1 00:00:00,200 --> 00:00:02,320 Speaker 1: As we've discussed, the Reserve Bank isn't saying very much 2 00:00:02,320 --> 00:00:04,240 Speaker 1: and when we're finally going to see the interest rates fall, 3 00:00:04,400 --> 00:00:07,040 Speaker 1: but mortgage holders are betting they're going to fall this year. 4 00:00:07,120 --> 00:00:09,840 Speaker 1: Jane Tibshradi is The Herald's Wellington Business editor and with 5 00:00:09,920 --> 00:00:12,560 Speaker 1: us agana Hey Heather, so what are you seeing that 6 00:00:12,600 --> 00:00:14,120 Speaker 1: indicates their betting on this year? 7 00:00:14,960 --> 00:00:17,960 Speaker 2: So the Reserve Bank releases quite a bit of interesting data. 8 00:00:18,480 --> 00:00:23,319 Speaker 2: One of the data sets that released recently shows that 9 00:00:24,000 --> 00:00:28,360 Speaker 2: about seventeen percent of the new mortgages that banks wrote 10 00:00:28,440 --> 00:00:32,320 Speaker 2: in May went to people who fixed for six months. 11 00:00:33,360 --> 00:00:36,320 Speaker 2: So that was quite an increase from what we've seen previously. 12 00:00:36,440 --> 00:00:41,360 Speaker 2: So basically, proportionally proportionately, a lot more of the new 13 00:00:41,400 --> 00:00:46,479 Speaker 2: mortgage lending was going to people fixing for relatively short periods, 14 00:00:46,560 --> 00:00:49,920 Speaker 2: so that seventeen percent for owner occupiers. For investors it 15 00:00:50,000 --> 00:00:53,440 Speaker 2: was even higher at twenty two percent, quite a big 16 00:00:53,560 --> 00:00:57,560 Speaker 2: jump from where it had been. Now. I should say 17 00:00:57,600 --> 00:00:59,800 Speaker 2: that fixing for a year is still by far the 18 00:00:59,760 --> 00:01:02,960 Speaker 2: more popular option, and it has been for some time, 19 00:01:03,400 --> 00:01:06,920 Speaker 2: but I think it is interesting that in May, you know, 20 00:01:07,680 --> 00:01:10,399 Speaker 2: fairly significant number of people thought to fix for six 21 00:01:10,440 --> 00:01:13,480 Speaker 2: months and that was despite the Reserve Bank at that 22 00:01:13,680 --> 00:01:17,520 Speaker 2: time suggesting that it would only cut the OCR in 23 00:01:17,600 --> 00:01:19,160 Speaker 2: around August next year. 24 00:01:19,880 --> 00:01:22,800 Speaker 1: Now today, I probably have not actually underscored this enough 25 00:01:22,840 --> 00:01:25,720 Speaker 1: on the show this evening, but what has just happened 26 00:01:25,720 --> 00:01:28,360 Speaker 1: from the Reserve Bank is a massive change in tone. Right. 27 00:01:28,400 --> 00:01:31,759 Speaker 1: They have gone from being like really hawkish to really 28 00:01:31,800 --> 00:01:34,920 Speaker 1: dubvish in the space of two announcements, haven't they. 29 00:01:35,480 --> 00:01:38,600 Speaker 2: Yeah. Look, I thought it was a significant pivot from 30 00:01:38,680 --> 00:01:43,080 Speaker 2: as you say, surprisingly hawkish to surprisingly dubvish in quite 31 00:01:43,120 --> 00:01:47,920 Speaker 2: a short space of time. Interestingly, without any new inflation 32 00:01:48,040 --> 00:01:51,279 Speaker 2: figures in that period that the Reserve Bank has changed 33 00:01:51,280 --> 00:01:54,280 Speaker 2: its view. So the Reserve Bank currently only has inflation 34 00:01:54,360 --> 00:01:57,680 Speaker 2: figures for the March quarter as it did back in May. 35 00:01:58,000 --> 00:02:01,800 Speaker 2: I thought that the change was notable. It was a pivot. 36 00:02:02,760 --> 00:02:06,280 Speaker 2: Sharon Zolna from A and Z, who I talked to previously, thought, yeah, 37 00:02:06,280 --> 00:02:11,000 Speaker 2: it's a change of tone, but it's not too drastic. Look, 38 00:02:11,040 --> 00:02:15,360 Speaker 2: I think the new inflation figures for the June quarter, 39 00:02:15,400 --> 00:02:18,880 Speaker 2: which are out next week, will be the ones to watch. Yeah, right, 40 00:02:19,000 --> 00:02:21,359 Speaker 2: like if that, if they if they come in showing 41 00:02:21,400 --> 00:02:24,640 Speaker 2: the inflation is actually falling quite a bit. You know, 42 00:02:24,680 --> 00:02:27,480 Speaker 2: I think we could see see rate cuts soon. I 43 00:02:27,520 --> 00:02:31,120 Speaker 2: think the Reserve Bank previously suggesting that the first cut 44 00:02:31,160 --> 00:02:34,080 Speaker 2: would be in August next year is now, you know, 45 00:02:34,520 --> 00:02:36,720 Speaker 2: totally an outdated view. 46 00:02:36,840 --> 00:02:39,799 Speaker 1: Is it possible that somebody like Sharon Zolner says it's 47 00:02:39,800 --> 00:02:42,640 Speaker 1: not a massive pivot because nobody believed them when they 48 00:02:42,639 --> 00:02:44,400 Speaker 1: were being that hawkish anyway. 49 00:02:44,880 --> 00:02:48,400 Speaker 2: Yeah, look, that is interesting markets in particular, it didn't 50 00:02:48,400 --> 00:02:51,920 Speaker 2: believe the Reserve Bank at all. Economists were a little 51 00:02:51,919 --> 00:02:56,840 Speaker 2: bit more balanced, and you know, now today's statement really 52 00:02:56,880 --> 00:03:00,480 Speaker 2: has given markets the evidence they were looking for to 53 00:03:01,360 --> 00:03:05,240 Speaker 2: price in rate cuts soon. My understanding is that the 54 00:03:05,280 --> 00:03:08,880 Speaker 2: pricing is such that markets, you know, there is a 55 00:03:09,000 --> 00:03:12,160 Speaker 2: chance that you know, some people think there's a chance 56 00:03:12,200 --> 00:03:15,200 Speaker 2: that the first cut could even come in August, but 57 00:03:15,280 --> 00:03:19,160 Speaker 2: most economists are now still picking November. I think if 58 00:03:19,200 --> 00:03:21,720 Speaker 2: you take a step back, this is all pretty confusing 59 00:03:21,960 --> 00:03:24,200 Speaker 2: for your average person trying to figure out how to 60 00:03:24,200 --> 00:03:27,000 Speaker 2: fix their mortgage or what to do with their term deposits, 61 00:03:27,040 --> 00:03:29,600 Speaker 2: because we've had, you know, quite a few different views 62 00:03:29,639 --> 00:03:32,679 Speaker 2: come out within the past few weeks. But what I 63 00:03:32,720 --> 00:03:36,720 Speaker 2: would say is interest rate cuts now seem like they 64 00:03:36,760 --> 00:03:40,960 Speaker 2: could happen sooner than we thought two months ago, and 65 00:03:41,160 --> 00:03:44,839 Speaker 2: the chance of a hike is probably now no longer there. 66 00:03:45,000 --> 00:03:46,960 Speaker 1: Yeah, hey, Jena, thank you very much. Really appreciate you 67 00:03:47,040 --> 00:03:50,360 Speaker 1: talking us through that genetive training. Harold's Wellington Business Editor. 68 00:03:51,160 --> 00:03:54,320 Speaker 1: For more from Heather Duplessy Allen Drive, listen live to 69 00:03:54,440 --> 00:03:57,440 Speaker 1: news talks. It'd be from four pm weekdays, or follow 70 00:03:57,480 --> 00:03:59,240 Speaker 1: the podcast on iHeartRadio.