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Speaker 1: Here the water waste of wireless can do it for

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Speaker 1: far less. Corus shares the real winner here. Thanks Matt.

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Speaker 1: Sixteen past six. Now let's have a look at the

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Speaker 1: international housing market. Brendan Larsen from Milford Asset Management is

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Speaker 1: with me at Brendan.

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Speaker 2: Good evening.

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Speaker 1: So we've had a bit of data, new data on

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Speaker 1: the US housing market out today. How are things looking

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Speaker 1: to you?

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Speaker 2: Yeah, so sort of a bit of a continuation of

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Speaker 2: some softer data we've seen. So housing market data this

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Speaker 2: morning show an unexpected decline in prices, So that sort

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Speaker 2: of added to a recent space of sort of weaker data.

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Speaker 2: We've seen housing starts, for example, that down about seventeen

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Speaker 2: percent already this year, we've seen a surge and sort

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Speaker 2: of the number of sellers versus by it. So this

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Speaker 2: differential is now the widest since twenty thirteen. So looking

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Speaker 2: at sort of existing home sales as well, that continues

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Speaker 2: to fluctuate sort of around recessionary levels. So a number

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Speaker 2: of data points all sort of pointing in the wrong

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Speaker 2: direction at the moment.

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Speaker 1: What's been driving the shift? Because I thought the US

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Speaker 1: housing market had been pretty resilient.

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Speaker 2: Yeah, it had been resilient. And it's probably a good

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Speaker 2: point to touch on. I guess US households typically borrow

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Speaker 2: our thirty year mortgages, so once they've locked in their

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Speaker 2: mortgage rate, they're typically less sensitive term movements and short

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Speaker 2: term rates. So when the FED began hiking, it meant

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Speaker 2: those that already locked in long term mortgages didn't feel

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Speaker 2: the pressure as much as as others. Perhaps consumers have

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Speaker 2: also done quite well in the US with sort of

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Speaker 2: wealth gains and income gains, and so that's been supportive.

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Speaker 2: But more recently, the sort of slowdown we've seen in

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Speaker 2: housing data has really come from a slowdown in economic

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Speaker 2: growth and a decline and consumer confidence really owing to

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Speaker 2: fiscal policy in the US, and so that's really what's changed.

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Speaker 1: Okay, So how does the performance of the US housing

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Speaker 1: market compare to our own one?

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Speaker 2: So US house prices are up about sixty five percent

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Speaker 2: since twenty nineteen, having fallen less in recent years. It's

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Speaker 2: showing signs of softening. As we just sort of touched on.

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Speaker 2: New Zealand, property prices are up about thirty percent since

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Speaker 2: twenty nineteen and remain substantially off their peak spite a

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Speaker 2: significant amount of interest rate cuts. Are really struggling to

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Speaker 2: gain momentum. Australian property prices, by contrast, they're effectively still

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Speaker 2: at all time highs, up about fifty percent since twenty nineteen,

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Speaker 2: and actually that average distorts some biggest state moves, so

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Speaker 2: Sydney and Perth prices are actually up fifty percent and

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Speaker 2: seventy five percent respectively. Auckland prices are up just twenty

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Speaker 2: percent over that same time period, so you can see

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Speaker 2: Australian housing has really outperformed New Zealand. I guess looking

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Speaker 2: at some of those sort of reasons why, perhaps it's

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Speaker 2: really to do with demographics and the sort of supply

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Speaker 2: demand between sort of those regions. So Australia had enormous

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Speaker 2: population growth really by immigration as a result of a

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Speaker 2: strong jobs market, and that influx of people demanding housing

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Speaker 2: when supply was really low really supported the housing market.

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Speaker 2: New Zealand is quite a contrast, So despite immigration that

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Speaker 2: was actually really strong after COVID, those immigrants were generally

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Speaker 2: lower skilled and lower income, so we actually lost a

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Speaker 2: lot of higher income workers to Australia. So having that

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Speaker 2: sort of reduced demand at a time when supply was

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Speaker 2: increasing and regulation was making property investment a bit less attractive.

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Speaker 2: All of that sort of weight on prices in New Zealand, okay.

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Speaker 1: And so what do you expect is going to happen

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Speaker 1: from here?

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Speaker 2: Yeah, it's hard to tell. There's likely to be differences

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Speaker 2: across regions still. We think in the US, for example,

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Speaker 2: it's a little bit less clear. I guess on one hand,

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Speaker 2: consumer confidence probably does rebound a little bit, given sort

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Speaker 2: of tariff risks have subsided. But on the other hand,

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Speaker 2: long term rates are still quite high, so affordability does

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Speaker 2: remain an issue. Australian housing is probably a bit more upbeat,

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Speaker 2: so they've got rate cuts coming through now, they've still

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Speaker 2: got population growth and so that is really positive for

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Speaker 2: house prices in New Zealand. Anecdotally, I guess we're hearing

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Speaker 2: a lot of supplies coming to the market and so

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Speaker 2: that does pose a bit of a headwind to prices.

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Speaker 2: On a positive note, perhaps changes to foreign vier rules

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Speaker 2: that are being speculated, you know, could be a positive.

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Speaker 2: But for the time being, it does feel like we're

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Speaker 2: going to continue to sort of muddle along.

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Speaker 1: Brendan, it's good to talk to you, mate, Thank you

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Speaker 1: for that, even if it's not altogether good news Brendan Larson,

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Speaker 1: Milford Asset Management.

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Speaker 2: news talks.

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