1 00:00:00,080 --> 00:00:03,200 Speaker 1: Housing update new QB data this morning, average values dipping 2 00:00:03,240 --> 00:00:05,720 Speaker 1: a half percent over the last three months to July. 3 00:00:05,840 --> 00:00:09,120 Speaker 1: Auckland down one point two, Queenstown though up two point four. 4 00:00:09,160 --> 00:00:11,240 Speaker 1: Come on and end of a car Girl up one 5 00:00:11,240 --> 00:00:13,319 Speaker 1: point two. Key here is the average price is down 6 00:00:13,400 --> 00:00:15,800 Speaker 1: thirteen percent on the COVID peak of twenty twenty one. 7 00:00:15,840 --> 00:00:18,640 Speaker 1: Brad Olsen, principal economist. Of course, that to infometrics and. 8 00:00:18,760 --> 00:00:21,000 Speaker 2: Is with us Brad morning, good morning. 9 00:00:21,079 --> 00:00:24,119 Speaker 1: You crunch down through the building boom, the consents that 10 00:00:24,160 --> 00:00:25,840 Speaker 1: we had a couple of years back in all the 11 00:00:25,880 --> 00:00:30,400 Speaker 1: houses on the market now versus the mood of the nation. 12 00:00:30,640 --> 00:00:33,440 Speaker 1: Do we know what's driving what's going on currently? 13 00:00:34,720 --> 00:00:37,120 Speaker 2: I think there's a few factors coming through, Mike. I mean, 14 00:00:37,159 --> 00:00:39,520 Speaker 2: obviously there's a lot of people that have still got 15 00:00:39,560 --> 00:00:42,600 Speaker 2: their houses on the market that haven't yet sold. Is 16 00:00:42,600 --> 00:00:45,120 Speaker 2: about half a year's worth of sales sort of currently 17 00:00:45,159 --> 00:00:47,960 Speaker 2: sitting out there, So a lot of supply. You know, 18 00:00:48,040 --> 00:00:50,640 Speaker 2: some people obviously not keen or not able to pay 19 00:00:50,640 --> 00:00:53,400 Speaker 2: the mortgage quite as much, or moving around for a 20 00:00:53,479 --> 00:00:56,520 Speaker 2: variety of other factors. The real challenge at the moment 21 00:00:56,560 --> 00:00:59,120 Speaker 2: is that there just aren't as many buyers out there. 22 00:00:59,320 --> 00:01:03,000 Speaker 2: People got hit earlier this year when their deposits you 23 00:01:03,040 --> 00:01:05,200 Speaker 2: know that were in their Kiwi savers or in their 24 00:01:05,240 --> 00:01:09,200 Speaker 2: Chares's account and similar to a dip from the market disruptions. 25 00:01:09,480 --> 00:01:11,800 Speaker 2: At the same time, of course, everyone's worried about their 26 00:01:11,880 --> 00:01:14,759 Speaker 2: job and employment, so people not going out and buying 27 00:01:14,800 --> 00:01:17,400 Speaker 2: at quite the same level as before. That means that 28 00:01:17,440 --> 00:01:20,040 Speaker 2: with a lot more supply not quite as much demand, 29 00:01:20,120 --> 00:01:22,320 Speaker 2: those prices continue to come under pressure. 30 00:01:22,520 --> 00:01:25,559 Speaker 1: Do you believe the interest rate argument? As they come down, 31 00:01:25,640 --> 00:01:28,240 Speaker 1: continue to come down. A and Z moved yesterday. I'm 32 00:01:28,240 --> 00:01:31,520 Speaker 1: assuming the others will move shortly. RB moves next week. 33 00:01:31,760 --> 00:01:33,280 Speaker 1: This is the fizz we need. 34 00:01:34,480 --> 00:01:36,640 Speaker 2: Well, I think you'll see movement to a degree, I'm 35 00:01:36,640 --> 00:01:40,240 Speaker 2: not convinced it's necessarily the fizz we need. From two 36 00:01:40,280 --> 00:01:43,560 Speaker 2: points of view, One, I'd be worried if New Zealand's 37 00:01:43,560 --> 00:01:46,200 Speaker 2: economy really was it was the only thing that could 38 00:01:46,240 --> 00:01:49,120 Speaker 2: move us was getting the housing market cranking again and 39 00:01:49,160 --> 00:01:52,040 Speaker 2: locking people out of houses in the future. But two, 40 00:01:52,240 --> 00:01:54,880 Speaker 2: and probably more importantly, how much of an interest rate 41 00:01:54,960 --> 00:01:58,000 Speaker 2: decrease you have you already seen in the economy and 42 00:01:58,040 --> 00:02:01,720 Speaker 2: there hasn't really been any response. Yes, lower interest rates 43 00:02:01,760 --> 00:02:04,320 Speaker 2: I think will support a few more people, will support 44 00:02:04,360 --> 00:02:06,480 Speaker 2: a bit more lending. But I really don't see the 45 00:02:06,520 --> 00:02:10,040 Speaker 2: conditions for house prices to just zoom away going forward. 46 00:02:10,160 --> 00:02:12,760 Speaker 2: And I actually think that's probably a good, painful but 47 00:02:12,880 --> 00:02:14,720 Speaker 2: good lesson for the New Zealand economy. 48 00:02:14,760 --> 00:02:17,280 Speaker 1: I assume you read Kelly Echold's piece yesterday as I did. 49 00:02:17,320 --> 00:02:20,440 Speaker 1: He's bullish on housing next year. What's he see what's 50 00:02:20,440 --> 00:02:20,960 Speaker 1: happening there? 51 00:02:21,040 --> 00:02:24,640 Speaker 2: Well, I mean that's probably where Kelly and I diverge 52 00:02:24,680 --> 00:02:26,760 Speaker 2: a little bit, because I see the likes of that 53 00:02:26,880 --> 00:02:29,360 Speaker 2: highest supply that you've already got of existing homes on 54 00:02:29,400 --> 00:02:31,679 Speaker 2: the market, the fact that you've also got a whole 55 00:02:31,680 --> 00:02:33,600 Speaker 2: lot of those new builds from the last couple of 56 00:02:33,639 --> 00:02:36,080 Speaker 2: years they are only at the moment hitting the market. 57 00:02:36,240 --> 00:02:39,000 Speaker 2: But probably most importantly, the big sort of question, and 58 00:02:39,320 --> 00:02:40,960 Speaker 2: this is where, again you know that there's a lot 59 00:02:41,000 --> 00:02:44,080 Speaker 2: of economist views out there is migration. How many people 60 00:02:44,120 --> 00:02:46,200 Speaker 2: are we going to be having coming into the country. 61 00:02:46,360 --> 00:02:49,360 Speaker 2: What sort of population population growth have we got? Because 62 00:02:49,600 --> 00:02:52,239 Speaker 2: if that population growth does pick up, then yes, there's 63 00:02:52,280 --> 00:02:55,200 Speaker 2: probably a bit more housing activity and higher house prices. 64 00:02:55,280 --> 00:02:58,080 Speaker 2: If it doesn't, you don't have that high level of demand. 65 00:02:58,160 --> 00:03:01,720 Speaker 2: You might well have the slowest population growth effectively since 66 00:03:01,760 --> 00:03:04,560 Speaker 2: before since the early sort of twenty tens GFC sort 67 00:03:04,560 --> 00:03:06,880 Speaker 2: of period. If that's the case, I just don't see 68 00:03:06,880 --> 00:03:09,359 Speaker 2: the conditions for housing to g up quite as much. 69 00:03:09,480 --> 00:03:10,799 Speaker 1: You're a good bloke. Always good to have you on 70 00:03:10,800 --> 00:03:13,639 Speaker 1: the program, Brad Olson, the Infimetrics principal economists. 71 00:03:13,639 --> 00:03:16,560 Speaker 2: For more from the Mic Asking Breakfast, listen live to 72 00:03:16,639 --> 00:03:19,720 Speaker 2: news talks that'd be from six am weekdays, or follow 73 00:03:19,760 --> 00:03:21,280 Speaker 2: the podcast on iHeartRadio.