One investment expert says New Zealand would be a lot better off if people sold off their property investments and put money into assets that helped boost the economy.
Jeremy Williamson, head of private wealth and markets at Craigs Investment Partners, recently claimed the time has come for the nation to move away from its 'love affair with property'.
He joined the Afternoons team to discuss further.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks Be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Do we need to break our lover fear with property?
Jeremy Williamson here to Private Wealth and Markets at Craig's
Investment Partners reacons we should be investing in assets that
actually grow the economy, and he joins us now afternoon, Jeremy, Hey, guys, Hey, Jeremy, why.
Speaker 3 (00:31):
Do key we still love property so much even when
the returns aren't what they used to be.
Speaker 4 (00:38):
I keep asking myself the same. Look. I think there's
a couple of parts to it, guys.
Speaker 5 (00:44):
I think kiwi's they love what they can see and
tangible assets, and we look, we all know that we
can touch an investment property it stands, it's relatively transparent
in terms of how it's valued.
Speaker 4 (01:00):
And I think the other thing is access to borrowing.
Speaker 5 (01:04):
So it's very hard for a lot of a lot
of kiwis to get access to borrowing, and mortgaging the
houses is a way to do it. And maybe if
we go back a few decades, back to the back
into the eighties, there for a lot of for a
lot of older kiwis there was a difficult period in
the ship market around the eighty seven crash, So I
(01:26):
think it's a whole lot of that stuff that has
affected the national psyche. And I think it's time to
have a conversation around around well, what can we do
for the betterment of Kiwis and the next generation? And
I think our disposition towards property investment's got a part
to play.
Speaker 3 (01:44):
Are you talking about second properties and investment properties? Because
of course your first house has more than a financial investment,
and it's an emotional investment. It's a piece of the country.
It's it's you know, something solid. It's the ability to,
I don't know, knock out a wall with a sledd
chamber if you if you want to. So are you
(02:05):
talking about moving that investment away from you know, from
when as a financial investment? Or do you think people
should give up on the family home in the first place.
Speaker 5 (02:15):
No, I'm in the ladder camp, and you know, for
a lot of Kiwis, the family home sacrisanct and you
know we all feel like that, don't we. It's more
the second and third and fourth homes, the investment properties,
all that stuff. I think it's time to have a
conversation nationally around what is that actually doing? And I
(02:37):
think of you know, when your kids playing past the
parcel and trading and buying and selling investment.
Speaker 4 (02:43):
Properties to each other.
Speaker 5 (02:44):
Feels a bit like that to me, where you know,
you take a twenty dollar notes, you pass it around
the circle, it still comes back as a twenty dollar note,
doesn't it. I feel like the love affair we have
with investment property has the same sort of thing to it.
Speaker 2 (03:00):
A lot of people will be hearing that, Jeremy and
thinking it's quite altruistic a statement from yourself that we
do what's good for the country than ourselves. And I
think what you say is a lot of logic to it.
But you get what I'm saying. A lot of people
are their their primary focus is what is going to
build wealth for them and their family and hopefully something
to hand down to their kids and for them, property
(03:20):
still feels like the way to go.
Speaker 5 (03:23):
Yeah, and I can understand that. I mean, that's that's
that's an equally valid view as well. I guess I'll
take it up a few levels, and you think of
it from a national point of view, if we were
to if we were to have a national conversation and
move just the dial slightly.
Speaker 4 (03:39):
I mean, I'm not sitting here saying let's all get
out of property.
Speaker 5 (03:42):
It's not where I'm coming from. Where I'm coming from.
If we move the dial slightly and put a bit
more of that investment property capital into productive assets, grow
the economy, grow productivity, create more jobs for the next
generation of kids coming along, and take a bit of
heat out of property prices generally. Because I think inequality
(04:05):
is a bit of a conversation we're having national at
the moment, and over allocating to property as a country,
I think it has a part to play in equality
as well.
Speaker 3 (04:17):
So how much we're talking how much of a dial
shift do you think would make a material difference to
to our economy.
Speaker 4 (04:24):
Oh look, I want to crunch the numbers in my
own head. But if I was to have a stab at.
Speaker 5 (04:28):
It and put me on this rightly, roughly roughly, Look,
I won't put my life on it, But what I'll
say is I'm talking a couple of percentage points, you know,
up to maybe two, three, four, five percent would make
a huge difference. You know, we think about our investment
and housing generally, and investment properties and New Zealand residentially.
(04:49):
I think the number is something like one point six
one point seven trillion. So that's a big number. And
if you break it down into a little bite sized pieces,
a few percentage points could make a big difference in
terms of that capital going into this productive assets. So yeah,
I'm certainly not sitting here saying let's let's run for
the hills from proper. I just think that's that the
(05:10):
conversation is starting to shift around how we turn the
dial just a little bit.
Speaker 3 (05:14):
You kind of touch this on this before, but as
this text, a bend says, you can't borrow five hundred
k and buy shares and make four to six on
that five hundred k. If you went into a band
and see ed, look I've got this portfolio I want
to buy. Can you can you give me a mortgage?
They're probably going to say get out, aren't they?
Speaker 4 (05:32):
Yeah, they are. But I think it goes back to
the earlier point, doesn't it.
Speaker 5 (05:35):
I mean the family house being sacrosanct to New Zealanders
and maintaining that culture and getting access towards towards some
borrowings that way, to whether they have that personal decision
to put some of that borrowing into other asset classes.
But you know, my conversation, what I'm thinking about is
more around that second second third and those sort of
(05:57):
investment properties. But yeah, there's no doubt that the family
home sacrisanct creates memories. It's a place for the family
to be and also can can help with some access
toge We're.
Speaker 3 (06:09):
Talking to Jeremy Williamson, head of Private Wealth and Markets
at Craig's Investment Partners. Now, you mentioned the eighty seven crash,
and we all know that the country went crazy for
stocks after the Longe government came in eighty four. There
was this huge boon and then a lot of people
got burned, and it felt like there was a cultural
fear that spread through the nation against the shear market,
(06:30):
and that was pointed out as a moment when people
moved heavily into property because they thought it was less riskier.
How fair is that view now that property is less
risky than a second property is less risky than the
shear market, for example.
Speaker 5 (06:45):
Yeah, Well, I guess for how I look at that
is to sort of look at it the other way.
And back in the eighties, the share market was dominated
by investment companies.
Speaker 4 (06:54):
The companies set up to invest in.
Speaker 5 (06:56):
Small pieces of other companies that would invest in small
pieces of other companies. So it was it felt like
a little bit of a house of cards. I contrast
it today. You look at listed the listed market here
in New Zealand. It's full of productive companies that actually
do things. They export, they create, create create jobs, they
(07:19):
pay their taxes and they're doing great for New Zealand.
I think of the companies like Fisher and Pigirl Healthcare.
So I think it's changed. I think it's changed dramatically,
but you know, I appreciate there'll be some around that go.
Speaker 4 (07:32):
You know, I had that bad, bad.
Speaker 5 (07:33):
Experience in the eighties and and bricks and mortar feels
safer to make.
Speaker 3 (07:38):
So if that's the case, do you reckon that the
tax system needs sort of a shake up to get
people looking beyond property if people are still nervous and
as you say, it's good for the company if we
start investing in and things that employee people, and you know,
in New Zealand companies. Do you think that that a
(07:58):
change to the tax system could could Yeah.
Speaker 4 (08:00):
It could do.
Speaker 5 (08:01):
I mean, I think it's worth thinking about isn't it.
And generally what you what you find with the taxation
system in life generally is that you know, incentives to
get into into things that are good for good for
the economy.
Speaker 4 (08:14):
Tend to work.
Speaker 5 (08:16):
You know, I'm known tax tax expert and not a
favor with all the tax settings of course, but I
think it's it's a good time to think about all
that sort of stuff.
Speaker 3 (08:25):
And we hear that young people are locked out of
the property market, So are they just naturally moving away
from property? Will this just just change over time as
it becomes impossible for young people to get into property.
So they're like, now I'll have it all at bitcoin.
Speaker 5 (08:41):
Yeah, it's a question I'll get us all the time.
When you look at offshore, I mean we've been a
property ownership for our primary domicile. Owning that prominent primary
domicile has been an important part of keepa culture you
know offshore. You know, in the European some of the
European countries, you know, renting is something that is far
(09:02):
more normal with a higher prevalence rate, So you know,
maybe it goes that way.
Speaker 4 (09:07):
You know what what we.
Speaker 5 (09:07):
See a are now our business at at Craigs there's
a lot of young people getting into the share market
and that's exciting and good luck to them.
Speaker 2 (09:17):
Jeremy, it's been great chatting with you. It's an interesting
discussion and we're looking forward to see what our talkback
callers have got to say.
Speaker 4 (09:23):
But thank you very much for your time, pleasure, thanks
for having me.
Speaker 2 (09:26):
That is Jeremy Williamson, the head of Private Wealth and
Markets at Craig's Investment Partners.
Speaker 1 (09:30):
For more from News Talks at B listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
You're listening to a podcast from News Talks Be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Do we need to break our lover fear with property?
Jeremy Williamson here to Private Wealth and Markets at Craig's
Investment Partners reacons we should be investing in assets that
actually grow the economy, and he joins us now afternoon, Jeremy, Hey, guys, Hey, Jeremy, why.
Speaker 3 (00:31):
Do key we still love property so much even when
the returns aren't what they used to be.
Speaker 4 (00:38):
I keep asking myself the same. Look. I think there's
a couple of parts to it, guys.
Speaker 5 (00:44):
I think kiwi's they love what they can see and
tangible assets, and we look, we all know that we
can touch an investment property it stands, it's relatively transparent
in terms of how it's valued.
Speaker 4 (01:00):
And I think the other thing is access to borrowing.
Speaker 5 (01:04):
So it's very hard for a lot of a lot
of kiwis to get access to borrowing, and mortgaging the
houses is a way to do it. And maybe if
we go back a few decades, back to the back
into the eighties, there for a lot of for a
lot of older kiwis there was a difficult period in
the ship market around the eighty seven crash, So I
(01:26):
think it's a whole lot of that stuff that has
affected the national psyche. And I think it's time to
have a conversation around around well, what can we do
for the betterment of Kiwis and the next generation? And
I think our disposition towards property investment's got a part
to play.
Speaker 3 (01:44):
Are you talking about second properties and investment properties? Because
of course your first house has more than a financial investment,
and it's an emotional investment. It's a piece of the country.
It's it's you know, something solid. It's the ability to,
I don't know, knock out a wall with a sledd
chamber if you if you want to. So are you
(02:05):
talking about moving that investment away from you know, from
when as a financial investment? Or do you think people
should give up on the family home in the first place.
Speaker 5 (02:15):
No, I'm in the ladder camp, and you know, for
a lot of Kiwis, the family home sacrisanct and you
know we all feel like that, don't we. It's more
the second and third and fourth homes, the investment properties,
all that stuff. I think it's time to have a
conversation nationally around what is that actually doing? And I
(02:37):
think of you know, when your kids playing past the
parcel and trading and buying and selling investment.
Speaker 4 (02:43):
Properties to each other.
Speaker 5 (02:44):
Feels a bit like that to me, where you know,
you take a twenty dollar notes, you pass it around
the circle, it still comes back as a twenty dollar note,
doesn't it. I feel like the love affair we have
with investment property has the same sort of thing to it.
Speaker 2 (03:00):
A lot of people will be hearing that, Jeremy and
thinking it's quite altruistic a statement from yourself that we
do what's good for the country than ourselves. And I
think what you say is a lot of logic to it.
But you get what I'm saying. A lot of people
are their their primary focus is what is going to
build wealth for them and their family and hopefully something
to hand down to their kids and for them, property
(03:20):
still feels like the way to go.
Speaker 5 (03:23):
Yeah, and I can understand that. I mean, that's that's
that's an equally valid view as well. I guess I'll
take it up a few levels, and you think of
it from a national point of view, if we were
to if we were to have a national conversation and
move just the dial slightly.
Speaker 4 (03:39):
I mean, I'm not sitting here saying let's all get
out of property.
Speaker 5 (03:42):
It's not where I'm coming from. Where I'm coming from.
If we move the dial slightly and put a bit
more of that investment property capital into productive assets, grow
the economy, grow productivity, create more jobs for the next
generation of kids coming along, and take a bit of
heat out of property prices generally. Because I think inequality
(04:05):
is a bit of a conversation we're having national at
the moment, and over allocating to property as a country,
I think it has a part to play in equality
as well.
Speaker 3 (04:17):
So how much we're talking how much of a dial
shift do you think would make a material difference to
to our economy.
Speaker 4 (04:24):
Oh look, I want to crunch the numbers in my
own head. But if I was to have a stab at.
Speaker 5 (04:28):
It and put me on this rightly, roughly roughly, Look,
I won't put my life on it, But what I'll
say is I'm talking a couple of percentage points, you know,
up to maybe two, three, four, five percent would make
a huge difference. You know, we think about our investment
and housing generally, and investment properties and New Zealand residentially.
(04:49):
I think the number is something like one point six
one point seven trillion. So that's a big number. And
if you break it down into a little bite sized pieces,
a few percentage points could make a big difference in
terms of that capital going into this productive assets. So yeah,
I'm certainly not sitting here saying let's let's run for
the hills from proper. I just think that's that the
(05:10):
conversation is starting to shift around how we turn the
dial just a little bit.
Speaker 3 (05:14):
You kind of touch this on this before, but as
this text, a bend says, you can't borrow five hundred
k and buy shares and make four to six on
that five hundred k. If you went into a band
and see ed, look I've got this portfolio I want
to buy. Can you can you give me a mortgage?
They're probably going to say get out, aren't they?
Speaker 4 (05:32):
Yeah, they are. But I think it goes back to
the earlier point, doesn't it.
Speaker 5 (05:35):
I mean the family house being sacrosanct to New Zealanders
and maintaining that culture and getting access towards towards some
borrowings that way, to whether they have that personal decision
to put some of that borrowing into other asset classes.
But you know, my conversation, what I'm thinking about is
more around that second second third and those sort of
(05:57):
investment properties. But yeah, there's no doubt that the family
home sacrisanct creates memories. It's a place for the family
to be and also can can help with some access
toge We're.
Speaker 3 (06:09):
Talking to Jeremy Williamson, head of Private Wealth and Markets
at Craig's Investment Partners. Now, you mentioned the eighty seven crash,
and we all know that the country went crazy for
stocks after the Longe government came in eighty four. There
was this huge boon and then a lot of people
got burned, and it felt like there was a cultural
fear that spread through the nation against the shear market,
(06:30):
and that was pointed out as a moment when people
moved heavily into property because they thought it was less riskier.
How fair is that view now that property is less
risky than a second property is less risky than the
shear market, for example.
Speaker 5 (06:45):
Yeah, Well, I guess for how I look at that
is to sort of look at it the other way.
And back in the eighties, the share market was dominated
by investment companies.
Speaker 4 (06:54):
The companies set up to invest in.
Speaker 5 (06:56):
Small pieces of other companies that would invest in small
pieces of other companies. So it was it felt like
a little bit of a house of cards. I contrast
it today. You look at listed the listed market here
in New Zealand. It's full of productive companies that actually
do things. They export, they create, create create jobs, they
(07:19):
pay their taxes and they're doing great for New Zealand.
I think of the companies like Fisher and Pigirl Healthcare.
So I think it's changed. I think it's changed dramatically,
but you know, I appreciate there'll be some around that go.
Speaker 4 (07:32):
You know, I had that bad, bad.
Speaker 5 (07:33):
Experience in the eighties and and bricks and mortar feels
safer to make.
Speaker 3 (07:38):
So if that's the case, do you reckon that the
tax system needs sort of a shake up to get
people looking beyond property if people are still nervous and
as you say, it's good for the company if we
start investing in and things that employee people, and you know,
in New Zealand companies. Do you think that that a
(07:58):
change to the tax system could could Yeah.
Speaker 4 (08:00):
It could do.
Speaker 5 (08:01):
I mean, I think it's worth thinking about isn't it.
And generally what you what you find with the taxation
system in life generally is that you know, incentives to
get into into things that are good for good for
the economy.
Speaker 4 (08:14):
Tend to work.
Speaker 5 (08:16):
You know, I'm known tax tax expert and not a
favor with all the tax settings of course, but I
think it's it's a good time to think about all
that sort of stuff.
Speaker 3 (08:25):
And we hear that young people are locked out of
the property market, So are they just naturally moving away
from property? Will this just just change over time as
it becomes impossible for young people to get into property.
So they're like, now I'll have it all at bitcoin.
Speaker 5 (08:41):
Yeah, it's a question I'll get us all the time.
When you look at offshore, I mean we've been a
property ownership for our primary domicile. Owning that prominent primary
domicile has been an important part of keepa culture you
know offshore. You know, in the European some of the
European countries, you know, renting is something that is far
(09:02):
more normal with a higher prevalence rate, So you know,
maybe it goes that way.
Speaker 4 (09:07):
You know what what we.
Speaker 5 (09:07):
See a are now our business at at Craigs there's
a lot of young people getting into the share market
and that's exciting and good luck to them.
Speaker 2 (09:17):
Jeremy, it's been great chatting with you. It's an interesting
discussion and we're looking forward to see what our talkback
callers have got to say.
Speaker 4 (09:23):
But thank you very much for your time, pleasure, thanks
for having me.
Speaker 2 (09:26):
That is Jeremy Williamson, the head of Private Wealth and
Markets at Craig's Investment Partners.
Speaker 1 (09:30):
For more from News Talks at B listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
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