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Speaker 1: Here the dupless ls.

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Speaker 2: So fewer than sixty percent of us now own our

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Speaker 2: own homes. Now, apparently that is going to fall even

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Speaker 2: lower to below fifty percent by twenty fifty. This is

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Speaker 2: according to new research has been commissioned by Westpac. So

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Speaker 2: the bank is now going to make it easier for

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Speaker 2: low to middle income owners to buy houses via shared equity,

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Speaker 2: leasehold or rent to buy schemes. And Katherine McGrath is

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Speaker 2: Westpac's chief executive.

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Speaker 1: Hey Catherine, Hi, Heather, how are you?

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Speaker 2: I'm very well, thank you. So what's the planner you

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Speaker 2: guys going to lend a billion bucks over the next

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Speaker 2: three years to community housing providers?

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Speaker 1: We absolutely want to, and we want to lend even

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Speaker 1: more than that if possible. We're a big believer in

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Speaker 1: home ownership bring a real range of benefits and it's

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Speaker 1: critical that we look at different ways of doing that

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Speaker 1: because home ownership is increasingly becoming less affordable for more

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Speaker 1: New Zealanders.

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Speaker 2: So how much demand is there from these community housing providers?

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Speaker 1: So we're starting to seeing increasing levels of demand as

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Speaker 1: potential home buyers understand that there are cheap ways of

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Speaker 1: getting into their own first home. But in order to

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Speaker 1: do that you need to be prepared to think about

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Speaker 1: some of those different models like shared equity and lease

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Speaker 1: hold because it makes it more affordable.

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Speaker 2: Can you quantify the demand? I mean, if you guys

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Speaker 2: are talking about lending a billion, is the demand a billion?

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Speaker 2: Is it ten? One hundred?

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Speaker 1: Well, what our research estimates is that one hundred and

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Speaker 1: fifty two thousand KIVI households could be eligible for these

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Speaker 1: sorts of shared ownership past phase, but only a third

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Speaker 1: of the people are aware of the option, and so

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Speaker 1: we want to get this profile up some more people

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Speaker 1: know that there are a range of options for them.

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Speaker 2: How much are you stepping it up, right to get

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Speaker 2: to a billion if billion over the next three years.

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Speaker 2: How much have you done in the last three years.

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Speaker 1: Sorry, don't have that at the top of my fingers,

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Speaker 1: but we think that's a good stretching target. But as

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Speaker 1: I said, I'd really love to do quite a bit

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Speaker 1: more than that.

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Speaker 2: Because the reason I'm asking these questions is because while

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Speaker 2: a billion sounds like a lot in terms of your lending,

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Speaker 2: it really isn't right. I mean, the three years you

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Speaker 2: did forty five billion of new mortgages home first home

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Speaker 2: buyers thirty four million of business loans for commercial property.

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Speaker 2: So it's kind of small, isn't it.

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Speaker 1: But it's a growing it's a growing area and there

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Speaker 1: are a number of different ways of getting into it,

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Speaker 1: and so we think there's a target for this particular

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Speaker 1: type of lending. It's a good target, and it's putting

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Speaker 1: a profile on something that we can do with some

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Speaker 1: light being shot on.

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Speaker 2: Yeah, and then what else are you prepared to do?

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Speaker 2: Are you prepared to perhaps lower the interest rates, tack

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Speaker 2: on more risk, do anything like that.

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Speaker 1: So firstly, we've already changed our risk appetite in terms

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Speaker 1: of how we think about lending to community housing providers,

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Speaker 1: so that's been an important thing. We've already made some

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Speaker 1: graph changes in terms of how we assess the lending

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Speaker 1: for the individuals because obviously if you're lending over lease

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Speaker 1: hold or shed equity, different to the traditional model. And

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Speaker 1: then finally, as we see more barriers come up, whether

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Speaker 1: it have to do with risk appetite or anything else,

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Speaker 1: then we will walk our way through it. Because what

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Speaker 1: we'd really like to be able to do is to

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Speaker 1: simply say, yes, how do you feel.

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Speaker 2: About the Commerce Commission? You will have seen this by now,

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Speaker 2: Commission looking into the old payway fees.

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Speaker 1: I think it's great that the Commerce Commission looks into

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Speaker 1: whether they think kiwis are getting good value, and so

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Speaker 1: we'll read the report with interest.

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Speaker 2: What do you reckon? Do you reckon we're getting good value?

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Speaker 1: Sorry, we haven't. I've seen the headlines, but I haven't

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Speaker 1: been able to look at it in detail.

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Speaker 2: Do you not do you? I mean, because you guys,

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Speaker 2: this is your bread and butter as a bank, what

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Speaker 2: do you reckon?

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Speaker 1: I think what they're particular looking at as the visa

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Speaker 1: and master cad vies. So that's not an area that

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Speaker 1: I've spent a lot of time looking into.

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Speaker 2: Do you have any view on when we're going to

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Speaker 2: get an OCR cut?

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Speaker 1: So our economists are saying that that will happen in November,

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Speaker 1: likes mortgages. I'm hoping it could be earlier than that,

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Speaker 1: but the currently the Westpac teams view as November.

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Speaker 2: Yeah, Catherine, Okay, So I mean it wasn't that long ago, right,

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Speaker 2: It was just a few weeks ago that we were

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Speaker 2: talking about May at the earliest. Maybe some were saying February,

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Speaker 2: and anybody calling novall was an outlier. Right now, the

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Speaker 2: consensus seems to be November. You reckon it could be

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Speaker 2: even earlier.

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Speaker 1: Well, I think some in the market are saying that

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Speaker 1: it could be. And what's great is I think there

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Speaker 1: was this bank is responding to what they can see

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Speaker 1: happening in the market and the.

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Speaker 3: Data that we've got. So the CPI getting that close

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Speaker 3: to three percent in the most recent announcement, I think

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Speaker 3: is telling us that things are changing at reasonable pace,

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Speaker 3: and it's good to see that the tone of the

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Speaker 3: RBNS has changed reflecting some of that new data that's

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Speaker 3: coming out.

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Speaker 2: Are you seeing people with lending with you guys having

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Speaker 2: a bit of a tough time.

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Speaker 1: We've been able to see a steady a steady increase

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Speaker 1: in terms of people finding it a bit tougher. What

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Speaker 1: we're definitely seeing is that homeowners, as far as possible,

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Speaker 1: are prioritizing those mortgage payments. But you can definitely see

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Speaker 1: strain coming through the system for businesses and homeowners, and

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Speaker 1: the sectors that are particularly impacted areas like possible talenty

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Speaker 1: and the fact that our retail has been has gone

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Speaker 1: backwards five months and New Zealander is telling you that

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Speaker 1: all of us are just tightening our belts a bit

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Speaker 1: and that obviously hasn't real impact on those industries.

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Speaker 2: Yeah, fair enough. Hey Catherine, thank you so much, Really

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Speaker 2: appreciated a lovely to talk to you. That's Katherine McGrath,

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Speaker 2: wespec's chief executive. For more from Heather Duplessy Allen Drive,

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Speaker 2: Listen live to news Talks. It'd be from four pm weekdays,

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