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Speaker 1: Another piece in the economic recovery mix gets added this

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Speaker 1: Friday morning with new data on housing. So the confidence

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Speaker 1: survey from the ASP, it is up thirty percent. Now

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Speaker 1: expect prices to rise over the next year. The last

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Speaker 1: quarter it was just seventeen so you can see the optimism.

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Speaker 1: They're twenty seven percent, so now it's a good time

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Speaker 1: to buy. That's well above the long term average. Nick

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Speaker 1: Touughley is of course, ASP's chief economist, is back with us. Nick,

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Speaker 1: good morning to you.

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Speaker 2: Good morning.

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Speaker 1: Do we have a nice mix at the moment. Good

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Speaker 1: expectations on prices, that's positive, also good choice. I'm assuming

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Speaker 1: we're still calling it a buyer's market.

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Speaker 2: It's definitely a buyer's market. So you've got a lot

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Speaker 2: of supply on the market. Prices aren't actually really moving

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Speaker 2: anywhere in most parts of the country at the moment.

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Speaker 2: And interest rates, you know that whilst you have seen

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Speaker 2: some creeping up, you know, the debt servicing rates, that

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Speaker 2: bank supply it still very very light. So that affordability

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Speaker 2: factor it's really good too.

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Speaker 1: Yeah, let me go to that long term money which

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Speaker 1: is started to drop off again this week. What's driving

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Speaker 1: that and is that a thing well.

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Speaker 2: I think we've just seen a slight adjustment in the

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Speaker 2: market expectations over how quickly the Reserve Bank will lift

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Speaker 2: interest rates here. But let's also just bear in mindeds

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Speaker 2: a look that the direction is going to be up

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Speaker 2: over time, and you are seeing that being reflected in

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Speaker 2: the fact that those longer term rates are still a

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Speaker 2: lot higher than the shorter term rates, which is still

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Speaker 2: pretty low around four and a half percent.

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Speaker 1: What sort of waiting do you give the psychology of this?

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Speaker 1: In other words, I'm sitting here thinking about the housing market.

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Speaker 1: Our rates going up this year? Are they not? I'm

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Speaker 1: not sure. If they do, do I freak out? I mean,

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Speaker 1: how important does that bit?

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Speaker 2: Well, we do see the survey as giving a sort

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Speaker 2: of pretty good insight into what people are thinking at

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Speaker 2: the moment. And look, two things I call out with

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Speaker 2: the survey is that there's been a massive shift in

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Speaker 2: people's expectations where interest rates are going to go. So

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Speaker 2: instead of like pretty much half of the people's surveyed

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Speaker 2: thinking mortgage rates will drop over the next year, now

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Speaker 2: that's really pulled back a long way, and I've had

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Speaker 2: quite a lift in people thinking rates will will go up.

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Speaker 2: But despite that, you've actually seen house price expectations edge

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Speaker 2: up for they're in that sort of across the board.

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Speaker 2: Pet's quite well founded in parts of the South Island.

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Speaker 2: Perhaps a little bit of over optimism in the North Island.

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Speaker 2: We do think that the price movement itself will be

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Speaker 2: up a little bit this year. But I'm still going

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Speaker 2: to be h.

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Speaker 1: Well, see, that's the interesting thing about the thirty percent.

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Speaker 1: Why isn't that ninety percent? Because I had no doubt

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Speaker 1: in my mind that prices will rise. I mean, you

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Speaker 1: can argue about how much, but there's no doubt in

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Speaker 1: my mind prices will rise. Is there some question mark

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Speaker 1: around that?

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Speaker 2: Well, when we look at that, look the net balance,

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Speaker 2: where you've still got, you know, the larger proportion of

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Speaker 2: people being survey thinking prices will go up. Look at

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Speaker 2: about thirty that it's above the long run average, which

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Speaker 2: was closer to about a net twenty five percent. So

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Speaker 2: it's pretty much people are saying we're expecting a fairly

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Speaker 2: normal rate of appreciation at the moment. So it's not

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Speaker 2: too bad a result. I just think in terms of

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Speaker 2: what the interest rate expectations that it was quite quite

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Speaker 2: a resilient result. Though we've got more people expecting price and.

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Speaker 1: What about the supply part of the equation. Are we

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Speaker 1: still and given I don't think we are to the

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Speaker 1: extent we were, does that eventually have some sort of

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Speaker 1: impact on pricing?

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Speaker 2: Yeah, well, I think that's why we're seeing pricing remaining

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Speaker 2: relatively flat now and in the short term we still

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Speaker 2: think that will continue. We are still seeing consent issuance

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Speaker 2: run at a rate that's probably higher than what the

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Speaker 2: population growth really suggests we should be doing. So we

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Speaker 2: do see that supply being there until we get a

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Speaker 2: bit more active buying homes or see more immigration coming through,

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Speaker 2: and we're seeing some early signs of that good turn up.

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Speaker 1: All right, Nick, you have a good week and appreciate

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Speaker 1: it very Mking. Nick Tapley asb Chief Economy is really

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Speaker 1: one roof this week. There's a lot of listings seem

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Speaker 1: to me to be a lot of listings this week

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Speaker 1: suddenly hitting the market, which I thought was interesting. The

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Speaker 1: other piece you want to read Tony Alexander. He gave

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Speaker 1: a long list of why the days of the Mum

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Speaker 1: and Dad investor are largely over. I think he's got

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Speaker 1: hang on, He's got sixteen reasons why it's not good

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Speaker 1: to be a mum and dad investor. I'm still one

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Speaker 1: and I'm not changing despite what Tony says. But I

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Speaker 1: like what Tony says. I just don't agree with it,

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Speaker 1: but read it. For more from the Mic Asking Breakfast,

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Speaker 1: listen live to News Talks at B from six am weekdays,

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