now's the time.
What's your take on it?
Speaker 3 (04:18):
So, I mean the key thing about interest rates starting
to fall is that that really changes affordability base. You know,
if you can, say on one thousand dollars a week,
as the interest rates starts to come down, what you
can potentially borrow with that money, it starts to increase
and brings properties that much closer to being able to
(04:39):
be affordable. So that coupled with the fact that the
track is now downwards as opposed to upwards, so you
have some confidence that that affordability will continue. And in fact,
if you buy now in a year's time, the interest
rates will be lower, as opposed to buy now in
a year's time, you might have to find more to
cover your interest bill. So it does look to me
(05:02):
that the factors are starting to line up for or
a turn in the market. Just in the last just
since the interest change from the Reserve Bank came through,
I'm starting to see clearance rates that auctions start to improve.
And in addition to more of the properties being passed
in with bids having been made as opposed to being
(05:25):
passed in with no bids.
Speaker 2 (05:26):
So the data is telling a story that something.
Speaker 3 (05:29):
So the data is telling us that the transaction figures
might start to move again, because there's sort of there's
always three. To me, there's three key metrics in the
housing market. One is price, and that's the obvious one
that people talk about, But the other two that are
I think even just as important other days on market.
But the biggest one to me is the volumes, the
(05:50):
number of transactions. And at the moment, the transaction figures
are incredibly low compared to where we've seen them in
the past.
Speaker 2 (05:58):
And what's an example of a number of what we
might have seen when things are going gag busters versus
where we're at now. So back when so I can
see you swiping on your touchscreen. You are in Velocity from.
Speaker 3 (06:15):
Velocity and we are a data company and.
Speaker 2 (06:18):
Data which probably makes you feel under a bit of
pressure when you come because you can't just sort of go, well,
let's say roughly this.
Speaker 3 (06:24):
Yeah, I sort of have to say roughly something roughly
exactly this. When I get back to the office on Monday,
I'll get I'll get pitchfork shut sure thrown at me.
Speaker 2 (06:33):
Fantastic, So look.
Speaker 3 (06:34):
Back in a quarter four of twenty twenty, they're around
about thirty seven thousand settled sales, and in the latest
corner quarter there's been about sixteen and a half thousand
settled wow.
Speaker 2 (06:45):
Lesson.
Speaker 3 (06:45):
So that's the kind of style we're talking about.
Speaker 2 (06:48):
Is that as far as being saggy, I'm trying to say, Tim.
Speaker 4 (06:58):
Sorry, that's as far as as far as the market
being saggy, Let's find another word for that.
Speaker 2 (07:14):
God, you unsttle me with that one. Anyway, what's what's
another word for it? It's actually fair enough? Is that
a fair enough word for the market.
Speaker 3 (07:23):
Look, it's subdued, I think is probably the term we
analysts would like to.
Speaker 2 (07:28):
Use, Tim, What that got me? Okay? So it's subdued
as far as as a subdued market goes? How how
how subdued is it? Is it?
Speaker 3 (07:43):
Look? Those are those are pretty low transaction figures, you know?
That is that is about as subdued as she gets.
Speaker 2 (07:52):
Okay, So that would okay? And so in terms of where,
because let's I've got to remind myself of the question
we've got is now the time to buy if you are,
and especially for people who are thinking about investing because
there are a lot of people have been calling their
heels on the investment, and so they will be to me,
I was summat as now is the time to think
about it. But I'm not an active participant in that's
(08:15):
in that sense.
Speaker 3 (08:16):
No, Look, so what I what we tend to see
in this in the turning of the cycles. The cycle
turns and then things start to move away. We've there's
been a real contraction of supply. And the thing you
have to remember about supply is that supply takes a
really has a really long pipeline. It takes a long
(08:37):
time for it to turn on. And whereas demand turns
back on over a couple of weeks, the interest rates
come off. We start to see an increasing track of affordability.
People start to get back into the market and think
that you know, if they're ready, there's you know, there's
maybe some some showers have been on the market for
a while who are motivated. It is a good time
(09:00):
if you are poised and ready to act, to start
to act before others start joining you. That is when
you will start to see the prices much.
Speaker 2 (09:07):
I thought that it was quite a bit of supply.
Am I mistaken on that? This is it because of
the balance between supply and demand and confusing.
Speaker 3 (09:16):
I'm talking about two things. I suppose when I talk
about supply, I mean supply of new stock. So consent
figures the number of houses consented has dropped significantly over
the past four quarters, which means that in a year's time,
in two years time, those new houses will not be
coming to market. Because the house gets consented, that doesn't
necessarily means it gets started, and it doesn't necessarily means
(09:38):
to get built. Developers are really feeling the pressure in
terms of sales off the plans, and when they stop
selling properties off the houses off the plans, they will
stop because they don't build those they don't start those
developments that don't build those developments still have got those sales.
Speaker 2 (09:56):
Intuitively, that does tell me that when demand does cac
in that there may be a bit of a reasonably
chunky amount of growth, but potential there because you're not
getting the new stock coming on to sort of ameliorate
or to match.
Speaker 3 (10:11):
The band, and you don't have matching supply. And the
matching supply is all of existing houses who you know,
in most of those houses have that occupant, so you
know in the absence of significant immigration, which although to
be fair we do have a bit of that going
on as well, you start to get supply pressure.
Speaker 2 (10:31):
So I still can't work out that we've had these
headlines around really large numbers of immigrants coming to the country.
Of course it's offset by New Zealander's leaving, but none
of that's a happy statistic. But I'm surprised that it
hasn't translated into a little bit more pressure on the
market in terms of demand. But where are these Do
(10:52):
we know what's happened with the increasing population or they
just squeezing in somewhere.
Speaker 3 (10:57):
Our net migration flow over the last few quarters is
actually negative, as in they're actually now more people leaving
than there are arriving. There was a period of time
about a year ago in the rental market was very,
very prescient at the moment you last time I was here,
we're talking about the fact that rents Chi's starting to soften,
because that rental market is definitely not under the same
(11:20):
pressure it was twelve months ago.
Speaker 2 (11:21):
Okay, I didn't know, maybe time flies because in my
mind it was just I guess it was the figures
for the last year. But yeah, are you saying that
over the last few months, on a monthly basis, we've
been starting to lose people. Correct net Wow, that is
quite a big deal. We want your calls eight hundred
eighty ten eighty. When you look at the fact that
(11:42):
the interest rates had turned a little bit at least,
and it's slightly cheaper to get a mortgage, do you
think that now or thereabouts is the time when you
really need to start looking at buying something. If you
if you're someone who's looking at either getting your first
time or you're an investor, what are your thoughts around
what's where the market's are? Is it actually time to
(12:04):
get your lined up? I'm bit worried about using the
wrong metaphor because Helen's going to give me a hard time,
but anyway, give us a call on eight hundred eighty
ten eighty text nine two nine two. Simple question, Is
now the time to buy? Oh? Eight hundred eighty ten
eighty back in a mine?
Speaker 3 (12:19):
Yes.
Speaker 2 (12:19):
Welcome back to the one roof radio show on the
weekend collective Umpton Beverage. My guest is Helen O'Sullivan. She
is ch chief well, chief executive Office, a CEO of
real estate. The Real estate side of Velocity, which is
a data business which specialized in basically getting all the
good data and information around what's happening in the real
estate market. We're talking about is now the time to
buy now? That may be a crude and obvious question
(12:41):
for things and Waftin, that's the question on I mean,
that's the question in real estate all the time. I
guess for people who are in it is now the
time to sell, hold or buy. But Helen, the I
guess the reason that we're asking this question is because
we have finally seen a turnaround in the in the
reserve banks approach to the cash rate. So people are
thinking all and the anticipation given the way that loans
(13:06):
interest rates are structured, we see that it's there and
trying to encourage you to go for a longer term
deal because interest rate's probably going to keep falling and
everyone's guessing that's going to keep falling. I guess before
we as part of painting the picture. By the way,
if you've got any questions to ask Kellen as well,
she does have a pretty good insight into these things,
because that's why we've got on the show. But the
(13:30):
Reserve Bank have do you think that they've sort of
overshot the mark in terms of and look, it's difficult
to do their job. I'm going to talk about that
in any particular detail, But do you think they've just
pushed things that maybe the economy is just a bit
(13:50):
and so regardless of the change in interest rates, we've
still got a little bit more settling to do before
things can get moving.
Speaker 3 (13:58):
Look, I can't help but feel tim that the things
are a lot more depressed than then the data tells
us in the sense that retarders that I talked to
on PONSONMBI Riota saying it just hasn't been this It's
never been this bad. Hospos really struggling.
Speaker 1 (14:23):
You know.
Speaker 3 (14:25):
The when I look at the number of transaction figures
in the real estate market, that number is incredibly low,
sort of sixteen and a half seventeen thousand transactions. Now
sure that sort of twenty twenty Q four was bonkers,
but those are really low figures, and that is having
(14:45):
such a compounded effect on that future supply of our
housing and we've never actually managed to build enough houses
pretty much since the GFC. It's been a long time
since our housing market was an equilibrium and you know
the longer term effect on that housing, you know, So
we up potentially with the same thing we saw coming
(15:07):
out of the GFC that we stopped building houses, and
then when we suddenly wanted to buy houses again, there
weren't any new ones to buy, and so the prices
start to go through the roof. We're kind of setting
up the same conditions for that again.
Speaker 2 (15:23):
It's interesting because we've got the rhetoric also from people
like Chris Bishop, who has talked about how he wants
to make housing more affordable by building more and more
and more and more houses. So he's determined as someone
who's involved in policy making for the government and the
Actually the data is interesting because you still do sort
of in your instinct, in your own instinctive view of
(15:46):
the market as well. You look at those stories the
restaurant's closing and all that, and even though it's not data,
it's stuff that does make you think, gosh, we really
is that the sort of thing that makes you think
that the data doesn't give us the complete story.
Speaker 3 (16:01):
I think a lot of the official data is very
backwards looking, you know, and it's no it's as much
as a quarter behind, and so it's rare vision mirror
stuff and the stuff that you're sort of seeing and feeling.
We look on a daily basis at data in the
real estate market. We're looking at auction clearance rates. We're
looking at reports from vendors. We're looking at what's listed
(16:25):
on the market at the moment. We're looking at where
the registrations.
Speaker 2 (16:32):
So your data is pretty quick, but economic data is behind.
Speaker 3 (16:36):
Well, the official data is behind.
Speaker 2 (16:38):
There's lots of.
Speaker 3 (16:39):
Different dashboards, you know, and there are lots of different
indicators and omitors and that various banks and commentators, et cetera.
Have built. There's lots of surveys on sentiments and those
are really good indicators as to what you know. That's
your dashboard for what's happening today, whereas you know, the
(17:01):
official data is sort of as much as three months behind,
and it's absolutely it's rock solidly well, hopefully a lot
more accurate as a result of being a lot older.
There's an element of fuzz and stuff that's current, sure,
but I just I just feel like that, you know,
there's we may have stomped on the exit on the
(17:25):
brakes a little too.
Speaker 2 (17:26):
Hard, and how do you think if we have done that,
then what does that actually mean for the property market?
From broadly speaking, I guess difficult to say specifically.
Speaker 3 (17:38):
Broadly speaking, look, I think it means that, you know,
it just might it's it's really like those the volumes
have come way back. It may take a little bit
longer to get confidence back in the market for buyers,
but it does mean that there are some opportunities, some
(18:00):
buying opportunities in the market now.
Speaker 2 (18:03):
I guess if I was listening as a lay person
to you now, you always get a vibe, and the
vibe would be that, Okay, things may turn around at
some stage, but it does feel like you've got a
bit of you've got a bit of time up, you know.
You say, for instance, if I was an investor wanted
to decide I was going to get into investment property,
I'd be feeling like, okay, maybe it's time to go
(18:25):
into a chat with the bank. But I wouldn't be
feeling I'd have to do it in a hurry. That's
probably fair enough.
Speaker 3 (18:31):
Look, if you don't have to do your things in
a hurry, that's always a good way to do your property,
not in a hurry, so that you can do a
good due diligence is actually always the way to transact.
Speaker 2 (18:41):
So that tells me that if you really are interested
in being investor, probably now is the time to start
acting then, isn't it? Because you talk about sentiment as well.
And one of the things that I've always found slightly
irritating is that headlines when it comes to reading about
property are either like, oh, it's awful too, it's a way,
the demand is crazy, there's no sort of like, things
(19:02):
are sort of fifty.
Speaker 3 (19:03):
To fifty, things are trundling along nicely. Doesn't make it
particularly interesting headline perfectly normal day where some buyers went
away happy and some sellers went away happy, and no
blood was s built on the auction room floor and
no records were broken. It is quite a boring headline.
(19:23):
So no one writes those stories.
Speaker 2 (19:26):
What would be the key bit of data you would
expect to see shifting that would indicate things.
Speaker 3 (19:30):
Of starting to move the transaction figures.
Speaker 2 (19:32):
Transactions in terms just the number of.
Speaker 3 (19:34):
Number of number of transaction figures, number of sales concluded.
You know, most of the big real estate agencies put
out their figures on a month. You know a lot
of them put out a monthly, monthly release. There's a
couple of big ones in Auckland that we watch very
closely because they are large players in the Auckland market.
(19:57):
And you start to see their numbers move, then the
rest of the Auckland market will move with them. So
you know, those regular releases from the from the people
who are actually concluded in the transactions.
Speaker 2 (20:07):
What about sentiment surveys, Yeah.
Speaker 3 (20:10):
Tony and Alexander does some really good sentiment surveys which
are also published coincidentally on one roof.
Speaker 2 (20:15):
Yeah, of course that's right. I mean, but how how
how much the pretension do you pay to things like that?
Speaker 4 (20:23):
Oh?
Speaker 3 (20:23):
Quite a lot, quite a lot. Yeah, you might call
it anec data, but it is. Actually it has been
a good indicator over time of sentiment in the market
from real estate agents. And so you know, he's regularly
surveying real estate agents to see how their senses of
the vibe they're getting from buyers, from first time bars,
(20:48):
from investors, from banks. He's surveying the property investors are
with the Crockers to see how they're feeling about getting
into the market getting out of the market. And we've
consistently seen because I am a regular reader consistently seeing
the sentiment indications play out in the data. So I
(21:11):
think it's a good sign.
Speaker 2 (21:12):
And what are the sentiment indications at the moment?
Speaker 3 (21:15):
Sentiment indications And at the moment, they are definitely showing
that turn and sentiment in the real estate sector in
that you know, the buyers are starting to re emerge.
No one's going mad, but the buyers are starting to
re emerge. Just in the last couple of weeks, as
I say, we've seen something. I've seen the options that
I watch regularly from sort of selling one under the
(21:36):
hammer and passing in half of them with no bids,
starting to see a better clearance rate and and a
lot more a lot more activity on the floor, which
is which is I think a positive sign.
Speaker 2 (21:49):
Do you think houses at the moment? Do you think
the market is undervalued at the moment in terms of
the I mean supply and demands. Was just it's a
real time thing.
Speaker 3 (21:56):
Look, I think if you're buying at the moment, you
can potentially get some quite good you can get some bargains.
Speaker 2 (22:02):
What does that mean?
Speaker 3 (22:03):
So it does it's just Oh, it means that you know,
vendors who are prepared to and able to be patient,
are not and are not under pressure, will still hold
out for the prices that thereafter. But if you are
ready to transact, then then you're not under the kind
of competition pressure that you were, you know, even eighteen
(22:26):
months ago. So you know there are opportunities you like.
Speaker 2 (22:30):
So if you like a stress, if you've got the
ability to buy and you're like a stress free environment
where you're not up against every man or woman and
their dog or cat or whatever, bases there probably not about.
Speaker 1 (22:45):
Right.
Speaker 2 (22:45):
Let's take some calls Andrew High.
Speaker 5 (22:47):
Oh great, We've just been studying the packet when I
kids up there in the apartment. Every body of a lot.
But it just seems to me that during the period
of COVID, in the last three or four years, we've
built some some repidas grow and some of these each
team like homes in an apartment, and when you look
at one roof and homes and so forth. With some
(23:09):
of the apps, it's and then some of the sales
that are actually happy, it just seems that some of
them have to come back. The affordability is not there.
They were funny lend when interest rates money we've been
given away and when you look at the affordability now
and the people that are by them, it just doesn't work.
And I think a lot of values and you see
(23:31):
it on all the graph They took a huge left
in that last two or three years, and that was
fine where money was where there is, but the affordability
doesn't work in there. And it seems to be a
lot of sales are not reaching vendor's expectation and they're
coming back, you know, one or two hundred thousand in
some instances. And is it just going to take the
market time to swallow that a little bit that that
(23:52):
is not acceptable anymore of those values that just doesn't work. Yeah,
it just it seems to be a bit of a
flavor that I'm seeing. It's a bit of a trend,
you know, even on the good property you know.
Speaker 3 (24:05):
Yeah, look, it's an interesting one because one of the
key things though about certainly new builds, is that there
is a large proportion of what it costs to build
them is a big factor in the price point, and
they can't ever fall below that point because then the
(24:25):
builders simply stop building them. So they'll always be that
aspect to price it. But certainly, know the levels of
the prices have definitely come back in the last eighteen months,
and we are you know, we saw a turn about
twelve months ago back up and at the moment it
is still I think we're back to being about thirteen
(24:49):
just thirteen thousand dollars ahead of the bottom of last year.
Speaker 2 (24:52):
The sort of question that Andrews reminded me of is
when the interest rates got really cheap, people just piled
in because they thought I can afford this because it's
two percent or three percent. Whereas now as interest rates
drop down, I don't think people suddenly going this is
do people have in mind the fright they might be
in for five years down the track of interest rates
(25:14):
go up.
Speaker 3 (25:15):
Well, that's where the debt to incompliments have been implemented
at quite a sensible time, because that's what they're designed
to avoid. That you pile in and borrow an enormous
amount of money that you can afford when the interest
rate is four percent, but when the interest rate is
seven percent, you are absolutely in over your ears. So
(25:35):
that's why the and the dtiyes have been introduced at
a point in time when the loan to value restrictions
would prevent you from borrowing anything anywhere near where.
Speaker 2 (25:47):
It always frightens. It always frightens me. What the bank
think I can borrow?
Speaker 4 (25:50):
Though?
Speaker 3 (25:51):
Absolutely, just because they say you can doesn't mean you should.
Speaker 2 (25:54):
Do you think do you think that's part of it?
Andrew that we were also thrilled with cheap interest rates,
but now we're like, okay, it's cheap, but let me
just hang on.
Speaker 5 (26:02):
I still in those auction rooms when that was on,
we would properties and other places in a frenzy. Was
the out of control, and you know, people got to
the point that attended six or seven options, tried to
buy and finished, they gave up. They just nodded until
they own it and they're worried about it afterwards.
Speaker 2 (26:16):
So where are you at in the mind.
Speaker 5 (26:18):
Values through the I'm just helping kids and just studying.
But I just think we have to because I believe
when you go back and you look back to the
eighties and our parents suffered and high interstrates, I think
this has been equally as bad when you look at
the value of home to times that people's sellarings, and
I think it's it's scarred people and it will do
(26:39):
for a long time going. They'll treature cash a lot differently.
The people that have gone through this now and have
to you know, have lost some of the bank of
mom and dad and the transition or they're going to
have to the outside and what you know.
Speaker 2 (26:54):
Just so your point is that the damage that's been
done by the you know, the cheap money, then all
of a sudden, the expensive money is actually going to
linger as a negative sentiment for a while.
Speaker 5 (27:03):
Yeah, And I think it put values where they shouldn't
have been. And I think it's going to take Bendos
a while to realize that, hold on, we took this
to this level, but actually it's not where we should
be or where the market can tolerate. And then I
think we're going through a period at the moment of
rerationalizing some of those Yeah.
Speaker 2 (27:20):
Good stuff. Hey, thanks for your corre mate. Actually it's difficult.
That's a difficult sentiment question for Tony. But you know,
how do you view cheap I guess how would you
say about how do you view cheap money now compared
to how you might have viewed it four years ago?
Speaker 3 (27:34):
Yeah, I do think we all got into this bizarre mindset. Well,
there was a sense that money was cheap and money
was going to stay cheap.
Speaker 2 (27:43):
And we're bitten on that.
Speaker 3 (27:45):
Well, you know, this is the first time many people
have actually, ever, ever, actually saw those inflating and sure
interest rates go up. We haven't really experienced rapid inflation
as in the kind that central banks around the world
have been fighting over the last two years for a
long time. So for a lot of us, it was
(28:06):
the first time we'd even experienced reserve central banks hiking
up interest rates at speed in order to pull back
over over inflated economies.
Speaker 2 (28:17):
I think the other thing that maybe what Andrew's pointing
towards as well as that that might just point towards
the sentiment being a little slower to adjusting to mean
any sort of rabid market anytime soon.
Speaker 3 (28:26):
You know, it wouldn't be a bad thing if we
learned a few lessons for industry.
Speaker 2 (28:32):
Oh don't want to that one. Good on you. Hey,
look we want your calls as well. I Waite hundred
eighty ten eighty. You reckons on whether now is a
good time to buy it at least to start thinking
about it, or do you think there's still a little
bit of slackness sort of floating around in the market
right now. I wa eight one hundred eighty ten eighty
is the number twenty one minutes to five News Talk
ZB and welcome back to the Weekend Collective. This is
(28:53):
the one roof radio show. My guest is Helen O'Sullivan
from the Velocity Issues, a CEO of the real estate
side of that business. Actually we were just having a
chat in the break Helen, I was trying to think
of a way of mentioning this particular phenomenon. But I think,
in a nutshell, I think what we were trying to
get at with Andrew was that people's attitude to debt
(29:14):
might have changed because there was a time where it
might have been in the eighties, I think even a
few years ago, where people go, I can borrow for
two percent. I've just gone and got myself a new
ut and to toe, a new boat. And people just
bought things because money was cheap, because they treated their
mortgage payments like it was rent, Like I'm a rent
(29:35):
got cheaper so I can do ex but it's like
you do have to pay that back.
Speaker 3 (29:40):
Yeah. I remember and commentators talking about the people feel
richer because their house is worth more, so they go
out and borrow more money and buy a big screen TV.
It's like, I just don't understand how that mets works
because you still want to pay for it, you still
pay it back.
Speaker 2 (29:53):
I would worry richer, That's the thing. I've never done that,
and I would worry that if I did, I'd get
addicted to it. Because you go and buy a new
car because money is cheap. You hop in that new car.
It feels pretty good good, And I don't know that anyway.
Speaker 3 (30:10):
Like hows almost as much as I like houses.
Speaker 2 (30:13):
Actually, you were more of an apartment gal or it's
housecale always.
Speaker 3 (30:18):
I'll never go back to living in houses like I
like apartment living too much.
Speaker 2 (30:22):
Yeah, do you think apartments the right apartments are good
investments these days?
Speaker 3 (30:27):
I think so, And they're great places to live as well.
Speaker 2 (30:29):
Where we've had this conversation, and that's the point. When
are you inviting around for a cup of tea or
something so I can see your flash.
Speaker 3 (30:36):
Apartment anytime you'd like to name the day you.
Speaker 2 (30:39):
Mentioned it on air? You can't say what about this
text from being hide do z B. This is the
time to buy a house. Next year when interest rates drop,
your house will jump fifteen percent in value. I don't
think given what we've been talking about, that's quite the scenario,
is it.
Speaker 3 (30:56):
Maybe not quite the fifteen percent, But I think the
point that we were talking about earlier, as the interest
rates come down, what you can afford to borrow increases,
and if you find yourself in a scrap, well we
find ourselves in a situation where we are under supplied
relative to demand, then that is what will happen to prices.
Speaker 2 (31:14):
Okay, Steve says, I don't see I just don't see
good growth without good immigration numbers. That's always been the
case in New Zealand. Y.
Speaker 3 (31:24):
It's possible We've got to get away from the candy
I suppose of always always feeding GDP growth of immigration.
Speaker 2 (31:35):
It was John Keithing, wasn't it.
Speaker 3 (31:36):
We certainly happened during those years did mask the fact
that we that that GDP growth per capita, and we
love talking about per capita in New Zealand, it's it's
our national sport. But our GDP growth per capita was
not was not strong, So we were getting kind of
you know, it was it was kind of fake growth,
(31:59):
and we were not building the infrastructure and the houses
and the schools and the housing and all all the
pipes in the ground that we need to go with it.
Speaker 2 (32:07):
You've touched on that, You've touched on a few little
sensitive moments. If anyone in central government right now, isn't
it What did you say, we haven't built the houses,
the schools, the hospitals, or the pipes in the grounds.
Pretty much sums up were not got it that long.
Speaker 3 (32:22):
Term infrastructure planning. I went to Norway last year and
it made me almost ill to see their beautiful long
term infrastructure and like twenty five year plans that they
they just keep building stuff. Kind of governments come, governments go,
the infrastructure just plows on. Now. Sure the multi trillion
dollar Sovereign Investment Fund with all of that.
Speaker 2 (32:45):
They do, they still dredge up a fair bit of
oil and sell it to the Norwegians, don't they.
Speaker 3 (32:49):
But they have invested it well in long term infrastructure.
Speaker 2 (32:53):
Yeah. I wonder if that has anything to do with
in certain season you never see the sun for a
week or two or three or four, the old mid night.
Speaker 3 (33:01):
The twenty four hour darkness that's the year.
Speaker 5 (33:04):
Yeah.
Speaker 2 (33:04):
Yeah, you want to make sure you had good infrastructure
for those colts.
Speaker 3 (33:07):
You do want to make sure that the power supply
is good when it's minus thirty two degrees outside.
Speaker 2 (33:14):
That's the one. That's the one. That's what I said for.
Larry says, can you please ask Helen for an update
on the deductibility of mortgage interest on a privately owned
residential property? Thank you. Timing wise, I can't. I know
it's all turning around, but I can't remember. We all
got time.
Speaker 3 (33:30):
I believe it's yes, I'm talking without having research having
the number at the top of my I think we're
back to eighty percent this year and one hundred percent
next year is being deductible, So the deductibility is being
phased back in.
Speaker 2 (33:46):
That's right and hopefully right.
Speaker 3 (33:48):
That was not text advice.
Speaker 2 (33:50):
No, no specific financial advice given on this show, although
we do like to just, you know, have a good
chat about the old Generally, I'd like.
Speaker 3 (33:57):
To have a few reckons.
Speaker 2 (33:59):
That's the word. You've nailed it exactly. We're going to
come back in the moment. The one property of the
week is up just after this break, and I tell
you it is an absolute classic. We're going to give
you the address. You will be able to go and
check it out on the one roof, so Helen's all
over it. She's nail. It's a cracker. There we go
the preview of that one. Well done to my producer Tira.
(34:20):
We'll be back in just to tick. It's twelve minutes
to five newstalks'd b Yes, welcome back to Well this
is the one Roof radio show. My guests Helen O.
Sullivan from Velocity. It is that magic time of day.
That's eight minutes to five.
Speaker 1 (34:35):
The one roof property of the Week on the Weekend Collective.
Speaker 2 (34:40):
Now, if you do get the chance to google this
our one roof property of the week, well not google it,
go to the one Roof, one roof dot curt it
in z it is. The address is two hundred and
forty four Ken would drive Matarrangi, Thames, Corimandel and it
is a three bedroom, two bathroom, two car garage garage garage.
I don't know this holiday home. It's a time capsule. Seriously,
(35:01):
they've even got a photo I think from nineteen seventy
six is the cover photo for it. An old in fact,
it must be because it shows he's got no neighbors.
It basically hasn't changed much esthetically, it's got retro warpaper,
green porcelain, bath and basin, a big backyard just like
the old day's huge backyard. Actually has had some upgrades
(35:22):
for modern day luxury, under floor insulation, gas, hot water,
and other hidden luxuries. As I say head because you
wouldn't have to look at it. It really looks like
it's straight out of nineteen seventy six order. But it's
been in the family for nearly fifty years, and clearly
they've had some wonderful memories. I think my producer Tira
is sure. She's absolutely positive, which means she thinks maybe
(35:43):
she stayed there as an airbnb. So anyway, Helen, it's
got an estimate an RV. I think the estimate price
is two point six eight million. I've got some quite
flashed neighbors. But the house itself is I mean, the
wallpaper in the shower alone, goodness may.
Speaker 3 (36:03):
The time caps you'll description is a good one in
the nineteen seventies for a pretty special time. As far
as internal decore.
Speaker 2 (36:13):
What sort of flaw is that it's a sort of
quirky sort of lineo. It's people will will recognize what
it does. It does look like it's it's ideal.
Speaker 3 (36:22):
For a batch though, right because the other the thing
that we haven't mentioned is its absolute beachfront. It is
this is like Keen would drive is the dress circle Matangi.
That beach is wild and when swept and magnificent, and
it is perched right on the beachfront. You go off,
you go out the front and into the.
Speaker 2 (36:44):
Surf and the shower stainless steel shower at the bottom.
Speaker 3 (36:48):
It's it's are you going to be tracking a lot
of sand and.
Speaker 2 (36:51):
There's a shower. You can tell there's a second shower
next to the garage when you because.
Speaker 3 (36:54):
You're going to de sand before you go inside.
Speaker 2 (36:57):
Excellent? Did you if you go on to have a
look at it the neighbors, it looks like the house
next to it, this may be, you know, estimate two
point six eight. The next door neighbors looks like about
fifteen million.
Speaker 3 (37:10):
There are some absolutely unbelievable homes down there. It is
quite it's quite something to just walk down along the beach.
It's hard to know whether you want to look out
to see and see that or look to the left
and see the holls I reckon.
Speaker 2 (37:21):
You know, the property is like this, there's I think
there's almost a sort of smugness. It's like you can
look at your neighbors who've got this amazing architectural marvel,
and you're there in your sort of ninety seventies batch,
and you're pretty much just giving people the finger, going
look at me. I'm on the beach and I'm in
(37:42):
my batch, and I bet you wish you were here.
Speaker 3 (37:45):
It's an interesting way of characterizing it, Tim, you may
be projecting.
Speaker 2 (37:49):
There a little bit, I think possibly, To be honest,
I guess if you offered me the fifteen million dollar
bunker next to it, I'd probably be quite happy there
as well. Anyway, you can go and check it out
on the one roof dot one roof, dot co dotdian Z.
It's two forty four ken I matter, Rangy, Tims, Crimandle.
I would be surprised if that estimate of two point
six eight million wasn't slightly exceeded by someone.
Speaker 3 (38:12):
Look chem would drive is incredibly tightly held. These beachfront
properties do not come to market very often, and the
most recent sale was for a much newer house, but
was over the threes. So you may well be right.
Speaker 2 (38:28):
I didn't see ho are they going to auction or
it must be auction, surely, isn't it. Oh I no
sold by deadline sale by the thirty first of October
twenty twenty four, unless sold prior. Oh I'll better get
them with my low ball offer right now.
Speaker 3 (38:39):
It gives you time to beat your paperwork in auder time.
Speaker 2 (38:41):
Now is the time to buy, and that's the one.
Speaker 3 (38:43):
Now is definitely How many million are we up to tonight.
Speaker 2 (38:48):
On the powerball? Enough?
Speaker 3 (38:50):
Enough?
Speaker 2 (38:50):
About ten?
Speaker 3 (38:52):
They would be enough.
Speaker 2 (38:53):
Hey, Helen, thanks so much for coming and always a pleasure.
Speaker 3 (38:56):
Tim thanks for having me.
Speaker 2 (38:57):
Yeah, you're welcome and we'll be back in just a
moment with the parents squad. Google Sutherland joins us. This
is News Talk z B three and a half minutes
to five.
Speaker 1 (39:07):
For more from the weekend collective, listen live to News
Talk ZEDB weekends from three pm, or follow the podcast
on iHeartRadio
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