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Speaker 2: for the one roof radio show on over one hundred
Speaker 2: and eighty ten and eighty text nine nine two. And
Speaker 2: my guest is she is a financial advisor at Property
Speaker 2: Apprentice and her name is Debbie Roberts. And almost get
Speaker 2: into the stage where we need an open production. People
Speaker 2: will recognize your voice, Debbie, just about I want imagine
Speaker 2: thank you.
Speaker 4: That's kind, but probably.
Speaker 2: How are you anyway?
Speaker 4: I'm good, I'm good.
Speaker 2: You've been keeping yourself out of mischief?
Speaker 3: Yes?
Speaker 4: Absolutely, things are certainly getting busy at the moment.
Speaker 2: Well, we're going to talk about the OCR because the
Speaker 2: Reserve Bank has dropped the OCR by fifty basis points.
Speaker 2: A lot of Now this is for you if you're listening.
Speaker 2: How far do you want it, want it need it
Speaker 2: to fall? And how fast should it fall? There's so
Speaker 2: many I mean basically should it, could it? Or what
Speaker 2: do you need it to fall? To the OCR Because
Speaker 2: a lot of commentary I've seen is that we know
Speaker 2: that Adrian Or he was. In fact, I think there
Speaker 2: was a time, wasn't there, Debbie, when he was talking
Speaker 2: about he might lower it next year, And of course
Speaker 2: he didn't really realize to detrash the economy so effectively
Speaker 2: exactly exactly.
Speaker 4: He was originally talking about not reducing it until maybe
Speaker 4: middle of next year at one point. But I think,
Speaker 4: you know, in my opinion, I think he raised it
Speaker 4: too late and he's reduced it too late. He should
Speaker 4: have started reducing ages ago. I think, yeah, there's a
Speaker 4: lot of blood in the water at the moment.
Speaker 2: Actually, I'm glad to hear you use a dramatic expression
Speaker 2: like that, because a lot of the time, the language
Speaker 2: of economics denies the human suffering that goes on when
Speaker 2: you raise an interest rate, and people if you have
Speaker 2: to have a mortgage sale, that is a massive, massive
Speaker 2: toll to take on any individual, and economists use the expression.
Speaker 2: I think Adrian Or used it. I'm not going to
Speaker 2: pick on him. He's using the language that he's accustomed to.
Speaker 2: But you know, there's going to be a little bit
Speaker 2: of pain that we might have. There might be a
Speaker 2: bit more pain. It's not like someone just you know,
Speaker 2: injects you with a little bit of pain for a
Speaker 2: moment where you'll feel some temporary discomfort. It's going to
Speaker 2: ruin lives.
Speaker 4: Yeah, absolutely, And I think potentially the biggest issue at
Speaker 4: the moment is the pain that the economy is suffering.
Speaker 4: You know, to be fair, with banks testing affordability at
Speaker 4: much higher interest rates than they than are currently on offer.
Speaker 4: That's prevented a lot of people from getting into mortgage
Speaker 4: g sales. I mean, we saw a lot more mortgage
Speaker 4: e sales in the Global financial crisis than we've seen
Speaker 4: this time round because the banks are implementing those high
Speaker 4: test rates, so they were stress testing everyone before they
Speaker 4: even signed off the mortgage, which has helped.
Speaker 2: Is there also have banking practices in the last twenty
Speaker 2: years or so changed a bit.
Speaker 4: So they've changed dramatically.
Speaker 2: Okay, good. I do remember the black and white section
Speaker 2: of the property whatever it was that you'd read, and
Speaker 2: that's the mortgage sales used to be quite thick, and
Speaker 2: you just observe that there are fewer, so obviously the
Speaker 2: banks are doing much more to try and protect the
Speaker 2: interests of their borrowers.
Speaker 4: Well, I think ever since the Global Financial Crisis, to
Speaker 4: be fair, all the rules around lending changed quite dramatically,
Speaker 4: and then with the implementation of the Triple CFA, they
Speaker 4: changed again. So the rules around a definitely starting to relax.
Speaker 4: So getting lending is starting to get a little bit easier,
Speaker 4: which is great. The difficulty at the moment, I think,
Speaker 4: and this is one of the reasons that we're seeing
Speaker 4: the ocr coming down, is because the economy is struggling,
Speaker 4: you know, and when the economy struggles, people lose jobs,
Speaker 4: businesses go into liquidation, you know. So we've essentially been
Speaker 4: in an economic downturn. We've been in what's the word,
Speaker 4: I'm looking for a recession for nearly three years. You know.
Speaker 4: It's been brutal for a lot of people.
Speaker 2: So, by the way, just so if you have I mean,
Speaker 2: because sometimes people digest their news infrequently. So the cash
Speaker 2: rate has been reduced by fifty basis points to four
Speaker 2: point seventy five percent. A question for you, and Debby's
Speaker 2: going to give her view on what she understands it
Speaker 2: maybe needs to happen, or what the banks also are
Speaker 2: anticipating because they spend a lot of time thinking about
Speaker 2: the stuff and trying to guess what Adriana was going
Speaker 2: to do. But the question for you is on I
Speaker 2: eight hundred eighty ten eighty was that enough? Or do
Speaker 2: you think that adrian or needs to do more? Now?
Speaker 2: So it's been chopped point five of a percent fifty
Speaker 2: basis points? Always think basis points? Why do't they just
Speaker 2: say half a percent? Anyway, that's the language of economists,
Speaker 2: I guess, But do they need should it for? Should
Speaker 2: it be cut further? And will it be cut further?
Speaker 2: I eight hundred eighty ten eighty. You can give your
Speaker 2: reckons on that, Debbie, What do you reckon?
Speaker 4: I reckon? So I reckon it absolutely needs to come
Speaker 4: down further, and I think it needs to come down
Speaker 4: hard and fast. So a lot of economists are expecting
Speaker 4: at least a point five reduction in November. Whoa, I know,
Speaker 4: but that's and that's what the financial markets are factoring
Speaker 4: in as well. So at least a point five?
Speaker 2: Why why should it be another point five?
Speaker 4: And what what the economy's tanking?
Speaker 2: And what will that? How do? What are the economic
Speaker 2: gears that get pulled when you drop the interest rate?
Speaker 2: How does that play out? From your perspective?
Speaker 4: It gives people hope you know, is that just.
Speaker 2: All because the cost of investing in building and infrastructure
Speaker 2: and everything, it just gets cheaper, and it means that
Speaker 2: we can see more action and that feeds through the
Speaker 2: rest of the economy and business and borrow cheaper and
Speaker 2: all that.
Speaker 4: That's part of it. But I think probably, and I
Speaker 4: could be wrong here. This is just my personal opinion,
Speaker 4: but I think the reason that the ocr needs to
Speaker 4: come down is to give mortgage owners, like people who've
Speaker 4: got mortgages on their homes, give them some interest rate relief,
Speaker 4: because then they're going to have more money to spend
Speaker 4: in the economy. Because it's the businesses that haven't been
Speaker 4: doing sales that have been struggling, like you know, think restaurants,
Speaker 4: think luxury items, you know, clothes. People have been spending
Speaker 4: less on clothes, they've been spending less on furniture, they've
Speaker 4: been spending less on things that are seen to be
Speaker 4: not necessarily seen uls but nice to have. So those
Speaker 4: sort of companies in those industries have really done it tough.
Speaker 2: Because for somebody who's got a chunkyish sort of mortgage,
Speaker 2: I don't know what the average mortgage borrowing would be
Speaker 2: these days. But if you think of people in the
Speaker 2: first ten years that they're borrowing, they could have you know,
Speaker 2: I don't know, five hundred to a million dollars on
Speaker 2: mortgage much money.
Speaker 4: Don't remember the average mortgage around I saw something just
Speaker 4: a couple of days ago, about half of mate. It's
Speaker 4: about four hundred and eighty thousand I think is the
Speaker 4: average mortgage for a first home buyer.
Speaker 2: Because one percent on a half million dollar mortgage, that's
Speaker 2: what's that year. Hundred bucks a week about that.
Speaker 4: So most people in New Zealand at the moment when
Speaker 4: they're refixing their mortgages, they're either floating or just fixing
Speaker 4: for six months. So that means and that's quite different
Speaker 4: to the long term normal, like the long term Norman
Speaker 4: New Zealand is twelve month fixed rates or two year
Speaker 4: fixed rates. So that's changed. People are moving towards the
Speaker 4: shorter term interest rates now because they know that interest
Speaker 4: rates are on the way down. So you know, people
Speaker 4: are they're not wanting to fix for longer term, which
Speaker 4: I think is a smart decision because I do think
Speaker 4: there is going to be some more reductions and interest rates.
Speaker 2: Well, does anyone think that they're I mean, all the
Speaker 2: banks are trying to do with their longer term borrowing
Speaker 2: is make it so attractive that people sign up for
Speaker 2: maybe two or three or four years.
Speaker 4: The cheapest rates are the four and five year rates
Speaker 4: at the moment.
Speaker 2: Which tells you where they think the interest rates are going,
Speaker 2: which is down.
Speaker 4: Yeah, exactly, because they want you to fix for long
Speaker 4: term so you don't refinance to another bank. What's in my.
Speaker 2: Opinion, actually, I guess that must be the only motivation, because, yeah,
Speaker 2: why would they offer cheaper money. It's because they want
Speaker 2: they want your business for longer.
Speaker 4: Yeah, and there's some banks that are offering cash backs
Speaker 4: if you refinance to them, you know, so they're trying
Speaker 4: to they're trying to get your money. They're trying to
Speaker 4: get your business. So if they've locked you into a
Speaker 4: longer term interest rate, you're less likely to refinance to
Speaker 4: another bank because you have to pay break these And my.
Speaker 2: Producer Tire has told me that the average first home
Speaker 2: buyer mortgage it's sort of thinking of people at first
Speaker 2: home buyers, is five hundred and fifty four thousand dollars off.
Speaker 2: What did you think it was?
Speaker 4: I thought it was about four eighty.
Speaker 2: Yeah, I think that's a pretty good guess. It was
Speaker 2: in the vicinity of half a million.
Speaker 4: I've read a lot of articles this week and I'm
Speaker 4: bit sleep deprived.
Speaker 2: The age you've been working hard that we want to know.
Speaker 2: The average owner occupied mortgage is three hundred and nine
Speaker 2: thousand dollars. So that's on average, which means there'll be
Speaker 2: people who are a lot more than that. I mean,
Speaker 2: there'll be people who have had comfortably not comfortably. But
Speaker 2: if you're buying in a market like Auckland, and you've
Speaker 2: got a reasonable disposable income where you want the house
Speaker 2: you want, you might have a million dollar mortgage plus easily.
Speaker 4: She would think there's definitely people out there with that
Speaker 4: sort of mortgage on their home. Whether that's a smart
Speaker 4: decision or not is a different story.
Speaker 2: Yes, I know someone who works on the show who's
Speaker 2: is probably wincing at those words.
Speaker 4: Actually, well, it depends on your financial position.
Speaker 2: Well, because just to paint, but to paint a picture
Speaker 2: of it. What my memories deserted me on this. But
Speaker 2: what were people borrowing at at its cheapest? Were there
Speaker 2: something like two point nine to nine percent mortgages going
Speaker 2: for a while?
Speaker 4: Yeah, so that was during COVID you know, during COVID,
Speaker 4: the Reserve Bank slashed the OCR and at that point,
Speaker 4: interest rates were two and a half three percent, you know,
Speaker 4: two and a half to two point nine to nine percent.
Speaker 4: So a lot of people fixed their mortgages for five
Speaker 4: years on those cheap interest rates.
Speaker 2: Very good move, absolutely.
Speaker 4: And you know, some of them still haven't come off
Speaker 4: those low interest rates. Most of them will have come
Speaker 4: off those low interest rates before the next you know,
Speaker 4: before the end of the next twelve months, but you know,
Speaker 4: that's going to have quite an impact. I think the
Speaker 4: important thing to remember is that the average long term
Speaker 4: interest rate in New Zealand, excluding the period during COVID
Speaker 4: when things were unusually low, the long term average interest
Speaker 4: rates six point three five percent.
Speaker 2: So that also begs the question what is the sort
Speaker 2: of optimum interest rate that we should expect or I mean,
Speaker 2: because there's one thing to say, I want interest rates
Speaker 2: to be four percent or something, but it's not really
Speaker 2: going to happen realistically.
Speaker 4: It's not likely to get that. Like, I mean, interest
Speaker 4: rates have been trending lower over the last decade or so,
Speaker 4: so they have definitely been showing a downward trend. Why
Speaker 4: is that just because I think central banks around the
Speaker 4: world have been learning. You know, we haven't always had
Speaker 4: a reserve bank in New Zealand that's controlled things with
Speaker 4: the OCR in the eighties, did you didn't have twenty
Speaker 4: percent plus? You know that was before the OCR. So
Speaker 4: OCR has helped to control interest rates to a certain extent.
Speaker 4: So yeah, it's not all bad.
Speaker 2: Yeah, okay, we want your calls. One hundred and eighty
Speaker 2: ten eighties. The cash rate has been dropped by zero
Speaker 2: point five percent forty basis points, as they like to say,
Speaker 2: doesn't need to fall further. And if you want a
Speaker 2: little a little bit more context, the interest rates being
Speaker 2: offered by banks, the variables are around just under eight percent,
Speaker 2: and if you want to go six months or a year,
Speaker 2: it's around sort of six and a half ish percent,
Speaker 2: depending on which what your bank is. Oh, actually that's
Speaker 2: if you've got good equity, Either that or you're looking
Speaker 2: at about seven percent for six months or a year.
Speaker 2: It gets cheaper and cheaper and cheaper at the further
Speaker 2: you go out. What do you think it should be?
Speaker 2: What does it need to fall for you to be
Speaker 2: able to actually start spending money on anything apart from
Speaker 2: your mortgage and food. Oh, eight hundred eighty ten eighty
Speaker 2: text nine two nine two. We'll be back in just
Speaker 2: a moment. It's coming up to twenty one past four.
Speaker 5: News Talk said, b's never seems good.
Speaker 2: And welcome back to the one riffradio show on the
Speaker 2: weekend Collective. I'm Ton Beverage. My guest is Debbie Roberts.
Speaker 2: She's a financial advisor at Property Apprentice. DEBI if people
Speaker 2: want to get in touch with Property Apprentice, it is
Speaker 2: Property Apprentice dot co dot NZ. Correct with this relief. Now,
Speaker 2: by the way, I have said some text people telling
Speaker 2: me that my figures are on what the interest rates are. Look,
Speaker 2: I'm scanning a page of about probably about it one hundred,
Speaker 2: one hundred and fifty interest rates. And yes there are
Speaker 2: some cheaper ones for five point seventy five percent or
Speaker 2: five point sixty nine for two or three year mortgages. Yes,
Speaker 2: that's right, but they also some of many of those
Speaker 2: rates are if you've got decent equity. But there is
Speaker 2: one I think the Asb's offering five point six nine
Speaker 2: percent for two years. That's s actually not a bad deal,
Speaker 2: is it, Debbie.
Speaker 4: Yep, there's some pretty good deals out there at the
Speaker 4: moment for sure.
Speaker 2: So, yeah, what do you think should happen with the
Speaker 2: OCI should it continue to fall? And we'll talk to
Speaker 2: Debbi in just a moment about what she knows the
Speaker 2: ban Thanks are planning on, because they'll be thinking ahead
Speaker 2: on this one for sure. Aaron High, Hey, they have
Speaker 2: a going good Hey.
Speaker 6: Yeah, I've got a mortgage bought two years two and
Speaker 6: a half years ago now, and that was kind of
Speaker 6: when the industrates are kind of starting to kind of
Speaker 6: get up and say a little bit of those Midt
Speaker 6: late fives, hot mid six, this kind of thing, And
Speaker 6: I'm pretty happy with what I was playing. I split
Speaker 6: my mortgage onto two different rates, and so I think
Speaker 6: that's one thing that a lot of people don't know
Speaker 6: that they can do, and I think sometimes some banks
Speaker 6: don't often tell people that they can do, is even
Speaker 6: splitting your mortgage rate, your mortgage amount into a couple
Speaker 6: of amounts and then at least you can take the
Speaker 6: benefit of long term on part of it, and then
Speaker 6: you've got some on some on shore terms as well.
Speaker 4: Yeah, absolutely thinks of.
Speaker 6: His rate changes and things like that too.
Speaker 4: Really good strategy. And you know, I think I've read
Speaker 4: an article recently that said that most New Zealanders don't
Speaker 4: know that mortgage advisors are free to work with because
Speaker 4: they get paid by the banks. So like, we've always
Speaker 4: recommended that people work with a mortgage advisor because they
Speaker 4: essentially work for you even though they get paid by
Speaker 4: the banks. They work for you and your best interests,
Speaker 4: and they've got access to over twenty lenders, you know,
Speaker 4: so they can shop around, get the best deal for
Speaker 4: you and help advise you on the structures.
Speaker 2: Feet Lane, did you get yours through mortgage advisor?
Speaker 6: Did you say, Aaron, Well, I had a friend of
Speaker 6: mine who's a mortgage broker. Yes, but I've kind of
Speaker 6: I already have. I had a house about fifteen years ago,
Speaker 6: originally as my first house when I was about eighteen,
Speaker 6: and I remember interest from its back then we're about
Speaker 6: eight to eight seven eight. But I think people when
Speaker 6: interest rates were really low, people are like, oh, yeah,
Speaker 6: my borrowing power is this. I can spin up to
Speaker 6: this not thinking a head, and I'm like, Okay, if
Speaker 6: the interest rates are going to be at two percent, now,
Speaker 6: what are they going to be in two or three
Speaker 6: years when they come off the fixed rate? And then
Speaker 6: this is why people freaked out when they were five
Speaker 6: and six percent coming off their fixed rates, and they
Speaker 6: were like, because they're over capitalized, over mortgaged.
Speaker 2: I'm glad you mentioned the more that we've talked about
Speaker 2: the mortgage broker, because we used one when we first.
Speaker 2: Because I work on a property show and I meet
Speaker 2: a lot of people, somebody produced me. But I actually
Speaker 2: wasn't going to initially because I was I don't know,
Speaker 2: I just had this wasn't it in bills and built prejudice?
Speaker 2: But I thought, what do I need to go to
Speaker 2: mortgage advisor. I'll just go to the banks until somebody
Speaker 2: gave me good advice and says no, they'll and they'll
Speaker 2: also do the thinking for you on the way you
Speaker 2: can structure the mortgage because they do it all the time.
Speaker 2: And it was, yeah, and.
Speaker 4: All banks are different, you know, because it depends on
Speaker 4: your individual situation, and you know, some banks are friendlier
Speaker 4: than others if you're self employed, or if you earn
Speaker 4: bonuses or commissions, and you know, there's so many different variables.
Speaker 4: So if you go directly to a bank, they're only
Speaker 4: going to tell you about their stuff. They're not going
Speaker 4: to say they're not going to say, oh, we can't
Speaker 4: give you lending, but if you go down the road
Speaker 4: and see that bank, they'll approve it, whereas a mortgage
Speaker 4: advisor can.
Speaker 6: Yeah, that was really handy with my broker. Was like
Speaker 6: for me coming back into the property after about fifteen years,
Speaker 6: I was as a first time buyer, so there was
Speaker 6: the kind of work ins and outs of using kvsaver.
Speaker 6: I couldn't use part of my kisaver, and they knew
Speaker 6: banks that would potentially help with with the with the
Speaker 6: income and all that kind of was that what do
Speaker 6: you what.
Speaker 2: Do you think is going to happen? What do you
Speaker 2: think is going to happen with the cash? Right? Do
Speaker 2: you do you need it to for further for yourself
Speaker 2: or do you want it to fall further? And do
Speaker 2: you expect it to fall further?
Speaker 4: Yes.
Speaker 6: So, because I had my split rates, I had one
Speaker 6: for one year and one for two years. So my
Speaker 6: first year came off at the start of this year
Speaker 6: was February, and I fixed. I ended up fixing that
Speaker 6: for five years at five point nine percent, and so
Speaker 6: my second part, my second half, comes off in February
Speaker 6: next year. So I'm kind of hoping that dropped quite
Speaker 6: a bit, so that my other half will get them
Speaker 6: a slow rate.
Speaker 4: Actually, that's I think that's probably going to be quite
Speaker 4: good timing if that's coming off in February, because I mean,
Speaker 4: the financial markets are certainly factoring in big drops between
Speaker 4: now and then.
Speaker 2: So yeah, good, thanks for call Aaron. Good on your mate. Yes, okay,
Speaker 2: bye bye. Actually, how many ways can you put your
Speaker 2: mortgage realistically? Because there would be people who for sure
Speaker 2: have In fact, I would imagine that most people would
Speaker 2: have a revolving aspect to their mortgage.
Speaker 4: Oh you might be surprised, I'd say most people don't.
Speaker 2: Isn't that funny because I just assumed that that you'd
Speaker 2: have a revolving one that you would put everything into
Speaker 2: to try and reduce whatever you had on that or
Speaker 2: some aspects, even if it's ten twenty thirty thousand, so
Speaker 2: it's like your living expenses. But if you can be frugal,
Speaker 2: you can pay that off.
Speaker 4: Yeah, revolving credits and offset that wants are a great
Speaker 4: way to pay your mortgage off faster. But you've got
Speaker 4: to be pretty good with your money management. Not everyone is,
Speaker 4: So if someone's not very good with budgeting, it'd be
Speaker 4: a nightmare. Okay, And Also, it does affect how much
Speaker 4: you can borrow because the offset loan and the involving
Speaker 4: credit they're on a floating interest rate, so banks test
Speaker 4: it differently, So it does affect how much you can borrow.
Speaker 4: So if you're borrowing capacity is pretty limited, then the
Speaker 4: mortgage advisor would probably suggest.
Speaker 2: Not just yet, how many ways can you how many
Speaker 2: ways can you split the morghage? Could you go for
Speaker 2: I want a third on five years, I want another
Speaker 2: third on three years, and I want another third on
Speaker 2: you know, one year. Can you do that and split
Speaker 2: it as as you want?
Speaker 4: As far as I'm aware, there's not a restriction at
Speaker 4: all as to how many different splits you have, it's
Speaker 4: just how many you want to be managing.
Speaker 2: So okay, I've just realized that I probably should have
Speaker 2: split mine a bit more because I just you know,
Speaker 2: when you get used, this is the thing people will
Speaker 2: be listening. You think. I'm sortied. This is what I've got.
Speaker 2: I've got a little bit on revolving, but we've paid
Speaker 2: off the revolving. We've just got what we've left on
Speaker 2: a sex month because I think that's going to keep falling.
Speaker 2: And now I think of it, I think well, I
Speaker 2: should probably put two thirds of that on the fantastic
Speaker 2: rate for a couple of years, unless I think it's
Speaker 2: going to get even cheaper, which idn'tify.
Speaker 6: I know.
Speaker 4: This is where having a crystal ball would be really handy,
Speaker 4: wouldn't it.
Speaker 2: That would be great if I had a dollar for.
Speaker 4: Every time someone said to me, what do you think
Speaker 4: is going to happen about this?
Speaker 2: You know, how do you advise people on that? Because
Speaker 2: you are a financial advisor as well, and obviously you
Speaker 2: don't give advice to people over the airwaves. It's just
Speaker 2: general comments. But what do you say when people say
Speaker 2: what do you think is going to happen? Because you're
Speaker 2: allowed to say what you think?
Speaker 4: Yeah, absolutely, And I mean part of that is my job.
Speaker 4: You know, I've got to give advice based on what
Speaker 4: we know about what's happening at the moment and best
Speaker 4: guesses as to what's going to happen moving forward. But
Speaker 4: you know, this is part of what we do where
Speaker 4: we live and breed this stuff every day.
Speaker 2: So well, speaking of those who live and breed the stuff,
Speaker 2: are the banks what are they signaling that they think
Speaker 2: the cash rate's going to do in the next little
Speaker 2: while so.
Speaker 4: They're definitely signaling that they think rates are going to
Speaker 4: come down. A lot of the banks drop the interest
Speaker 4: rates before the announcement.
Speaker 2: Well that was one of the things that's like people
Speaker 2: were holding out for the OCR change. And some of
Speaker 2: the comment Trail'd had through guests in the studio is like, well,
Speaker 2: the banks have already priced that in, although it does
Speaker 2: seem that they've moved a little bit, doesn't it.
Speaker 4: So the thing, I think it's going to be interesting
Speaker 4: over the next few months because banks do compete with
Speaker 4: each other and when they see one bank reducing rates,
Speaker 4: they're like, oh, maybe we should start reducing because they
Speaker 4: don't want to be the one that's high higher than
Speaker 4: everyone else. You know, because people shop around, and especially
Speaker 4: if they're working with a mortgage advisor, the mortgage advisor
Speaker 4: knows which banks are offering the best deals at the moment.
Speaker 2: So yeah, so what of the So how do the
Speaker 2: banks signal it that you what what do you think
Speaker 2: they're going to go down to?
Speaker 4: What do you think that I would say just about
Speaker 4: all of the banks are expecting next month's announcement to
Speaker 4: be another point five reduction in the OCR at least boomfa.
Speaker 4: Some of them are expecting point seventy five.
Speaker 2: Really, I know, wow, I know, how.
Speaker 4: Cool would that be? Every wrong with the mortgage right
Speaker 4: now has got their fingers crossed.
Speaker 2: I mean, everyone has their reckons. You know why I
Speaker 2: don't think they'll do that is because I think that
Speaker 2: Adrian or in the back of his mind and his
Speaker 2: team are still worried about giving inflation a bit more
Speaker 2: of a nudge, even though we've got it and we're
Speaker 2: getting it out of control, that they will be nervous
Speaker 2: about giving too much stimulus because that would be at
Speaker 2: one point two five percent, which is a lot more
Speaker 2: money coming back into the economy potentially.
Speaker 4: So it's all going to depend on the figures that
Speaker 4: come in because we've got what is it is GDP's
Speaker 4: out next week. I think at the top of my head,
Speaker 4: I think it's next week, next Wednesday.
Speaker 2: Okay, Tyra will look at that. We'll get a date
Speaker 2: for next on GDP figures when they next out.
Speaker 4: Tyra, I literally just talked about that in the event
Speaker 4: that I just ran at work. I can't remember now,
Speaker 4: that's all right, brain's shutting down.
Speaker 2: So we're talking the consensus ism. It sounds like a
Speaker 2: minimum of point five almost.
Speaker 4: It seems that that's the way that the market must
Speaker 4: be things. Yeah. Yeah, So because the OCR announcements every
Speaker 4: six weeks except for over Christmas, so next month is
Speaker 4: the last one until February. You know, we don't have
Speaker 4: another OCR announcement until February. After next month, so yeah,
Speaker 4: And I think when the GDP results come out, if
Speaker 4: that's showing that the economies in worse shape than they
Speaker 4: think it might be, then that increases the chance that
Speaker 4: things could drop further.
Speaker 2: Okay, fast the date I've got here. Last one was
Speaker 2: nineteenth of December for GDP figures. The next one's September.
Speaker 2: The next one's nineteenth of December.
Speaker 4: So what's the one that's out next.
Speaker 2: We'll check it, We'll check.
Speaker 4: Let's keep it.
Speaker 2: We haven't got to break it coming up, No, put
Speaker 2: that phone away, a Multiti if she thinks the Reserve
Speaker 2: Bank leader knows what he's doing under grant, especially that's
Speaker 2: from Duncan looks if it was Ashley Church, I know
Speaker 2: it did say he criticized the hell out of him.
Speaker 4: But yeah, I mean I think, and I mean it's
Speaker 4: easy to judge from this side, isn't it I've not
Speaker 4: been in his shoes. Hindsight, Yeah, benefit of hindsight. I mean,
Speaker 4: no one, no one has lived through a global pandemic before,
Speaker 4: so none of the central bank leaders around the world
Speaker 4: had lived through a global pandemic before. So I think
Speaker 4: it is challenging times. In hindsight we can say, I
Speaker 4: think he took too long to increase them, And in
Speaker 4: hindsight we can say, I think he took too long
Speaker 4: to start decreasing. But you know, you can only make
Speaker 4: your decisions on the day and be judged poorly for
Speaker 4: those decisions further down the track. We've all got the
Speaker 4: benefit of hindsight. And what's that saying, hindsight's always got
Speaker 4: twenty twenty vision exactly.
Speaker 2: Yeah, well, yeah, you're right. It is difficult because you
Speaker 2: just can't put yourself on what we were really saying
Speaker 2: before he took action.
Speaker 4: And to be fair, he's not making these decisions on
Speaker 4: his own, you know, so no one can just blame
Speaker 4: him for everything, and that we might like to.
Speaker 2: I think Debbie wants to Tim, what about that, Well,
Speaker 2: this is just a question on income for retirees, But
Speaker 2: what about the poor retiree with money and the MAC
Speaker 2: relying and topping up his pension with interest from investment.
Speaker 4: Rates exactly when interest rates and savings accounts go down,
Speaker 4: and that does affect people that are living off their
Speaker 4: interest on their savings. So you know, they've been doing
Speaker 4: pretty well with the higher interest rates. There's always a
Speaker 4: flip side, is that text?
Speaker 2: And it's right in a way though. If there is
Speaker 2: high interest rates, it means that also it's high inflation,
Speaker 2: so you might be getting more for your buck, but
Speaker 2: you're als having to spend more. So what if the
Speaker 2: interest rates for that means inflations come down. Does that
Speaker 2: mean it's not as dramatic as that text sounds or I.
Speaker 4: Don't no, I think it's I think it's tough. It's
Speaker 4: tough for retirees that are relying on savings. So you know,
Speaker 4: this is where key we save is a good idea
Speaker 4: because you know, and managed funds as well. Managed funds
Speaker 4: do tend to give a stronger return over the long
Speaker 4: term than savings accounts. Fixed term deposits at the moment
Speaker 4: are still pretty good, so you know, if you're looking
Speaker 4: at getting higher interest rates for the next five years,
Speaker 4: for example, long term fixed deposits, news for you By.
Speaker 2: The way, the announcement you're thinking about, which is sixteenth
Speaker 2: of October, which is Wednesday, is the inflation announced fact.
Speaker 4: I knew it was one of them. I knew it
Speaker 4: was one of them. I literally just talked about it.
Speaker 2: Right, We're going to take a break. You can give
Speaker 2: us your calls. Where are you happy with the reduction
Speaker 2: and the interest rate and how much further should it fall?
Speaker 2: With YOCA. We're also going to touch on just this
Speaker 2: bit of news that one person households have increased by
Speaker 2: one hundred and twenty thousand over the past decade, but
Speaker 2: only thirty percent of new builds are one or two bedrooms,
Speaker 2: and begs the question about what sort of property makes
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Speaker 1: Helping you to get on top of your busy life.
Speaker 1: Tim Beveridge on the Weekend Collector News Talk SETB.
Speaker 2: And my guest is from the property Apprentice, Debbie Roberts. Debbie,
Speaker 2: let's just quickly talk about the top sort of houses
Speaker 2: that are not being built or the increasing number of
Speaker 2: people just in one person residences. I mean, is there
Speaker 2: if you're an investor, I must admit I just sort
Speaker 2: of think without being an investor, I want definitely three
Speaker 2: bedrooms minimum. Is that why we're not really building a
Speaker 2: lot of one on two bedrooms or is there a
Speaker 2: space for movement there?
Speaker 4: I think there's definitely space for movement. With the changing demographics,
Speaker 4: you know, we are seeing more people living alone or
Speaker 4: just one or two people, and you know, one bedroom
Speaker 4: properties is more than enough for a lot of people,
Speaker 4: and it's certainly one way with developers building one and
Speaker 4: two bedroom properties. It's a way that we're going to
Speaker 4: see prices, you know, getting reasonable for first time buyers.
Speaker 4: Like first time buyers don't necessarily need a three bedroom
Speaker 4: house or want one.
Speaker 2: Of course, you're not going to get a house, are you.
Speaker 2: You're going to be getting a uni or own apartment?
Speaker 4: Well potentially, I.
Speaker 2: Mean who would. I mean, you wouldn't have a piece
Speaker 2: of land where you've got a house and you just go, no,
Speaker 2: let's just make it the one bedroom. Thanks, make it
Speaker 2: a big one. But it's just one.
Speaker 4: Exactly, I mean. And this is one of the reasons
Speaker 4: that the government's looking at introducing the granny flat, you know,
Speaker 4: the proposal where you can add an extra dwelling.
Speaker 2: The sixty square meter thing, yeah, exactly, that's a monster.
Speaker 4: Square meters is a decent size. The first property we
Speaker 4: purchased was an eighty square meter two bedroom house and
Speaker 4: we thought it was great. It was on four hundred
Speaker 4: square meters of land.
Speaker 2: What are the old workers cottages that Ponsibly used to
Speaker 2: be before it became the trendy place. They still are
Speaker 2: sort of that size, but they've just been spruced up
Speaker 2: a bit.
Speaker 4: Yeah, I don't know. I think it's good that the
Speaker 4: developers are starting to make you know, one in bedroom,
Speaker 4: one and two bedroom properties because it does give people
Speaker 4: a bit more choice. You know, not everyone wants to
Speaker 4: have borders or flatmates or to.
Speaker 2: Pay off the rent. Of course, you've just made a
Speaker 2: case for actually having a larger property because so well,
Speaker 2: now for that extra bedroom out.
Speaker 4: And potentially, yeah, but not everyone wants to do that.
Speaker 4: So and when it comes to buying investment properties, you
Speaker 4: need to think about what tenants in the area look
Speaker 4: for because so some areas there's no demand for one
Speaker 4: and two bedroom properties because they're multi generational families. They
Speaker 4: want to you know, they want five or six bedroom
Speaker 4: houses to rent all properties with a sleepout that you
Speaker 4: know that adult kids can live in. So it depends
Speaker 4: on the area that you're investing in. You wouldn't buy
Speaker 4: a five bedroom house in an area where there was
Speaker 4: demand for one bedroom and two bedroom properties.
Speaker 2: Because an vice, because I mean, they're still not building
Speaker 2: a lot of one or two bedroom places, are they,
Speaker 2: I mean, unless, of course it's retirement villages, which probably
Speaker 2: specialize in one or two bedrooms.
Speaker 4: Yeah, there's lots of townhouses that were built in the
Speaker 4: last couple of years that were one and two bedrooms.
Speaker 4: So yeah, and in some areas there's an oversupply of
Speaker 4: those in the rental market now. So you know you
Speaker 4: do it because a lot of them all came to
Speaker 4: the market at the same time. They all came at
Speaker 4: completion at the same time time everyone's looking for tenants
Speaker 4: for one and two bedroom property. So you do have
Speaker 4: to actually do some homework before you purchase an investment property.
Speaker 4: Not every property is a good investment.
Speaker 2: That actually is quite a good question we could probably
Speaker 2: explore another time as to how much how long it
Speaker 2: takes you to do your homework on because I mean,
Speaker 2: homeworker is a never ending, never any journey, really when
Speaker 2: it comes to understanding what the property market is. But
Speaker 2: if you were looking for an investment property, how much
Speaker 2: home would you need to do? It's that's probably what's
Speaker 2: why I've never done it. It just feels endless.
Speaker 4: It's probably the toughest decision that a new investor has
Speaker 4: to make, and that's where having some help along that
Speaker 4: journey can make things a little bit easier, you know.
Speaker 4: I mean, we've got access to a whole bunch of
Speaker 4: information that helps people make decisions and based on their
Speaker 4: financial position and how much they can borrow. There's so
Speaker 4: many different things that come into it.
Speaker 2: So, by the way, that when where were in the
Speaker 2: document that we put together for the show, and we've
Speaker 2: just got the summary of things around the number of
Speaker 2: households one hundred and twenty thousand, one person households over
Speaker 2: the past decade, and it says, but only thirty percent
Speaker 2: of new builds a one or two bedroom. I actually
Speaker 2: don't mind telling you, I'm surprised that it's as much
Speaker 2: as thirty percent, because I would have thought that's still
Speaker 2: the bulk of most construction requirements, unless it's just multi
Speaker 2: story apartments, I guess, but a lot of the investment
Speaker 2: would still be in people building three bedroom homes or
Speaker 2: not all three or four bedroom I don't know.
Speaker 4: If you look around Auckland and look around christ Church,
Speaker 4: there's a whole bunch of one and two bedroom properties
Speaker 4: being built.
Speaker 2: So would you invest in a one or two bedroom property.
Speaker 4: If there was demand from tenants? There? Absolutely?
Speaker 2: And how would you work out a first demand from
Speaker 2: tenants there?
Speaker 4: Took to a good property manager in the area. They
Speaker 4: know what people are looking for.
Speaker 2: I think we might have to save that question about
Speaker 2: how much homework you need to do because a lot
Speaker 2: of people who listen to a show like this, you know,
Speaker 2: there'll be people who've got an active interest in investment,
Speaker 2: but there are people probably like me you who have
Speaker 2: thought one need to do it at some stage. You
Speaker 2: need to do it at some stage, but really haven't
Speaker 2: got beyond I mean, I do a property show every week,
Speaker 2: but haven't got beyond that sort of skirting around the
Speaker 2: edges and knowing a little bit about nothing, well a
Speaker 2: lot about very little bit, you know what I mean?
Speaker 2: And actually how much due diligence you really need to
Speaker 2: do on that journey to buying that first investment property.
Speaker 4: So I mean there is quite a few things that
Speaker 4: you need to check out to make sure that you're
Speaker 4: not buying a lemon. So like a building inspection. You know,
Speaker 4: once you've got a property under contract, you've got to
Speaker 4: do a building inspection in my opinion, even if it's
Speaker 4: a new build, get drug tests done if you're going
Speaker 4: to rent it out.
Speaker 2: Well, that's just a checklist on practicality, forgetting the money,
Speaker 2: forgetting the actual whole investment equation and prediction.
Speaker 4: I mean investing in properties, not rocket science. This is
Speaker 4: the thing, but it's like most people don't know how
Speaker 4: to do it because they've never done it before.
Speaker 2: And that's where a property apprentice comes in, of course. Yeah. Actually,
Speaker 2: just few texts before we head to the break High
Speaker 2: to Mike Blackburn, hair, I write, I think it might
Speaker 2: be wrote, I write the Canterbory construction report. Here in
Speaker 2: christ Churche, approximately seventy percent of all new dwellings consented
Speaker 2: are smaller multi units with an average floor size of
Speaker 2: eighty six square meters. Okay, that's good. I wonder what
Speaker 2: amongst those smaller units. I keep on thinking it's just
Speaker 2: retirement villagers. Actually only because I've seen a few retirement
Speaker 2: villages when I'm down there getting built and I think, gosh,
Speaker 2: that's expanding.
Speaker 4: You know, a lot of the new builds have been
Speaker 4: targeting property investors because you know, with the previous government,
Speaker 4: obviously new builds had tax benefits for property investors if
Speaker 4: they were new build versus existing. So that's all changed now.
Speaker 4: You know, those tax benefits for new build over existing
Speaker 4: is disappearing quickly. So yeah, these I think things are
Speaker 4: going to get a lot more stable in the investment market,
Speaker 4: but certainly some areas have gotten over supply for rental properties.
Speaker 2: Right, We're gonna take a quick break, come back and
Speaker 2: just to take the one roof property of the week.
Speaker 2: As next it's ten minutes to five news talks. He'd be.
Speaker 3: A honey bug.
Speaker 2: Maybe under you take nowhere and welcome back to the
Speaker 2: Weekend Collective. I'm Tim Beverage. My guest is DeBie Roberts
Speaker 2: from Property Prentice. That is Property Apprentice dot co dot Nz.
Speaker 2: Right now it is just gone seven minutes to five.
Speaker 1: The one roof property of the week on the Weekend Collective.
Speaker 2: Yes, the one roof property of the week is They're
Speaker 2: always gorgeous, so I'm not gonna repeat myself. It is
Speaker 2: so go and have a look for this on the
Speaker 2: one Roof website One roof dot co dot Nz. It's
Speaker 2: thirty three c Titty Mowana Terrace on a Keywa in Marlborough.
Speaker 2: The asking price is, I mean, it's a lot of money,
Speaker 2: but it's not a lot of money for Auckland people.
Speaker 2: Nine hundred and thirty thousand dollars. Although it's one bedroom,
Speaker 2: one bedroom, one bathroom, two car covered shed. Actually it's
Speaker 2: the shed I quite like. It's got a nice collection
Speaker 2: of firewood in there. It's situated on a prime ridge
Speaker 2: line overlooking the expanse of un Keywa area and it's
Speaker 2: a charming home offering incredible views down the length of
Speaker 2: Queen Charlotte sound gorgeous lookout at The completely off grid
Speaker 2: property features a new solar power system, clear water septic
Speaker 2: system and a new backup generator and it's described as
Speaker 2: being low maintenance, ideal for both holiday retreats and permanent living.
Speaker 2: Probably more off the grid for permanent living than I fancy,
Speaker 2: but DeBie. We share our probably the week with my
Speaker 2: guess and Debbie Roberts. It is a I mean, picturesque,
Speaker 2: gorgeous isn't it beautiful view?
Speaker 4: And it's on thirty two point four two hectares, so
Speaker 4: you know, if you don't want to live in the
Speaker 4: tiny little house that's there at the moment, build something.
Speaker 2: Yeah, it is gorgeous look and obviously the photography is
Speaker 2: done on a beautiful day. But down to them and
Speaker 2: the sounds, you just can't beat it. They do have
Speaker 2: looks like a bath that might be heated up heat,
Speaker 2: might be heated up by fire, one of those things
Speaker 2: that looks good in a brochure. But I'm not sure
Speaker 2: I every want to go to the chore of lighting
Speaker 2: it and boiling myself alive.
Speaker 4: It looks pretty secluded that bath, though, yes.
Speaker 2: It does well. It's just as well because generally when
Speaker 2: one is in the bath, one is nudies generally.
Speaker 1: Yes.
Speaker 2: Anyway, Hey, hey did it ever? Quick text? Somebody's just
Speaker 2: asking why they still stress testing at nine percent? Any
Speaker 2: comments on that?
Speaker 4: Oh, so stress tests are definitely coming down. So most
Speaker 4: of the banks are now stress testing between eight and
Speaker 4: eight and a half percent now, so yeah, it's definitely
Speaker 4: getting easier. But you know, a couple of weeks ago
Speaker 4: it was eight point five to eight point seventy five
Speaker 4: stress tests. So yeah, it's definitely definitely coming down.
Speaker 2: And just once again, by the way, if you if
Speaker 2: you want to check out that property of one with
Speaker 2: probably the week I'm still grazing through the photos of
Speaker 2: a little bit thirty three C two Mowana terracet Anakiwa,
Speaker 2: Marlborough and Debbie. Nice to see you. Good to know
Speaker 2: you're working hard and keeping yourself busy.
Speaker 4: Keeping out of trouble.
Speaker 2: Yep, we'll catch you again. Okay. If you've missed any
Speaker 2: of the previous hour discussion about the ocr and smaller dwellings,
Speaker 2: go and check out the podcast. Look for the Weekend
Speaker 2: Collective on iHeartRadio. We'll be back very shortly. The Parents
Speaker 2: Squad Catherine Burkitt's with us and how far you know
Speaker 2: the term is starting tomorrow. Kids are going to be
Speaker 2: into the study pretty soon. Do you need to ride
Speaker 2: them and nag them to get there, do their homework
Speaker 2: and their study? You just leave them to make their
Speaker 2: own mistakes. We'll be talking about that in the Parents
Speaker 2: Squad very shortly. News Talks.
Speaker 3: He'd be.
Speaker 1: For more from the Weekend Collective. Listen live to news Talks.
Speaker 1: It'd be weekends from three pm, or follow the podcast
Speaker 1: on iHeartRadio