November 15, 2024 • 41 mins
CoreLogic's latest Pain & Gain report for the third quarter of 2024 has just been released, showing the proportion of properties being resold for a higher price is down from the previous quarter.
The number of loss-making resales grew to 9.8%.
It's clear the market is softening - but what's causing it? And is it ever okay to sell at a loss?
CoreLogic's Head of Research Nick Goodall joins.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks.
I'd be the clearly your key is dead loaded the jewel.
Speaker 2 (00:19):
The key next, I'm sting that, my.
Speaker 3 (00:28):
Dearest class, and welcome back to the Weekend Collective.
Speaker 2 (00:46):
Mike and my producers going through a few Coplay ones
to find the ones that I like. And yes, that
is one I like. Actually, I've got to get over
that one that I don't like, which is that I'll
fix you I think is the one that I find
a little bit much. But anyway, it's been a huge
event for New Zealand, hasn't it the old Coplay concert.
Welcome back, This is the Weekend Collective. If you have
just joined us, this is the one roof show. We
want your calls and text IA one hundred and eighty
(01:08):
ten and eighty. Of course it's the number. Text nine
two nine two Now core logic, my guest, Actually should
I say yes?
Speaker 4 (01:15):
No?
Speaker 2 (01:15):
Core Logic. The latest Pain and Gain report for the
third quarter of twenty twenty four has been released, showing
the proportion of properties being resold for our higher price
is down from the previous quarter. The number of loss
making resales grew to nine point eight percent, let's just
round it up to ten percent. I know that's probably
sacrilege for a statistician. It's clear the market softening, but
(01:37):
what is causing it? And here's the question for you.
Is it ever okay to sell at a loss? Or
actually is it only on rare occasions we're selling at
a loss as bad news? I say that slightly mischievously,
but we're going to dig into that. Is it ever
okay to sell it at a loss? And in what
circumstances should you not be too feeling too catastrophic about it?
And with us?
Speaker 4 (01:57):
Now?
Speaker 2 (01:57):
Is core Logic's head of research, Nick Goodall get a
Nick hay Gang.
Speaker 5 (02:02):
Cur ita, very good, Thanks mate, thanks for having me.
Speaker 2 (02:04):
Yeah, thanks for you. Didn't go to cold Play, did you?
Speaker 5 (02:07):
No? I didn't. I was actually in Auckland last couple
of days too, And I'll be honest, I did have
a look at some last minute tickets but couldn't quite
make it work. So no, I mussed that on the
big Extravaganza.
Speaker 2 (02:16):
When you say you couldn't quite make it work, is
you couldn't quite make it work with your schedule and
when you saw the price of what they were selling
the tickets, you thought, I can't quite make that work.
Speaker 5 (02:24):
A little bit of both, and especially when you're throwing accommodation.
I'm based in Wellington, so I would have to stay
another night in Auckland, and your accommodation had skyrocketed, just
like fares. So yeah, they made the most of it,
that's for sure.
Speaker 2 (02:35):
Where did you look for your tickets? By the way,
did you just look on the resale sites or trade
me or what not?
Speaker 5 (02:40):
Just on the normal site. And then I had a
friend who had some tickets as well, so it was
just through through the people, I know. Really.
Speaker 2 (02:46):
Yeah, yeah, because I had a caller on my talk
back show in the wee small hours who bought a
ticket for like four hundred bucks or six hundred bucks
and sold it for three thousand. And I looked at
the resales and I was like, I can get one
for cheaper than that, and he just said to the person,
make me an offer, and the person said, I'll give
you three grands.
Speaker 6 (03:05):
And three.
Speaker 5 (03:07):
Hard to turn that down.
Speaker 2 (03:08):
Yeah, yeah, exactly. It wasn't yea noble, obviously, wasn't you
because you didn't go No, Now I actually know this
pain and Game report. What were the things that stood
out for you cool logics report, of course, what are
the things that stand out as the sort of headline grabbers.
Speaker 5 (03:24):
Yeah, I think, yeah, it sort of touched on it
there where were I think the Pain and Game report
in itself is just another measure of what's happening in
the market. And we know we've been through a softness
in the market. So to see that proportion of loss
making sales continue to increase only a little bit on
the previous quarter, but as you set up to about
ten percent, so one in ten properties selling at a loss,
(03:45):
tells us you know that things are still a bit
difficult out Therefore, some owners, I think, what really when
you look ato just one more granular level, you see
that those that were selling at losses in many cases
it's people that have owned it for two or three years.
So that's those people that have bought a couple of
years ago at the peak of the market. High indust
rates obviously affected them. Even though I guess rates are
four now, they might have been fixed for a longer period.
(04:08):
Cash flower shows issues. Maybe particularly investors had a slightly
larger proportion of properties sold at a loss. Some of
those investors with cash flow issues might well have just
said it's okay, sell it down as long as they
lose maybe too much equity, then it's not the worst
thing in the world, and you can always come back
back into the market later on. So there's a few
(04:28):
things there we sort of picked out and talk about,
and there's always some regional differences to which we can
always touch on. If that's at this time.
Speaker 2 (04:33):
Yeah, now, how and what percentage of do we know?
What percentage of people would have been guessing? You probably
won't know this, but I'll throw it at you anyway,
who wouldn't have been selling just and not getting back
in the market, Because if you're selling at a loss,
I mean, I'm mischievously through out there. Is it ever
(04:54):
okay to sell at a loss? Well, it's never that sexy,
is it. But if you are buying, and if you're
simply selling to buy, selling at a loss isn't as
catastrophic as it sounds, is it?
Speaker 5 (05:07):
Yeah? I guess it depends what you're doing next. If
you are selling and you might have lost a little
bit of money on that previous purchase price, but then
you again then go and buy another house which might
be cheaper or in a different region, and you feel
like you're getting value because you're buying in a slightly
weaker market, then maybe it doesn't matter too much. This
quick Christian is going to be how much equity maybe
did you lose? You know, if you've lost ten percent
(05:31):
of that property value and that was essentially half of
your deposit, maybe that's going to feel pretty impactful. But
if you do, if you're still able to recycle that
back into the property market, still be able to pay
off a mortgage then and you're edit for the long term,
then you'd still hope to regain that over the very
long term anyway. So I think there are situations which
could be okay for people, And of course there's sometimes
(05:51):
where there's just going to be a life situation which
means they don't have much of a choice in it,
whether it's a breakup in the family or a loss
of a job or something, and you don't have a
choice about each going to get it done.
Speaker 2 (06:01):
I mean, because if you are just selling because you
have to sell, and your selling at a loss, I mean,
I can't think of many more things that would be
more stressful in a way. I mean, when we often
have in the language of economics is there's a little
bit of pain in the market and stuff, but really
the consequences of selling a loss can feel pretty devastating,
can't they.
Speaker 5 (06:20):
Oh absolutely, yeah. You know, when you buy it, it'so
your dream, especially if it's an unoccupied buying that property.
You want to see values go up. You want to
see your equity increase, not decrease. And so for anyone
that did buy that peak, they've seen and just rates increased,
they've seen values fall at a tough time. And even
for investors, they don't want to take a loss either.
But I suppose part of the financial question for an
investor is going to be if I materialize this loss,
(06:43):
but that actually means I reduced my level of debt
and maybe I'm going to top up this mortgage on
a weekly monthly basis, and that's actually costing me money.
You might be better to cut your losses and move
on and as I said, improve your financial position to
then maybe reenter later on or look to do something
else with that money. So it is going to differ
depending on the reason you own that property. Certainly very
tough for a owner occupied, particularly a first time buy.
(07:05):
For an investor, they might have more ability to manipulate
their funds so it's not too devastating for them. But
you're never a good situation, that's for sure.
Speaker 2 (07:13):
I'd love to have your calls on this. If you
have had to sell at a loss, how did you
how did you minimize the pain? And is the question
of selling a loss is it always as catastrophic as
it sounds, because it always feels terrible, doesn't it. And actually, Nick,
you did throw in that example of course that even
if you are selling buying and selling in the same market,
(07:34):
if you have eroded your equity, it can affect what
you are, what you're able to have as a deposit.
I don't actually know the mechanics of this, which I've
taken for granted that if you had if you have
a mortgage and you are selling because you really needed,
because you are looking to move to different property, you're
moving towns, so in a way, maybe you're buying and
(07:55):
selling the same market. Of course, there are so many
different markets in New Zealand, of course, but can you
carry that mortgage with you? Do you know the answer
that I know it's not quite your ballpark being a
data guy, Yeah.
Speaker 5 (08:05):
I mean it's not you don't quite carry the mortgage
with you. I suppose you realize, you know, you get
your sale price for your old house. I suppose I
proposed an example using some of the real data. But
let's just make it nice and simple. You bought for
a million dollars three years ago. The median value of
the loss that's being taken is only, and i'd say
only in sort of inverted commas, you know, fifty five
thousand dollars. So it's not like people there will be
(08:25):
some people bigger on that, of course, and some people lower.
It's a median. But if you think on average on
that media, and fifty five thousand dollars on a million
dollar home, you know, then you're selling it nine fifty
odd nine to forty five. Then if you go and
buy a property for you know, eight hundred or nine
hundred thousand dollars, you've still got you know, you're still
going to take some capital out of that. I guess.
So if you went in there that were a two
(08:46):
hundred thousand dollars mortgage deposit and then you end up,
you know, only selling it for nine point fifty, and
then you buy a property for nine hundred. Then yeah,
you know, you've reduced how much equity or how much
value you've really owned yourself rather than the bank owning.
But as long as you sell it at a price
that is more than what your debt is, then generally
(09:08):
you're okay. And that depends what you do with that afterwards.
Speaker 2 (09:12):
Yeah, I guess I was thinking about the you know,
your qualification that you have with a bank. So you
know when when you when you take a mortgage out,
you've you've convinced them of X, Y and Z, and
they've said, right, you can borrow this money. And you've
decided that you're going to sell for whatever reason, it
may be duress force, or it may just be that
you're moving on do the bank. What I guess, what
(09:33):
I'm curious to know is whether the bank actually re
examines your your what there's an expression for it, and
it's eluding me because of just serviceability and you know,
your your reliability as a customer. That what I mean
is is it easy to transfer that the fact that
you've borrowed from them? Can you say to them, listen,
I just want to change the mortgage to this property
(09:54):
because I'm selling here and buying there. I would imagine
that that would be reasonably common, wouldn't it.
Speaker 5 (10:01):
And I think there's no real transfer. You have to
discharge your mortgage with the current army holder that you've
got with the bank. So as long as you sell
it for more than the debt. So, as I said,
if you an eight hundred thousand dollars debt, you sell
it for more than eight hundred grand, you pay that
debt back in full, then you're kind of free. You
can do whatever you want. If you sell it for
seven fifty and you owe the bank eight hundred, suddenly
there's a much greater discussion here because you need fifty
(10:21):
thousand dollars to actually clear that debt of that property.
So as long as you sell it for more than
your level of debt, you're kind of free to go
and do what you want. You can go then buy
an eight hundred dozand dollar property or six hundred thousand
dollar property, easy enough.
Speaker 2 (10:32):
So transactions, what I mean is would they allow you
to do that or they suddenly go, hang on the
equity and this property is less than it is less
than we had hoped, so now you can't borrow at all.
Speaker 5 (10:42):
I think it would be a fresh decision based on
your equity for the new property you're trying to buy.
So if you sold for eight to fifty you had
to pay a one hundred thousand dollars debt, You've only
got fifty thousand dollars deposit now, and so that's going
to be very hard to get a mortgage with that.
You might only be able to afford five hundred grand.
So obviously that's a significant impact to as you said,
your service ability, your affordability. But I would see them
(11:03):
as two very separate transactions. I wish for your debt
you good to go.
Speaker 2 (11:06):
And I guess you get advice from mortgage breaker before
you took any steps anyway, and just see what you
can see at advance, because yes, that sounds like good advice,
because I know that it's not quite your wheelhouse. But
I thought, while we're talking about the pain in the game, look,
we want your calls though. Have you ever had to
sell it a loss? And how did you how did
you go about dealing with that? And was it you know,
because you were buying and selling in the same market,
(11:27):
so he went too worried about it even though you
were Oversee, everyone likes to make money out of the
property market. We're taking your cause eight hundred eighty ten eighty.
But also we've got Nick good Or here. Here's from
core Logic, and I would suggest from his job description
as the head of research that if you've got some
questions about what the market is doing and your neck
of the woods, he might give you a he might
(11:49):
have a crack at giving you some you know, if
not the minute micro picture, the big picture on things
will be taking your calls right now eight hundred eighty
ten eighty text nine two nine two. It's eighteen past four.
News Talk said b let's welcome back. This is a
(12:23):
weekend collective. I'm Tim Beverage and this hour it's the
one roof radio show. My guest is core Logics head
of Research, Nick good Or. We're talking about is it
ever okay to sell at a loss? But also just
all the scenarios around settling at a loss and when
it's you know, not good, and when it's actually the
right decision regardless of a little bit of pain, and
when in fact, maybe there might not be any pain
because you're buying and selling in the same market and
(12:44):
you're simply just looking for a different house, different location,
maybe a different city. And of course I can hear
Nick probably almost as my gyminy cricket saying, well, if
you're going to move into a different city, it's not
technically the same market, is it, Nick.
Speaker 5 (12:56):
Yeah, fair point, Yeah, we see it quite separately. Good point.
Speaker 2 (12:59):
Yeah, I just thought I mentioned that because town's obviously
Auckland versus and Queenstown versus perhaperhaps so on. No, Hamilton
or christ Church quite different markets to a tapary maybe
quite different as well.
Speaker 4 (13:11):
I know what two.
Speaker 2 (13:12):
Tappre's on my mind. It comes up as my sort
of go to for mentioning a smaller center. But anyway,
let's carry on and take some calls. Gale High Hi there.
Speaker 7 (13:21):
Hi, Hey Nick, Hi, good afternoon. I just got a
quick question because I can't seem to figure out really
what the vibes here is in Hawk's Bay Post cyclone,
you know, with the market not commercial but residential. You know,
from what I read, it's sort of chugging along. But
then I think a lot of people asking unrealistic sort
of twenty twenty one prices still and nothing's moving. I
(13:45):
get that feeling, but that that's probably happening across the
country though, wasn't it you know, unrealistic pricing maybe in
some provinces. I'm not sure, you know, I'm just I
can't understand really what the market's doing here in Hawk's Bay. Okay,
no one tells you the truth, you know.
Speaker 2 (13:58):
Well that's the problem because there there's so many opinions
out there as well. But what it's going to do?
What how does the data tell us data? Sorry?
Speaker 5 (14:08):
No, all good, no good. Thanks for the call, Gale,
And I think it is an interesting one, right, But
I suppose that's where core logic try and get in
there to be you know, independent voice. We're sort of
haven't got a stake in the game. It does depend
on who you talk to as to what sort of
story you might get. But yeah, going back strictly to
the data, our Home Value Index, which measures what values
are doing over time, shows that, say, for Napier, values
(14:29):
are two point seven percent down in the last quarter,
Hastings down zero point nine percent. So we're still seeing
this downturn sort of continue a little bit for parts
of the Hawks Bay region. And then if you look
at where values are now compared to say the peak
of the market, they're still downsort of nineteen to twenty percent,
So I think it just shows that there has been
this significant downturn for the market. But then if you
(14:53):
go and compare to say pre COVID, so compared to
March twenty twenty, values are still ten percent up in
Napier and twenty two percent up in Hastings, So we
have seen still that growth over for a longer period
of time, almost five years now, which is crazy to
think about, but we're still seeing the sort of end
of the downtown. And I think the key thing we're
looking at across the country, as you say it's relatively
(15:14):
consistent across the country, is that we are kind of
getting to some form of inflection point now as interestrates
for sentiment and confidence are starting to improve, but it's
taking some time to work through the system, particularly because
many areas have got large levels of listings on the
market and that's just holding back this growth phase a
little bit more than in what have otherwise seen. And
(15:36):
that's true for Hawks Bay two listenings today compared to
a year ago are still twenty percent more. So it
just means it's still that Blier's market. There's no desperation
and things are going to just slowly turn around.
Speaker 2 (15:48):
So what are the sort of if people It's one
thing to read to read the news and to see
what pundits are saying about the market, But in terms
of reports, if you are interested in a particular market,
what sort of what sort of reports can some one
look for to give them some really good information? Because
while the while past performance doesn't indicate future performance, that
(16:13):
can give you a fair pictures to the momentum of
a market, can't it, Which.
Speaker 5 (16:18):
Helps with right absolutely, I mean that context is really
useful right looking at where things are compared to the past,
what's been happening lately? You know, what are some of
the factors that might influence, like well, how many properties
are listed for sale? That can sort of tell you
where that buyer power might be as well. And our
website we publish all our our pr anything that we
(16:39):
sent to media, off the stuff we're stending to clients,
we publish on our website too. And we also publish
a lot of these value changed so our home value Index.
You can go and download the data yourself from care Logic,
dot Coto and z. We even publish a suburb map
so you can go to care Logic, dot, Cota, and Z.
It's called mapping the market. If you google that, and
you can actually go and see what's happening in your suburbs.
(16:59):
So you can see the median value of your suburb.
You can see the change over one, three and twelve
months for free, and so there's a full map of
the country. You can just zoom to where you want,
click on your suburb and you'll see those figures, and
that can give you a really good feel for not
just how your suburbs doing, but how it might be
performing compared to suburbs around it, and if others are
growing in yours is not, maybe there's some potential chance
(17:20):
for yours to grow in the future, and vice versa,
of course, So I just think, as you say, it's
understand it's good in context of how your area compares
to other areas similar and same thing with how it's
how it's going and compared to recent history or even
longer term history, and a lot of that data is
available well.
Speaker 2 (17:36):
A classic example be literally what the report that's come
out recently talking about how there's still market softening going on,
because if you look at the headlines will always I
mean a good headline is like such and such sold
bought in in nineteen or twenty twenty for such and
such and sold for X. And you know that the
(17:56):
headlines can give you an inflammatory sense of what the
market's doing in either direction to be fair, and so
if you were going to for instance, you were chatting
out Hawks Bay with Gail before, but just having that
sense of where the market is gives you a bit
of a grounding when you go and have a look
at a property, have a chat with the agent who
(18:16):
may look their vested interest is I don't know they
want you to buy, but you know, in terms of
having that grounding, it is pretty it is pretty relevant
what's happening right now, isn't it. And the data that's
you know, the recent data data.
Speaker 5 (18:29):
Yeah, yeah, absolutely no, I think and that's where it is.
That does pay to do your own research, right So, yeah,
you can read a headline, or you can listen to
someone that's in the market, but you really can't be
going and looking yourself, you know, going and watching properties
that are selling, maybe putting your expectation on I expect
this property to sell for eight hundred thousand dollars. Let's
see how the rest of the market views that, and
(18:51):
if it sells for over then you know you're sort
of undervaluing property at that time. If it sells for
under that then or flip side, then you can adjust
your expectations on that property. So maybe if it's for
yours or whether it's for a property you want to
buy in the future as well. So I think you
know there to get an indication. As you said, you know,
not that they're fully sensationalizing, but those those extremity stories
of this person got a bargain or this person did
(19:13):
not so well, they're the ones that are going to
sell and get those headlines. That really pays to dig
into the detail and try and find some independent view
and voices and they'll help you along.
Speaker 2 (19:22):
Excellent, Right, let's take some more course, Andy High Right.
Speaker 4 (19:26):
Yeah, look, it's not actually directly related to but I've
had this bit of information or I've worked you said
about fifteen years ago. First home buyers have to save
months by month, year after year, Okay, Whereas the person
who already has property and wants to increase really goes
(19:52):
and gets evaluation if they had to go through a
savings plan in the same way to actually physically put
the money out of where it is into a savings
account level pl fields, it would slow the investor market
down and help the first term buyers.
Speaker 2 (20:13):
Mind you, it is worth pointing out that that second
home buyer, I guess the investor has gone through that journey,
haven't they.
Speaker 4 (20:20):
Yes, he has, he has, but then he's using capital
games to be able to enable him to rather than
actually put the physical money into the bank on a
month by months or whatever basis.
Speaker 5 (20:36):
Yeah, Nick, Yeah, it's the power of leverage, right, And
that is one thing that property has above many other
investment assets, is that you can leverage against equity that's
growing or that you already have or you've built up
in a property.
Speaker 4 (20:50):
But the level playing field isn't very very fair on
the first term buyer.
Speaker 5 (20:54):
Yeah, it's a fair point, and I'm look, this is
I think this is something that's often being discussed at
government level. You know, how we provide that assistance for
first time buyers because we know it helps people prosper
if they can get into the property market. And there
has been, you know, in the last few years, plenty
of things that have looked at an investor activity. The
really interesting thing when we look at the data, is
that nationwide in October twenty seven point eight percent of
(21:16):
sales with the first time buyers. That's the highest number
on record that we've seen, and it has continually been
growing in the last week while. And so it's what's
been interesting is as this market's been a bit quieter,
and yes it's been relatively higher though of course they
have improved last couple of months, first time buyers have
actually been relatively active. They continue to find a way
they had just expectations they can move further from town,
they can buy that townhouse when of course they want
(21:38):
to buy a big house on a big block of land.
So I think we just tend to find the first
time buyers will find a way. They probably borrow that
money maybe from parents or parents equity to get into
the market. And we do think that one of the
key changes that's going to occur, well it'll start to
have an influence in the next few years, is the
introduction which happened earlier this year, of the debt to
income restrictions. And these debt to income restrictions, while they're
(22:01):
there to protect our financial system, they are going to
have a greater impact on investor activity and how many
investment properties investors can buy and how fast they can
get and can accumulate those properties as these things start
to kick in. So there are some things that have
improved for investors, like reduction of l vrs. You know
you can run off your just costs. Again, the debt
(22:21):
to income restrictions are going to start to impact those
investors in future as well, which you know, as a
balancing act, will start to enable those first time buyers
to remain value to the active as they have done
for most of this year.
Speaker 2 (22:32):
What do you think of that, Andy, the changing rules
on to income for restrictions.
Speaker 4 (22:39):
But it's sure not a level playing field. Yes, I mean,
can you do more emboldened and the girls want to
have a house and they're more fearless, but true ignorance
in terms of the problems and and all that. But
(23:00):
I was only trying to look at a method of
leveling the player.
Speaker 2 (23:05):
I don't know how. I don't know how you would
in a way, because either way, everyone is whoever it is,
whether you're an investor with a bit of equity or
whether you're someone who's got slogged away and saved a
way to get the cash. You are still borrowing a
large amount of money and it's always going to be
related to what you're worth.
Speaker 6 (23:22):
You know.
Speaker 4 (23:22):
But I mean once, as I say, once you get
off the ground and you you paid your first house
then and we caful gains, that's you know, it's a doddle.
Speaker 2 (23:30):
After that, well, well it's a dottle. It's still for
some people don't manage to pull off it. I don't
know if there's anyone around that neck. I mean, it's
an interesting call for many. Thanks for cool mate.
Speaker 5 (23:41):
It's a hard it's a hard and I think because
you know, we can't we can't not have property investors
out there. You know, there are properties that must be
owned by an investor that want to be rented by
tenants who are transient students or other people that don't
want to or are never going to be able to
buy a property. So you need to sort of a
market that functions consistently and wellfare property investment as well.
It can't all be done by the government, so it's
(24:03):
a hard one to get that balance right. There's no doubt.
Speaker 4 (24:05):
You know.
Speaker 5 (24:05):
There are talks of course about capital gains taxes, about
wealth taxes. You know, you could have other wealth wealth
forms of taxing people's equity and a property. These are
all considerations that go on, and as well as things
like the debt to income restrictions, which are actually not
necessarily political. They're done by the Reserve Bank, and so
they're more about the financial system and ensuring that we
(24:26):
don't have too many borrowers, whether it's investors or occupiers
borrowing too much compared to their income or with not
much equity. That could cause a real problem should we
go into a really significant and deep recession. I know
we're sort of in one still at the moment, but
if it's got really bad and much more job losses,
you would see a lot more of a problem for
our financial system, which is not a good thing. So, yeah,
(24:47):
it's a tough balance to get for the financial system
and for politicians.
Speaker 2 (24:50):
Politicians there's a text here here asks where our previous
quarter doesn't use his capital to get his daughter alone. Well,
it can be a complex thing because I guess if
my caller is if you're retirement age and things like
that and you don't really want the risk, I know
that's the thing. Actually, I wonder how many parents do
actually use their capital to get their kids into the market.
Speaker 5 (25:11):
I think we've heard more and more about that. It's
hard to get the hard data on it, but I
think if you talk to brokers as we do, and
we're so we're firmly entrenched in that mortgage learning decision
and we're out there talking about those brokers and bankers
all the time. So then when you talk to them,
and there's no doubt that you know, for many people,
that's the only way they can essentially get that deposit
or get that guarante at the back of being able
to service those mortgages. Maybe that improves as intstrates full.
Speaker 4 (25:34):
But you know, house.
Speaker 5 (25:35):
Prices is still relatively expensive compared to income, so often
you do need some form of assistance, and that's that's
tough because you know, some people just won't have parents
with that ability.
Speaker 2 (25:44):
What does your data tell us about why the market
is softening? Because the the sort of lay person's understanding
is like all money is getting cheaper, market's going to
be taking off soon, But your data is showing that's
still we're pretty soft. What do you know about why?
Speaker 5 (26:01):
I mean, I don't want to oversimplify it, but it
pretty much does come down to a for audibility and
the fact that we've had such strong growth in prices,
you know, as we went through COVID. Yes, prices have
come back in the last sort of couple of years,
but still when you look at house prices compared to income,
it's still really expensive to buy property in New Zealand.
And so while that's starting to change now as interest
(26:22):
rates fall, when people can borrow more money to be
able to keep up with that, it's still quite difficult
for me in many of those people and for those
that already own property, yes, interest rates are falling, but
of course they will fix their mortgage for six, eighteen,
twelve months, whatever it is, so it takes some time
for them to actually realize the benefits of those interstrates
falling too. So it'll take some time for saying unoccupied
(26:42):
moving house to trade up or trade cybers that it
might be. They're not quite as active right now either.
And the other factor I think we should acknowledge is
that that labor market of ours is still very weak.
You know, we're still seeing fewer jobs filled at the moment.
We know, particularly here in Wellington, the government is still
going through a number of cut through that public service.
If you're nervous about your job, you certainly aren't transacting
(27:05):
property market where it's a massive amount of mismanic equity
and value and income required to service those mortgages. So
I think that's just holding some of those buyers back
of there's nervousness about their job.
Speaker 2 (27:17):
What is the vibe in Wellington on two levels? Just
generally given the public services is a large part of
that city and we've seen the adjustment and the job
numbers and all that. That's a euphemism of very used one.
But also the market, what's it doing?
Speaker 5 (27:31):
Yes, still declining, but as most of the rest of
the country and all kind in particular is also quite
similar to that. I think for Wellington, values at the
moment are down one point two percent in the last month,
three percent in the last quarter. Really interesting when you
look at Wellington compared to pre COVID, it's only five
percent higher, So that's almost five years and there's only
(27:52):
five percent higher values, so you know, an average of
one percent growth per year. I don't think many people
would be too happy with that sort of return, and
it just shows how far values have come back down,
which is twenty five percent from that peak. So no
doubt that softness has been very real across the Wellington region.
You know, maybe you'd say that values just got over
inflated now that nervous starts to creep in, and so
(28:13):
we're just not seeing that that that strength come back
through and that well into market stuff.
Speaker 2 (28:18):
Just as context on Wellington. Wasn't Wellington, by my recollection,
one of the bigger jumps when the cheap money came out.
Speaker 5 (28:27):
Yeah it was, but it wasn't the only one there was.
Still there was still plenty that saw strong, strong growth
as well through that period of time. So yeah, that
will different be a influence. I think. You know, in
some parts of Wellington, like Lower Heart where there was
a lot of development going on, I think some people
probably paid for sections that could have two properties on it,
let's say, or be developed, probably overpaid for that because
(28:48):
they saw the potential once it was finished with two properties.
Then once you maybe can't do that, developmental things slow down.
Then you have to sell it. But you're actually selling
it as only a single property or single house. Then
you're starting to you know, you're realizing the full value
of that property either and that sort of shows that
values come back a bit faster in some of those
areas too, So definitely a number of factors there, and
wrap that's certainly one of them. Over to the ament.
Speaker 2 (29:10):
Yeah. Look, actually I've got a few text questions as
and a couple of owner We're going to follow up
with her as well. But if you'd like to ask
Nick Good or any questions or give your take on
selling it a loss and how you cope with it
or whether it's always the catastrophe that it sounds like
in the property market, give us a call one hundred
and eighty ten eighty. It's twenty one minutes to five
news talk z'd be living.
Speaker 6 (29:29):
The good dreams leaving Tennessee you Santa Monica. I swear
it's going we'll meet my mama. God, it's gonna causy scene.
She sees her baby girl and she's gone, swam have
your you're a pink party girl and you dance at
(29:53):
the club, Mama. I'm just having that homicage.
Speaker 2 (29:59):
Generally, it's word and welcome back. This is the weekend
collect If my producer says that there is one for
Shaye to post something to do with pony clubs, I
have no ideas the relevance of it. But anyway, this
is one if radio show talking about the softness in
the market and what's causing it. Is there ever, is
it ever okay to sell it a loss? But also
taking your questions for from core Logics, knic of research,
(30:22):
head of research and at good or goodness me and
all over the place there. Hey, if you texts to
get to Nick first one you mentioned in your example,
say that out of a million dollar house, the loss
is on average across New Zealand not you know, there
are idiosyncrasies and all sorts of markets, but the average
is lost to say, fifty five thousand. Just a question says,
(30:44):
does the loss that you're reporting does that take into
account the selling agent fees which can also be a
significant percentage of that property And they wouldn't.
Speaker 5 (30:53):
Know no, just listening just the selle price to sale price.
So yeah, that's a good point, right, there's way more
fees and things assocaid with selling a property and you've
got no idea what might they might have put into
it in terms of maintenance or improvements. So yeah, it's
literally just the sale price or the purchase price they made,
and in the sale price they took at the end
of it. So yeah, very simple measure, perhaps us to
understand consistency over time, but yeah, there's going to be
(31:14):
those other things to take account of. So you're right,
the loss will actually be greater than that in many cases.
Speaker 2 (31:19):
How much variation is there and the amount of commission
that are being charged by agents around the country.
Speaker 5 (31:25):
Yeah, I don't think there's too much variationally, usually in
that two to three percent mark. There's some that do
fixed fees, and so you know there's going to be
some variability depending on where you are and which which
firm you choose, and certainly which part of the market
you're in. But I think a typical expectation would be
around that two to three percent mark.
Speaker 2 (31:41):
Okay, let's have a lot a few more texts once.
I'm not sure I quite understand this one, but you
might be able to interpret it for me. Gary says
to the capital tax refund will soften the blow of
selling it a loss in the future, thanks labor. Is
that is that based on you may have paid tax
on your profit via the bright line test, then you
(32:05):
can get it back if you've made a loss on
your investment property. But my understanding is that all that
tax is ring fenced.
Speaker 5 (32:11):
So, yeah, it is. It is, So I'm not exactly
I'm not a little bit of a confusion there, I
think as to what that's actually talking about. But yeah,
I think your interpretation sounds about right to me too.
Speaker 2 (32:22):
I think it's about offset. Yeah, basically, you make a profit,
you have a loss, then you offset the tax. But yeah,
I think the bright line test was under the ragimement.
It was ring fence, wasn't it, Unless you're doing something.
Speaker 5 (32:33):
I think there's slightly separate things. But yeah, there's definitely
a ring fencing of tax losses. So you can't write
off your tax loss from a property against your other
taxes from other forms of income. You can't. You couldn't
do that for a long time, so I think that
changed a while ago and it was added separate to
the bright line test. But yeah, certainly means that you
can't be running off your tax costs across different forms
of income anymore, so taking a loss can be balanced
(32:55):
out the other way.
Speaker 2 (32:56):
Do you have a view on whether that's a good
or a bad.
Speaker 5 (32:58):
Thing in terms of ring fixing those losses? Yeah, I
suppose you know. It makes sense to me. I guess,
you know, making sure that you say, if you're going
to invest in something, make sure it's profitable in its
own right, and so you're looking at that as a
single entity as opposed to being able to write it
off against other forms of incomes. I suppose that it
means that you're making a much more stronger and smarter
(33:20):
financial decision to own that property. You know, the rental
income coming in is going to cover the cost of
you owning that, So I guess it makes some practical
sense from that perspective, but I haven't really thought too
much about you know, it doesn't distort the market or
have any major influence outside of that, I wouldn't say,
maybe not too much, because if you can't make it work,
there's a chance that someone else could anyway, And maybe
(33:40):
that's a better system to be setting up so that
you know, those those tenants are getting a landlord that's
much more financially set up to look after that property
and look after those people.
Speaker 2 (33:49):
You were talking as well about the percentage of first
home buyers that are in the market at the moment, Well,
I can't remember the number you mentioned.
Speaker 5 (33:55):
Almost twenty eight percent, So would.
Speaker 2 (33:59):
A change in that number. What sort of change in
that number would indicate the market market is recovering because
investors are getting back on or is that sort of
largely irrelevant.
Speaker 5 (34:12):
No, I think it's a fair point. You probably could
use how active are first home buyers as to what's
going on in the market. It's not like it's been easy, right,
and it's never easy to get your first time so
I don't want to make it out like it is.
What has been interesting is since April we have seen
a continual, gradual lived in mortgaged investors getting into the
market too, coming back into the market. The group that
(34:34):
has been really quiet has actually been those owner occupiers
moving house and our sort of interpretation of that is
those are probably the people that are feeling nervous about
their job and if you've got a house, just worry
about paying that off rather than thinking about moving up
in the world. So, you know, at the moment, first
time buyers and investors have been increasing their share of sales,
and you know that's not reflecting anything else in the
(34:56):
market except for the fact that movers aren't really as
active as investors.
Speaker 2 (35:00):
You say first home buyers and first time investors, did
you say.
Speaker 5 (35:03):
Well, we're just all investors, just all investors. Yeah, So
I think they're both seeing share of their sales increase.
It's the movers that are slowing down. As investors continue
to find value in this market because the gust rates
are falling, so that yield is going to start to
improve for them. That could start to slow those first
time buyers down. They're going to see a bit more
competition in some parts of the country. Some parts of
(35:25):
the market they do compete. First time buyer properties are
similar to what investor might buy, but they don't always
cross over either. So it's not always a case just
going investors are increasing that must be negatively affecting first
time buyers. So we need to tighten some sort of
rule up or chain some rules to rebalance that. It's
not always the case. And as I said, first time
buyers for the twenty odd years, we've got a series
(35:47):
of their activity. They always find a way, you know,
whether it's just to adjust expectations or move somewhere else,
that's kind of the way they get into that market.
Speaker 2 (35:56):
Do you see the soft market continuing for a while?
Speaker 5 (35:59):
Not for too much longer. I think, you know, we've
already seen some parts see some form of growth. It's
pretty gradual of the stage in some parts of the country,
but certainly there's been some areas that are showing some growth.
So I think we're seeing it a little bit. You know,
there is that lift and confidence, that lift and sentiment
across the country and that's going to feed through to
some growing property values. But now we're getting close to Christmas,
(36:23):
I think we're not going to see any material growth
and property values. Maybe to we come back from that
Christmas break, people have got more certainty in their job.
Interest rates have fallen, We've probably got a great expectation
about you know what's next with interest rates, especially after
we here from the Reserve Bank and you know what's
about eleven days? I think it is when instead of
twenty seventh of November, that's going to be a really
interesting one. They will give us the updated forecasts of
(36:45):
the official cash rate and so that'll give a really
good feel for what's next and the market will definitely
be impacted by that.
Speaker 2 (36:51):
Do they actually make any change on the in eleven
days time or is it just saying what might be
happening and what No?
Speaker 5 (36:58):
Yeh official cash rate decision yep. And we're expecting a
fifty basis point four to that. So take the official
cash rate from four point seventy five to four point
two five percent. There's a chance that's seventy five, maybe
a chance it's twenty five, but most seem to be
stuck on that fifty. But it's been pretty well signposted too,
so you might not see mortgagees traits change too much
off the back of that.
Speaker 2 (37:17):
Won't be one, then, won't be one hundred.
Speaker 5 (37:19):
I can't see it being one hundred. I'd be surprised
if it's seventy five too. We're only seeing falls of
seventy five basis point four a couple of times before
Global Financial Crisis and COVID and those you'd call those
emergency situations, right, no one really knew what to expect.
This is not an emergency. Not saying it's great right
now with our economy struggling and unemployment rising, but it's
not really an emergency. So I can see the Reserve
(37:40):
Bank just just taking that standard fifty everyone expects it.
Don't need to shock the market, and then wait un
till they come back in February to see what happens next.
Speaker 2 (37:48):
Stead is she goes sort of. Yeah, anyway, it probably
feels like a huge jump for Adrian orbit. We'll waiting
see what happens. Look, we'll be back in just a moment.
The one re propably the week, it's ten minutes to
five News Talks. He'd be Y's welcome back to the
Weekend Collective. This is the one roof radio show. By
the way, if you missed any of the discussions we have,
we had a fantastic panel a shamed to play Mark
kras as well. You can check it out wherever you
podcasts iHeartRadio, look for the Weekend Collective. But right now
(38:10):
it is six and a half minutes to five.
Speaker 1 (38:14):
The one roof propity of the week on the Weekend Collective.
Speaker 2 (38:18):
Now, the one roof property of the week is as
I say, almost every week, almost not last week, but
this week it's like taking a little holiday. You go
a bit of a nosey through some spectacular homes. This one,
I'm just going to tell you it's ten million bucks. Okay,
it's an advertisement. I would say for the architects. It
is thirty Rawennie Rawennie r Awe and e Avenue in
(38:41):
Westmea Auckland. You can check it out on the one
roof website. It's estimated about nine point six four million
low nine million high ten. Of course, you know we're
just talking millions. It's no big deal. But it's an
n z IA Award winning home by Stevens Laws and Architects.
It resonates with a soulful atmosphere. This is the blurb
from the real estate agents ever focused on the harbor.
(39:03):
It's waterfront property. It's got a soothing karma. It's got
a soothing vibe to it, and I guess you can't
really argue with that convenience city location, of course, because
it's in West May, not too far from the city center.
It's got gorgeous flying look. I'm not going to continue
reading the blurb it's got but it's got cathedral like
ceilings and it is one of those properties. Funny enough,
(39:24):
I think if you were in the money and looking
for I think choosing an architect sometimes is the biggest
thing if you've got the cash to really build something beautiful,
and I would say that this home is I'd be
wanting to knock on the doors of these architects because
it's got what do you reckon? Nit good. All it's
pretty pretty flash as amazing.
Speaker 5 (39:42):
It's pretty much everything you'd look through and go if
I had a dream home, what's it going to look like?
This time's pretty much got it all, you know, the
little pool, but also being right there on the water,
the size, the beauty, just everything everything you'd made. It's
pretty pretty special.
Speaker 2 (39:56):
Yeah, what are the photos that you look for if
you're scanning through a house. What's the one that grabs
you and you go, oh, I want it?
Speaker 5 (40:04):
I think the colors, right, like, I think you can
go through these and you see it's kind of got
its own green coming through parts of the lawn as well.
Obviously the view and where it's located a big part
of that. And then I think you can just tell
the quality of some of those furnishings and the rooms
have just been immaculately designed as well. So I mean, yeah,
that's a pretty special one for me. But I think
living spaces, especially that outdoor area, that's the one that
(40:27):
grabs me a lot.
Speaker 2 (40:28):
Yeah for me, Actually, I don't know why. I do
go to the kitchen and I like a nice tiled bathroom,
but it's the outdoor living. It's absolutely stunning. But if
you want to have a look at it. It's thirty
Rawini Avenue and as I say, it's attestment to an
amazing job by the architects. Just a gorgeous property. Hey neck,
we've got about twenty seconds to go, but what's your
next body of work you're slogging away at.
Speaker 5 (40:50):
We'll have our monthly chart pack out this week, well
next week, I suppose it is. And that really is
just our full overview of what's having in the market.
We'll even publish some of that first time buyer data.
There'll be listenings information in there, yield information for investors
as well as that value.
Speaker 2 (41:05):
So excellent you there and you can go to core
Logic dot cutter and said Nick good all. Thanks so much, mate,
really appreciate it. We'll be back with the parents squad.
Sarah Chatwin is next. Sarah, Sorry, thanks so
Speaker 1 (41:16):
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.
I'd be the clearly your key is dead loaded the jewel.
Speaker 2 (00:19):
The key next, I'm sting that, my.
Speaker 3 (00:28):
Dearest class, and welcome back to the Weekend Collective.
Speaker 2 (00:46):
Mike and my producers going through a few Coplay ones
to find the ones that I like. And yes, that
is one I like. Actually, I've got to get over
that one that I don't like, which is that I'll
fix you I think is the one that I find
a little bit much. But anyway, it's been a huge
event for New Zealand, hasn't it the old Coplay concert.
Welcome back, This is the Weekend Collective. If you have
just joined us, this is the one roof show. We
want your calls and text IA one hundred and eighty
(01:08):
ten and eighty. Of course it's the number. Text nine
two nine two Now core logic, my guest, Actually should
I say yes?
Speaker 4 (01:15):
No?
Speaker 2 (01:15):
Core Logic. The latest Pain and Gain report for the
third quarter of twenty twenty four has been released, showing
the proportion of properties being resold for our higher price
is down from the previous quarter. The number of loss
making resales grew to nine point eight percent, let's just
round it up to ten percent. I know that's probably
sacrilege for a statistician. It's clear the market softening, but
(01:37):
what is causing it? And here's the question for you.
Is it ever okay to sell at a loss? Or
actually is it only on rare occasions we're selling at
a loss as bad news? I say that slightly mischievously,
but we're going to dig into that. Is it ever
okay to sell it at a loss? And in what
circumstances should you not be too feeling too catastrophic about it?
And with us?
Speaker 4 (01:57):
Now?
Speaker 2 (01:57):
Is core Logic's head of research, Nick Goodall get a
Nick hay Gang.
Speaker 5 (02:02):
Cur ita, very good, Thanks mate, thanks for having me.
Speaker 2 (02:04):
Yeah, thanks for you. Didn't go to cold Play, did you?
Speaker 5 (02:07):
No? I didn't. I was actually in Auckland last couple
of days too, And I'll be honest, I did have
a look at some last minute tickets but couldn't quite
make it work. So no, I mussed that on the
big Extravaganza.
Speaker 2 (02:16):
When you say you couldn't quite make it work, is
you couldn't quite make it work with your schedule and
when you saw the price of what they were selling
the tickets, you thought, I can't quite make that work.
Speaker 5 (02:24):
A little bit of both, and especially when you're throwing accommodation.
I'm based in Wellington, so I would have to stay
another night in Auckland, and your accommodation had skyrocketed, just
like fares. So yeah, they made the most of it,
that's for sure.
Speaker 2 (02:35):
Where did you look for your tickets? By the way,
did you just look on the resale sites or trade
me or what not?
Speaker 5 (02:40):
Just on the normal site. And then I had a
friend who had some tickets as well, so it was
just through through the people, I know. Really.
Speaker 2 (02:46):
Yeah, yeah, because I had a caller on my talk
back show in the wee small hours who bought a
ticket for like four hundred bucks or six hundred bucks
and sold it for three thousand. And I looked at
the resales and I was like, I can get one
for cheaper than that, and he just said to the person,
make me an offer, and the person said, I'll give
you three grands.
Speaker 6 (03:05):
And three.
Speaker 5 (03:07):
Hard to turn that down.
Speaker 2 (03:08):
Yeah, yeah, exactly. It wasn't yea noble, obviously, wasn't you
because you didn't go No, Now I actually know this
pain and Game report. What were the things that stood
out for you cool logics report, of course, what are
the things that stand out as the sort of headline grabbers.
Speaker 5 (03:24):
Yeah, I think, yeah, it sort of touched on it
there where were I think the Pain and Game report
in itself is just another measure of what's happening in
the market. And we know we've been through a softness
in the market. So to see that proportion of loss
making sales continue to increase only a little bit on
the previous quarter, but as you set up to about
ten percent, so one in ten properties selling at a loss,
(03:45):
tells us you know that things are still a bit
difficult out Therefore, some owners, I think, what really when
you look ato just one more granular level, you see
that those that were selling at losses in many cases
it's people that have owned it for two or three years.
So that's those people that have bought a couple of
years ago at the peak of the market. High indust
rates obviously affected them. Even though I guess rates are
four now, they might have been fixed for a longer period.
(04:08):
Cash flower shows issues. Maybe particularly investors had a slightly
larger proportion of properties sold at a loss. Some of
those investors with cash flow issues might well have just
said it's okay, sell it down as long as they
lose maybe too much equity, then it's not the worst
thing in the world, and you can always come back
back into the market later on. So there's a few
(04:28):
things there we sort of picked out and talk about,
and there's always some regional differences to which we can
always touch on. If that's at this time.
Speaker 2 (04:33):
Yeah, now, how and what percentage of do we know?
What percentage of people would have been guessing? You probably
won't know this, but I'll throw it at you anyway,
who wouldn't have been selling just and not getting back
in the market, Because if you're selling at a loss,
I mean, I'm mischievously through out there. Is it ever
(04:54):
okay to sell at a loss? Well, it's never that sexy,
is it. But if you are buying, and if you're
simply selling to buy, selling at a loss isn't as
catastrophic as it sounds, is it?
Speaker 5 (05:07):
Yeah? I guess it depends what you're doing next. If
you are selling and you might have lost a little
bit of money on that previous purchase price, but then
you again then go and buy another house which might
be cheaper or in a different region, and you feel
like you're getting value because you're buying in a slightly
weaker market, then maybe it doesn't matter too much. This
quick Christian is going to be how much equity maybe
did you lose? You know, if you've lost ten percent
(05:31):
of that property value and that was essentially half of
your deposit, maybe that's going to feel pretty impactful. But
if you do, if you're still able to recycle that
back into the property market, still be able to pay
off a mortgage then and you're edit for the long term,
then you'd still hope to regain that over the very
long term anyway. So I think there are situations which
could be okay for people, And of course there's sometimes
(05:51):
where there's just going to be a life situation which
means they don't have much of a choice in it,
whether it's a breakup in the family or a loss
of a job or something, and you don't have a
choice about each going to get it done.
Speaker 2 (06:01):
I mean, because if you are just selling because you
have to sell, and your selling at a loss, I mean,
I can't think of many more things that would be
more stressful in a way. I mean, when we often
have in the language of economics is there's a little
bit of pain in the market and stuff, but really
the consequences of selling a loss can feel pretty devastating,
can't they.
Speaker 5 (06:20):
Oh absolutely, yeah. You know, when you buy it, it'so
your dream, especially if it's an unoccupied buying that property.
You want to see values go up. You want to
see your equity increase, not decrease. And so for anyone
that did buy that peak, they've seen and just rates increased,
they've seen values fall at a tough time. And even
for investors, they don't want to take a loss either.
But I suppose part of the financial question for an
investor is going to be if I materialize this loss,
(06:43):
but that actually means I reduced my level of debt
and maybe I'm going to top up this mortgage on
a weekly monthly basis, and that's actually costing me money.
You might be better to cut your losses and move
on and as I said, improve your financial position to
then maybe reenter later on or look to do something
else with that money. So it is going to differ
depending on the reason you own that property. Certainly very
tough for a owner occupied, particularly a first time buy.
(07:05):
For an investor, they might have more ability to manipulate
their funds so it's not too devastating for them. But
you're never a good situation, that's for sure.
Speaker 2 (07:13):
I'd love to have your calls on this. If you
have had to sell at a loss, how did you
how did you minimize the pain? And is the question
of selling a loss is it always as catastrophic as
it sounds, because it always feels terrible, doesn't it. And actually, Nick,
you did throw in that example of course that even
if you are selling buying and selling in the same market,
(07:34):
if you have eroded your equity, it can affect what
you are, what you're able to have as a deposit.
I don't actually know the mechanics of this, which I've
taken for granted that if you had if you have
a mortgage and you are selling because you really needed,
because you are looking to move to different property, you're
moving towns, so in a way, maybe you're buying and
(07:55):
selling the same market. Of course, there are so many
different markets in New Zealand, of course, but can you
carry that mortgage with you? Do you know the answer
that I know it's not quite your ballpark being a
data guy, Yeah.
Speaker 5 (08:05):
I mean it's not you don't quite carry the mortgage
with you. I suppose you realize, you know, you get
your sale price for your old house. I suppose I
proposed an example using some of the real data. But
let's just make it nice and simple. You bought for
a million dollars three years ago. The median value of
the loss that's being taken is only, and i'd say
only in sort of inverted commas, you know, fifty five
thousand dollars. So it's not like people there will be
(08:25):
some people bigger on that, of course, and some people lower.
It's a median. But if you think on average on
that media, and fifty five thousand dollars on a million
dollar home, you know, then you're selling it nine fifty
odd nine to forty five. Then if you go and
buy a property for you know, eight hundred or nine
hundred thousand dollars, you've still got you know, you're still
going to take some capital out of that. I guess.
So if you went in there that were a two
(08:46):
hundred thousand dollars mortgage deposit and then you end up,
you know, only selling it for nine point fifty, and
then you buy a property for nine hundred. Then yeah,
you know, you've reduced how much equity or how much
value you've really owned yourself rather than the bank owning.
But as long as you sell it at a price
that is more than what your debt is, then generally
(09:08):
you're okay. And that depends what you do with that afterwards.
Speaker 2 (09:12):
Yeah, I guess I was thinking about the you know,
your qualification that you have with a bank. So you
know when when you when you take a mortgage out,
you've you've convinced them of X, Y and Z, and
they've said, right, you can borrow this money. And you've
decided that you're going to sell for whatever reason, it
may be duress force, or it may just be that
you're moving on do the bank. What I guess, what
(09:33):
I'm curious to know is whether the bank actually re
examines your your what there's an expression for it, and
it's eluding me because of just serviceability and you know,
your your reliability as a customer. That what I mean
is is it easy to transfer that the fact that
you've borrowed from them? Can you say to them, listen,
I just want to change the mortgage to this property
(09:54):
because I'm selling here and buying there. I would imagine
that that would be reasonably common, wouldn't it.
Speaker 5 (10:01):
And I think there's no real transfer. You have to
discharge your mortgage with the current army holder that you've
got with the bank. So as long as you sell
it for more than the debt. So, as I said,
if you an eight hundred thousand dollars debt, you sell
it for more than eight hundred grand, you pay that
debt back in full, then you're kind of free. You
can do whatever you want. If you sell it for
seven fifty and you owe the bank eight hundred, suddenly
there's a much greater discussion here because you need fifty
(10:21):
thousand dollars to actually clear that debt of that property.
So as long as you sell it for more than
your level of debt, you're kind of free to go
and do what you want. You can go then buy
an eight hundred dozand dollar property or six hundred thousand
dollar property, easy enough.
Speaker 2 (10:32):
So transactions, what I mean is would they allow you
to do that or they suddenly go, hang on the
equity and this property is less than it is less
than we had hoped, so now you can't borrow at all.
Speaker 5 (10:42):
I think it would be a fresh decision based on
your equity for the new property you're trying to buy.
So if you sold for eight to fifty you had
to pay a one hundred thousand dollars debt, You've only
got fifty thousand dollars deposit now, and so that's going
to be very hard to get a mortgage with that.
You might only be able to afford five hundred grand.
So obviously that's a significant impact to as you said,
your service ability, your affordability. But I would see them
(11:03):
as two very separate transactions. I wish for your debt
you good to go.
Speaker 2 (11:06):
And I guess you get advice from mortgage breaker before
you took any steps anyway, and just see what you
can see at advance, because yes, that sounds like good advice,
because I know that it's not quite your wheelhouse. But
I thought, while we're talking about the pain in the game, look,
we want your calls though. Have you ever had to
sell it a loss? And how did you how did
you go about dealing with that? And was it you know,
because you were buying and selling in the same market,
(11:27):
so he went too worried about it even though you
were Oversee, everyone likes to make money out of the
property market. We're taking your cause eight hundred eighty ten eighty.
But also we've got Nick good Or here. Here's from
core Logic, and I would suggest from his job description
as the head of research that if you've got some
questions about what the market is doing and your neck
of the woods, he might give you a he might
(11:49):
have a crack at giving you some you know, if
not the minute micro picture, the big picture on things
will be taking your calls right now eight hundred eighty
ten eighty text nine two nine two. It's eighteen past four.
News Talk said b let's welcome back. This is a
(12:23):
weekend collective. I'm Tim Beverage and this hour it's the
one roof radio show. My guest is core Logics head
of Research, Nick good Or. We're talking about is it
ever okay to sell at a loss? But also just
all the scenarios around settling at a loss and when
it's you know, not good, and when it's actually the
right decision regardless of a little bit of pain, and
when in fact, maybe there might not be any pain
because you're buying and selling in the same market and
(12:44):
you're simply just looking for a different house, different location,
maybe a different city. And of course I can hear
Nick probably almost as my gyminy cricket saying, well, if
you're going to move into a different city, it's not
technically the same market, is it, Nick.
Speaker 5 (12:56):
Yeah, fair point, Yeah, we see it quite separately. Good point.
Speaker 2 (12:59):
Yeah, I just thought I mentioned that because town's obviously
Auckland versus and Queenstown versus perhaperhaps so on. No, Hamilton
or christ Church quite different markets to a tapary maybe
quite different as well.
Speaker 4 (13:11):
I know what two.
Speaker 2 (13:12):
Tappre's on my mind. It comes up as my sort
of go to for mentioning a smaller center. But anyway,
let's carry on and take some calls. Gale High Hi there.
Speaker 7 (13:21):
Hi, Hey Nick, Hi, good afternoon. I just got a
quick question because I can't seem to figure out really
what the vibes here is in Hawk's Bay Post cyclone,
you know, with the market not commercial but residential. You know,
from what I read, it's sort of chugging along. But
then I think a lot of people asking unrealistic sort
of twenty twenty one prices still and nothing's moving. I
(13:45):
get that feeling, but that that's probably happening across the
country though, wasn't it you know, unrealistic pricing maybe in
some provinces. I'm not sure, you know, I'm just I
can't understand really what the market's doing here in Hawk's Bay. Okay,
no one tells you the truth, you know.
Speaker 2 (13:58):
Well that's the problem because there there's so many opinions
out there as well. But what it's going to do?
What how does the data tell us data? Sorry?
Speaker 5 (14:08):
No, all good, no good. Thanks for the call, Gale,
And I think it is an interesting one, right, But
I suppose that's where core logic try and get in
there to be you know, independent voice. We're sort of
haven't got a stake in the game. It does depend
on who you talk to as to what sort of
story you might get. But yeah, going back strictly to
the data, our Home Value Index, which measures what values
are doing over time, shows that, say, for Napier, values
(14:29):
are two point seven percent down in the last quarter,
Hastings down zero point nine percent. So we're still seeing
this downturn sort of continue a little bit for parts
of the Hawks Bay region. And then if you look
at where values are now compared to say the peak
of the market, they're still downsort of nineteen to twenty percent,
So I think it just shows that there has been
this significant downturn for the market. But then if you
(14:53):
go and compare to say pre COVID, so compared to
March twenty twenty, values are still ten percent up in
Napier and twenty two percent up in Hastings, So we
have seen still that growth over for a longer period
of time, almost five years now, which is crazy to
think about, but we're still seeing the sort of end
of the downtown. And I think the key thing we're
looking at across the country, as you say it's relatively
(15:14):
consistent across the country, is that we are kind of
getting to some form of inflection point now as interestrates
for sentiment and confidence are starting to improve, but it's
taking some time to work through the system, particularly because
many areas have got large levels of listings on the
market and that's just holding back this growth phase a
little bit more than in what have otherwise seen. And
(15:36):
that's true for Hawks Bay two listenings today compared to
a year ago are still twenty percent more. So it
just means it's still that Blier's market. There's no desperation
and things are going to just slowly turn around.
Speaker 2 (15:48):
So what are the sort of if people It's one
thing to read to read the news and to see
what pundits are saying about the market, But in terms
of reports, if you are interested in a particular market,
what sort of what sort of reports can some one
look for to give them some really good information? Because
while the while past performance doesn't indicate future performance, that
(16:13):
can give you a fair pictures to the momentum of
a market, can't it, Which.
Speaker 5 (16:18):
Helps with right absolutely, I mean that context is really
useful right looking at where things are compared to the past,
what's been happening lately? You know, what are some of
the factors that might influence, like well, how many properties
are listed for sale? That can sort of tell you
where that buyer power might be as well. And our
website we publish all our our pr anything that we
(16:39):
sent to media, off the stuff we're stending to clients,
we publish on our website too. And we also publish
a lot of these value changed so our home value Index.
You can go and download the data yourself from care Logic,
dot Coto and z. We even publish a suburb map
so you can go to care Logic, dot, Cota, and Z.
It's called mapping the market. If you google that, and
you can actually go and see what's happening in your suburbs.
(16:59):
So you can see the median value of your suburb.
You can see the change over one, three and twelve
months for free, and so there's a full map of
the country. You can just zoom to where you want,
click on your suburb and you'll see those figures, and
that can give you a really good feel for not
just how your suburbs doing, but how it might be
performing compared to suburbs around it, and if others are
growing in yours is not, maybe there's some potential chance
(17:20):
for yours to grow in the future, and vice versa,
of course, So I just think, as you say, it's
understand it's good in context of how your area compares
to other areas similar and same thing with how it's
how it's going and compared to recent history or even
longer term history, and a lot of that data is
available well.
Speaker 2 (17:36):
A classic example be literally what the report that's come
out recently talking about how there's still market softening going on,
because if you look at the headlines will always I
mean a good headline is like such and such sold
bought in in nineteen or twenty twenty for such and
such and sold for X. And you know that the
(17:56):
headlines can give you an inflammatory sense of what the
market's doing in either direction to be fair, and so
if you were going to for instance, you were chatting
out Hawks Bay with Gail before, but just having that
sense of where the market is gives you a bit
of a grounding when you go and have a look
at a property, have a chat with the agent who
(18:16):
may look their vested interest is I don't know they
want you to buy, but you know, in terms of
having that grounding, it is pretty it is pretty relevant
what's happening right now, isn't it. And the data that's
you know, the recent data data.
Speaker 5 (18:29):
Yeah, yeah, absolutely no, I think and that's where it is.
That does pay to do your own research, right So, yeah,
you can read a headline, or you can listen to
someone that's in the market, but you really can't be
going and looking yourself, you know, going and watching properties
that are selling, maybe putting your expectation on I expect
this property to sell for eight hundred thousand dollars. Let's
see how the rest of the market views that, and
(18:51):
if it sells for over then you know you're sort
of undervaluing property at that time. If it sells for
under that then or flip side, then you can adjust
your expectations on that property. So maybe if it's for
yours or whether it's for a property you want to
buy in the future as well. So I think you
know there to get an indication. As you said, you know,
not that they're fully sensationalizing, but those those extremity stories
of this person got a bargain or this person did
(19:13):
not so well, they're the ones that are going to
sell and get those headlines. That really pays to dig
into the detail and try and find some independent view
and voices and they'll help you along.
Speaker 2 (19:22):
Excellent, Right, let's take some more course, Andy High Right.
Speaker 4 (19:26):
Yeah, look, it's not actually directly related to but I've
had this bit of information or I've worked you said
about fifteen years ago. First home buyers have to save
months by month, year after year, Okay, Whereas the person
who already has property and wants to increase really goes
(19:52):
and gets evaluation if they had to go through a
savings plan in the same way to actually physically put
the money out of where it is into a savings
account level pl fields, it would slow the investor market
down and help the first term buyers.
Speaker 2 (20:13):
Mind you, it is worth pointing out that that second
home buyer, I guess the investor has gone through that journey,
haven't they.
Speaker 4 (20:20):
Yes, he has, he has, but then he's using capital
games to be able to enable him to rather than
actually put the physical money into the bank on a
month by months or whatever basis.
Speaker 5 (20:36):
Yeah, Nick, Yeah, it's the power of leverage, right, And
that is one thing that property has above many other
investment assets, is that you can leverage against equity that's
growing or that you already have or you've built up
in a property.
Speaker 4 (20:50):
But the level playing field isn't very very fair on
the first term buyer.
Speaker 5 (20:54):
Yeah, it's a fair point, and I'm look, this is
I think this is something that's often being discussed at
government level. You know, how we provide that assistance for
first time buyers because we know it helps people prosper
if they can get into the property market. And there
has been, you know, in the last few years, plenty
of things that have looked at an investor activity. The
really interesting thing when we look at the data, is
that nationwide in October twenty seven point eight percent of
(21:16):
sales with the first time buyers. That's the highest number
on record that we've seen, and it has continually been
growing in the last week while. And so it's what's
been interesting is as this market's been a bit quieter,
and yes it's been relatively higher though of course they
have improved last couple of months, first time buyers have
actually been relatively active. They continue to find a way
they had just expectations they can move further from town,
they can buy that townhouse when of course they want
(21:38):
to buy a big house on a big block of land.
So I think we just tend to find the first
time buyers will find a way. They probably borrow that
money maybe from parents or parents equity to get into
the market. And we do think that one of the
key changes that's going to occur, well it'll start to
have an influence in the next few years, is the
introduction which happened earlier this year, of the debt to
income restrictions. And these debt to income restrictions, while they're
(22:01):
there to protect our financial system, they are going to
have a greater impact on investor activity and how many
investment properties investors can buy and how fast they can
get and can accumulate those properties as these things start
to kick in. So there are some things that have
improved for investors, like reduction of l vrs. You know
you can run off your just costs. Again, the debt
(22:21):
to income restrictions are going to start to impact those
investors in future as well, which you know, as a
balancing act, will start to enable those first time buyers
to remain value to the active as they have done
for most of this year.
Speaker 2 (22:32):
What do you think of that, Andy, the changing rules
on to income for restrictions.
Speaker 4 (22:39):
But it's sure not a level playing field. Yes, I mean,
can you do more emboldened and the girls want to
have a house and they're more fearless, but true ignorance
in terms of the problems and and all that. But
(23:00):
I was only trying to look at a method of
leveling the player.
Speaker 2 (23:05):
I don't know how. I don't know how you would
in a way, because either way, everyone is whoever it is,
whether you're an investor with a bit of equity or
whether you're someone who's got slogged away and saved a
way to get the cash. You are still borrowing a
large amount of money and it's always going to be
related to what you're worth.
Speaker 6 (23:22):
You know.
Speaker 4 (23:22):
But I mean once, as I say, once you get
off the ground and you you paid your first house
then and we caful gains, that's you know, it's a doddle.
Speaker 2 (23:30):
After that, well, well it's a dottle. It's still for
some people don't manage to pull off it. I don't
know if there's anyone around that neck. I mean, it's
an interesting call for many. Thanks for cool mate.
Speaker 5 (23:41):
It's a hard it's a hard and I think because
you know, we can't we can't not have property investors
out there. You know, there are properties that must be
owned by an investor that want to be rented by
tenants who are transient students or other people that don't
want to or are never going to be able to
buy a property. So you need to sort of a
market that functions consistently and wellfare property investment as well.
It can't all be done by the government, so it's
(24:03):
a hard one to get that balance right. There's no doubt.
Speaker 4 (24:05):
You know.
Speaker 5 (24:05):
There are talks of course about capital gains taxes, about
wealth taxes. You know, you could have other wealth wealth
forms of taxing people's equity and a property. These are
all considerations that go on, and as well as things
like the debt to income restrictions, which are actually not
necessarily political. They're done by the Reserve Bank, and so
they're more about the financial system and ensuring that we
(24:26):
don't have too many borrowers, whether it's investors or occupiers
borrowing too much compared to their income or with not
much equity. That could cause a real problem should we
go into a really significant and deep recession. I know
we're sort of in one still at the moment, but
if it's got really bad and much more job losses,
you would see a lot more of a problem for
our financial system, which is not a good thing. So, yeah,
(24:47):
it's a tough balance to get for the financial system
and for politicians.
Speaker 2 (24:50):
Politicians there's a text here here asks where our previous
quarter doesn't use his capital to get his daughter alone. Well,
it can be a complex thing because I guess if
my caller is if you're retirement age and things like
that and you don't really want the risk, I know
that's the thing. Actually, I wonder how many parents do
actually use their capital to get their kids into the market.
Speaker 5 (25:11):
I think we've heard more and more about that. It's
hard to get the hard data on it, but I
think if you talk to brokers as we do, and
we're so we're firmly entrenched in that mortgage learning decision
and we're out there talking about those brokers and bankers
all the time. So then when you talk to them,
and there's no doubt that you know, for many people,
that's the only way they can essentially get that deposit
or get that guarante at the back of being able
to service those mortgages. Maybe that improves as intstrates full.
Speaker 4 (25:34):
But you know, house.
Speaker 5 (25:35):
Prices is still relatively expensive compared to income, so often
you do need some form of assistance, and that's that's
tough because you know, some people just won't have parents
with that ability.
Speaker 2 (25:44):
What does your data tell us about why the market
is softening? Because the the sort of lay person's understanding
is like all money is getting cheaper, market's going to
be taking off soon, But your data is showing that's
still we're pretty soft. What do you know about why?
Speaker 5 (26:01):
I mean, I don't want to oversimplify it, but it
pretty much does come down to a for audibility and
the fact that we've had such strong growth in prices,
you know, as we went through COVID. Yes, prices have
come back in the last sort of couple of years,
but still when you look at house prices compared to income,
it's still really expensive to buy property in New Zealand.
And so while that's starting to change now as interest
(26:22):
rates fall, when people can borrow more money to be
able to keep up with that, it's still quite difficult
for me in many of those people and for those
that already own property, yes, interest rates are falling, but
of course they will fix their mortgage for six, eighteen,
twelve months, whatever it is, so it takes some time
for them to actually realize the benefits of those interstrates
falling too. So it'll take some time for saying unoccupied
(26:42):
moving house to trade up or trade cybers that it
might be. They're not quite as active right now either.
And the other factor I think we should acknowledge is
that that labor market of ours is still very weak.
You know, we're still seeing fewer jobs filled at the moment.
We know, particularly here in Wellington, the government is still
going through a number of cut through that public service.
If you're nervous about your job, you certainly aren't transacting
(27:05):
property market where it's a massive amount of mismanic equity
and value and income required to service those mortgages. So
I think that's just holding some of those buyers back
of there's nervousness about their job.
Speaker 2 (27:17):
What is the vibe in Wellington on two levels? Just
generally given the public services is a large part of
that city and we've seen the adjustment and the job
numbers and all that. That's a euphemism of very used one.
But also the market, what's it doing?
Speaker 5 (27:31):
Yes, still declining, but as most of the rest of
the country and all kind in particular is also quite
similar to that. I think for Wellington, values at the
moment are down one point two percent in the last month,
three percent in the last quarter. Really interesting when you
look at Wellington compared to pre COVID, it's only five
percent higher, So that's almost five years and there's only
(27:52):
five percent higher values, so you know, an average of
one percent growth per year. I don't think many people
would be too happy with that sort of return, and
it just shows how far values have come back down,
which is twenty five percent from that peak. So no
doubt that softness has been very real across the Wellington region.
You know, maybe you'd say that values just got over
inflated now that nervous starts to creep in, and so
(28:13):
we're just not seeing that that that strength come back
through and that well into market stuff.
Speaker 2 (28:18):
Just as context on Wellington. Wasn't Wellington, by my recollection,
one of the bigger jumps when the cheap money came out.
Speaker 5 (28:27):
Yeah it was, but it wasn't the only one there was.
Still there was still plenty that saw strong, strong growth
as well through that period of time. So yeah, that
will different be a influence. I think. You know, in
some parts of Wellington, like Lower Heart where there was
a lot of development going on, I think some people
probably paid for sections that could have two properties on it,
let's say, or be developed, probably overpaid for that because
(28:48):
they saw the potential once it was finished with two properties.
Then once you maybe can't do that, developmental things slow down.
Then you have to sell it. But you're actually selling
it as only a single property or single house. Then
you're starting to you know, you're realizing the full value
of that property either and that sort of shows that
values come back a bit faster in some of those
areas too, So definitely a number of factors there, and
wrap that's certainly one of them. Over to the ament.
Speaker 2 (29:10):
Yeah. Look, actually I've got a few text questions as
and a couple of owner We're going to follow up
with her as well. But if you'd like to ask
Nick Good or any questions or give your take on
selling it a loss and how you cope with it
or whether it's always the catastrophe that it sounds like
in the property market, give us a call one hundred
and eighty ten eighty. It's twenty one minutes to five
news talk z'd be living.
Speaker 6 (29:29):
The good dreams leaving Tennessee you Santa Monica. I swear
it's going we'll meet my mama. God, it's gonna causy scene.
She sees her baby girl and she's gone, swam have
your you're a pink party girl and you dance at
(29:53):
the club, Mama. I'm just having that homicage.
Speaker 2 (29:59):
Generally, it's word and welcome back. This is the weekend
collect If my producer says that there is one for
Shaye to post something to do with pony clubs, I
have no ideas the relevance of it. But anyway, this
is one if radio show talking about the softness in
the market and what's causing it. Is there ever, is
it ever okay to sell it a loss? But also
taking your questions for from core Logics, knic of research,
(30:22):
head of research and at good or goodness me and
all over the place there. Hey, if you texts to
get to Nick first one you mentioned in your example,
say that out of a million dollar house, the loss
is on average across New Zealand not you know, there
are idiosyncrasies and all sorts of markets, but the average
is lost to say, fifty five thousand. Just a question says,
(30:44):
does the loss that you're reporting does that take into
account the selling agent fees which can also be a
significant percentage of that property And they wouldn't.
Speaker 5 (30:53):
Know no, just listening just the selle price to sale price.
So yeah, that's a good point, right, there's way more
fees and things assocaid with selling a property and you've
got no idea what might they might have put into
it in terms of maintenance or improvements. So yeah, it's
literally just the sale price or the purchase price they made,
and in the sale price they took at the end
of it. So yeah, very simple measure, perhaps us to
understand consistency over time, but yeah, there's going to be
(31:14):
those other things to take account of. So you're right,
the loss will actually be greater than that in many cases.
Speaker 2 (31:19):
How much variation is there and the amount of commission
that are being charged by agents around the country.
Speaker 5 (31:25):
Yeah, I don't think there's too much variationally, usually in
that two to three percent mark. There's some that do
fixed fees, and so you know there's going to be
some variability depending on where you are and which which
firm you choose, and certainly which part of the market
you're in. But I think a typical expectation would be
around that two to three percent mark.
Speaker 2 (31:41):
Okay, let's have a lot a few more texts once.
I'm not sure I quite understand this one, but you
might be able to interpret it for me. Gary says
to the capital tax refund will soften the blow of
selling it a loss in the future, thanks labor. Is
that is that based on you may have paid tax
on your profit via the bright line test, then you
(32:05):
can get it back if you've made a loss on
your investment property. But my understanding is that all that
tax is ring fenced.
Speaker 5 (32:11):
So, yeah, it is. It is, So I'm not exactly
I'm not a little bit of a confusion there, I
think as to what that's actually talking about. But yeah,
I think your interpretation sounds about right to me too.
Speaker 2 (32:22):
I think it's about offset. Yeah, basically, you make a profit,
you have a loss, then you offset the tax. But yeah,
I think the bright line test was under the ragimement.
It was ring fence, wasn't it, Unless you're doing something.
Speaker 5 (32:33):
I think there's slightly separate things. But yeah, there's definitely
a ring fencing of tax losses. So you can't write
off your tax loss from a property against your other
taxes from other forms of income. You can't. You couldn't
do that for a long time, so I think that
changed a while ago and it was added separate to
the bright line test. But yeah, certainly means that you
can't be running off your tax costs across different forms
of income anymore, so taking a loss can be balanced
(32:55):
out the other way.
Speaker 2 (32:56):
Do you have a view on whether that's a good
or a bad.
Speaker 5 (32:58):
Thing in terms of ring fixing those losses? Yeah, I
suppose you know. It makes sense to me. I guess,
you know, making sure that you say, if you're going
to invest in something, make sure it's profitable in its
own right, and so you're looking at that as a
single entity as opposed to being able to write it
off against other forms of incomes. I suppose that it
means that you're making a much more stronger and smarter
(33:20):
financial decision to own that property. You know, the rental
income coming in is going to cover the cost of
you owning that, So I guess it makes some practical
sense from that perspective, but I haven't really thought too
much about you know, it doesn't distort the market or
have any major influence outside of that, I wouldn't say,
maybe not too much, because if you can't make it work,
there's a chance that someone else could anyway, And maybe
(33:40):
that's a better system to be setting up so that
you know, those those tenants are getting a landlord that's
much more financially set up to look after that property
and look after those people.
Speaker 2 (33:49):
You were talking as well about the percentage of first
home buyers that are in the market at the moment, Well,
I can't remember the number you mentioned.
Speaker 5 (33:55):
Almost twenty eight percent, So would.
Speaker 2 (33:59):
A change in that number. What sort of change in
that number would indicate the market market is recovering because
investors are getting back on or is that sort of
largely irrelevant.
Speaker 5 (34:12):
No, I think it's a fair point. You probably could
use how active are first home buyers as to what's
going on in the market. It's not like it's been easy, right,
and it's never easy to get your first time so
I don't want to make it out like it is.
What has been interesting is since April we have seen
a continual, gradual lived in mortgaged investors getting into the
market too, coming back into the market. The group that
(34:34):
has been really quiet has actually been those owner occupiers
moving house and our sort of interpretation of that is
those are probably the people that are feeling nervous about
their job and if you've got a house, just worry
about paying that off rather than thinking about moving up
in the world. So, you know, at the moment, first
time buyers and investors have been increasing their share of sales,
and you know that's not reflecting anything else in the
(34:56):
market except for the fact that movers aren't really as
active as investors.
Speaker 2 (35:00):
You say first home buyers and first time investors, did
you say.
Speaker 5 (35:03):
Well, we're just all investors, just all investors. Yeah, So
I think they're both seeing share of their sales increase.
It's the movers that are slowing down. As investors continue
to find value in this market because the gust rates
are falling, so that yield is going to start to
improve for them. That could start to slow those first
time buyers down. They're going to see a bit more
competition in some parts of the country. Some parts of
(35:25):
the market they do compete. First time buyer properties are
similar to what investor might buy, but they don't always
cross over either. So it's not always a case just
going investors are increasing that must be negatively affecting first
time buyers. So we need to tighten some sort of
rule up or chain some rules to rebalance that. It's
not always the case. And as I said, first time
buyers for the twenty odd years, we've got a series
(35:47):
of their activity. They always find a way, you know,
whether it's just to adjust expectations or move somewhere else,
that's kind of the way they get into that market.
Speaker 2 (35:56):
Do you see the soft market continuing for a while?
Speaker 5 (35:59):
Not for too much longer. I think, you know, we've
already seen some parts see some form of growth. It's
pretty gradual of the stage in some parts of the country,
but certainly there's been some areas that are showing some growth.
So I think we're seeing it a little bit. You know,
there is that lift and confidence, that lift and sentiment
across the country and that's going to feed through to
some growing property values. But now we're getting close to Christmas,
(36:23):
I think we're not going to see any material growth
and property values. Maybe to we come back from that
Christmas break, people have got more certainty in their job.
Interest rates have fallen, We've probably got a great expectation
about you know what's next with interest rates, especially after
we here from the Reserve Bank and you know what's
about eleven days? I think it is when instead of
twenty seventh of November, that's going to be a really
interesting one. They will give us the updated forecasts of
(36:45):
the official cash rate and so that'll give a really
good feel for what's next and the market will definitely
be impacted by that.
Speaker 2 (36:51):
Do they actually make any change on the in eleven
days time or is it just saying what might be
happening and what No?
Speaker 5 (36:58):
Yeh official cash rate decision yep. And we're expecting a
fifty basis point four to that. So take the official
cash rate from four point seventy five to four point
two five percent. There's a chance that's seventy five, maybe
a chance it's twenty five, but most seem to be
stuck on that fifty. But it's been pretty well signposted too,
so you might not see mortgagees traits change too much
off the back of that.
Speaker 2 (37:17):
Won't be one, then, won't be one hundred.
Speaker 5 (37:19):
I can't see it being one hundred. I'd be surprised
if it's seventy five too. We're only seeing falls of
seventy five basis point four a couple of times before
Global Financial Crisis and COVID and those you'd call those
emergency situations, right, no one really knew what to expect.
This is not an emergency. Not saying it's great right
now with our economy struggling and unemployment rising, but it's
not really an emergency. So I can see the Reserve
(37:40):
Bank just just taking that standard fifty everyone expects it.
Don't need to shock the market, and then wait un
till they come back in February to see what happens next.
Speaker 2 (37:48):
Stead is she goes sort of. Yeah, anyway, it probably
feels like a huge jump for Adrian orbit. We'll waiting
see what happens. Look, we'll be back in just a moment.
The one re propably the week, it's ten minutes to
five News Talks. He'd be Y's welcome back to the
Weekend Collective. This is the one roof radio show. By
the way, if you missed any of the discussions we have,
we had a fantastic panel a shamed to play Mark
kras as well. You can check it out wherever you
podcasts iHeartRadio, look for the Weekend Collective. But right now
(38:10):
it is six and a half minutes to five.
Speaker 1 (38:14):
The one roof propity of the week on the Weekend Collective.
Speaker 2 (38:18):
Now, the one roof property of the week is as
I say, almost every week, almost not last week, but
this week it's like taking a little holiday. You go
a bit of a nosey through some spectacular homes. This one,
I'm just going to tell you it's ten million bucks. Okay,
it's an advertisement. I would say for the architects. It
is thirty Rawennie Rawennie r Awe and e Avenue in
(38:41):
Westmea Auckland. You can check it out on the one
roof website. It's estimated about nine point six four million
low nine million high ten. Of course, you know we're
just talking millions. It's no big deal. But it's an
n z IA Award winning home by Stevens Laws and Architects.
It resonates with a soulful atmosphere. This is the blurb
from the real estate agents ever focused on the harbor.
(39:03):
It's waterfront property. It's got a soothing karma. It's got
a soothing vibe to it, and I guess you can't
really argue with that convenience city location, of course, because
it's in West May, not too far from the city center.
It's got gorgeous flying look. I'm not going to continue
reading the blurb it's got but it's got cathedral like
ceilings and it is one of those properties. Funny enough,
(39:24):
I think if you were in the money and looking
for I think choosing an architect sometimes is the biggest
thing if you've got the cash to really build something beautiful,
and I would say that this home is I'd be
wanting to knock on the doors of these architects because
it's got what do you reckon? Nit good. All it's
pretty pretty flash as amazing.
Speaker 5 (39:42):
It's pretty much everything you'd look through and go if
I had a dream home, what's it going to look like?
This time's pretty much got it all, you know, the
little pool, but also being right there on the water,
the size, the beauty, just everything everything you'd made. It's
pretty pretty special.
Speaker 2 (39:56):
Yeah, what are the photos that you look for if
you're scanning through a house. What's the one that grabs
you and you go, oh, I want it?
Speaker 5 (40:04):
I think the colors, right, like, I think you can
go through these and you see it's kind of got
its own green coming through parts of the lawn as well.
Obviously the view and where it's located a big part
of that. And then I think you can just tell
the quality of some of those furnishings and the rooms
have just been immaculately designed as well. So I mean, yeah,
that's a pretty special one for me. But I think
living spaces, especially that outdoor area, that's the one that
(40:27):
grabs me a lot.
Speaker 2 (40:28):
Yeah for me, Actually, I don't know why. I do
go to the kitchen and I like a nice tiled bathroom,
but it's the outdoor living. It's absolutely stunning. But if
you want to have a look at it. It's thirty
Rawini Avenue and as I say, it's attestment to an
amazing job by the architects. Just a gorgeous property. Hey neck,
we've got about twenty seconds to go, but what's your
next body of work you're slogging away at.
Speaker 5 (40:50):
We'll have our monthly chart pack out this week, well
next week, I suppose it is. And that really is
just our full overview of what's having in the market.
We'll even publish some of that first time buyer data.
There'll be listenings information in there, yield information for investors
as well as that value.
Speaker 2 (41:05):
So excellent you there and you can go to core
Logic dot cutter and said Nick good all. Thanks so much, mate,
really appreciate it. We'll be back with the parents squad.
Sarah Chatwin is next. Sarah, Sorry, thanks so
Speaker 1 (41:16):
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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