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Speaker 1: All right, finally some good economic news and more people

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Speaker 1: are getting mortgages. Centric data out today shows new residential

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Speaker 1: mortgage lending is up over twenty percent year on year

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Speaker 1: for the second month in a row. So to discuss this,

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Speaker 1: I'm joined by Westpac's chief economists Kelly Echold. So Hello, Kelly,

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Speaker 1: good morning. Does this mean the economy is back on

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Speaker 1: track or what?

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Speaker 2: Well? I think it's sitting in the right direction. It's

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Speaker 2: still pretty early days yet, and many of the indicators

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Speaker 2: for growth for where we are now are still a

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Speaker 2: bit subpar, but certainly those lower interest rates are starting

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Speaker 2: to flow through.

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Speaker 1: How much of us new lending is from first home buyers.

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Speaker 2: There is some of it, although I would have to

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Speaker 2: say that when we look at the credit statistics, we

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Speaker 2: actually see the investors are the strongest part of the

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Speaker 2: market so far, but some of the early indications we've

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Speaker 2: seen in the last few months suggest that the more

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Speaker 2: kind of like low income marginal buyer is more important.

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Speaker 2: So that's the first time buyers there.

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Speaker 1: So the investors are that because the tax thing that

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Speaker 1: happened after the last election, and finding the interest rates

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Speaker 1: have fallen.

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Speaker 2: Yeah, Well, I think particularly it's the lower interest rates

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Speaker 2: that are important for the investors. It just means that

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Speaker 2: that hurd or rate of return you need to beat

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Speaker 2: is a bit lower. And obviously the tax changes that

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Speaker 2: were brought in by this government as well are obviously helpful.

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Speaker 1: So of course we all look to the RBNZ and

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Speaker 1: the Reserve Bank and try to figure out what they're

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Speaker 1: going to do next. Will they be hearing you today

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Speaker 1: looking at these numbers and thinking they've done enough or

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Speaker 1: do you think we're still on track for another cut

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Speaker 1: this month?

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Speaker 2: Well? I think we're still on track for another cut

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Speaker 2: this month. I mean, most of the data, as I've said,

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Speaker 2: has been a little bit subpar. Actually, I think they

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Speaker 2: might have been a little bit worried about that. But yesterday,

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Speaker 2: for example, we did get a really good month of

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Speaker 2: building consens number and it sort of went up to

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Speaker 2: seven point two percent for the month. That was the

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Speaker 2: first the third big month in a row, so that

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Speaker 2: will be relieving them. I think that the things are

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Speaker 2: starting to pen out is expected. The interest rates have

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Speaker 2: gone down a long way and that's the leading edge

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Speaker 2: of the recovery, but there's still quite a long way

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Speaker 2: to go here, and it is just one set of

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Speaker 2: indicators as well.

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Speaker 1: So you had a good profit yesterday, up sixteen percent.

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Speaker 1: A net profit of one hundred and ninety seven million

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Speaker 1: dollars actually is up thirteen percent. So how much can

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Speaker 1: we thank this increase in lending for your success over

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Speaker 1: the course of this year.

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Speaker 2: Well, I mean the lending growth has actually still been

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Speaker 2: a bit subpar. I mean that it is actually starting

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Speaker 2: to improve. So I mean, if we look at business lending,

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Speaker 2: for example, it's finally poked up to around looking at

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Speaker 2: my number here, three point seven percent, So that's sort

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Speaker 2: of the highest level since about twenty twenty three. I mean,

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Speaker 2: I think we're looking forward to a better operating environment

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Speaker 2: for the whole economy in the next year.

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Speaker 1: All right, So are we beyond green shoots? And do

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Speaker 1: we Are we actually starting to poke out of the ground.

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Speaker 1: I'm just saying for a metaphor or an allegory that

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Speaker 1: you know that she fits us.

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Speaker 2: No, I think we're actually just seeing the odd green

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Speaker 2: shoot poking out at the moment. We need a bit

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Speaker 2: of water on it, basically in a bit of time,

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Speaker 2: so that you can actually see something a bit more

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Speaker 2: than that.

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Speaker 1: Well, Kelly Echold, I thank you so much for your

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Speaker 1: Time Today. Kelly Echold is the senior economist from Chief

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Speaker 1: Economists from Westpac. For more from Early Edition with Ryan Bridge,

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