1 00:00:09,093 --> 00:00:12,693 Speaker 1: You're listening to a podcast from News Talks Be follow 2 00:00:12,773 --> 00:00:16,133 Speaker 1: this and our wide range of podcasts now on iHeartRadio. 3 00:00:16,692 --> 00:00:19,293 Speaker 2: Do we need to break our lover fear with property? 4 00:00:19,332 --> 00:00:22,172 Speaker 2: Jeremy Williamson here to Private Wealth and Markets at Craig's 5 00:00:22,173 --> 00:00:25,372 Speaker 2: Investment Partners reacons we should be investing in assets that 6 00:00:25,493 --> 00:00:32,133 Speaker 2: actually grow the economy, and he joins us now afternoon, Jeremy, Hey, guys, Hey, Jeremy, why. 7 00:00:31,853 --> 00:00:34,412 Speaker 3: Do key we still love property so much even when 8 00:00:34,453 --> 00:00:36,933 Speaker 3: the returns aren't what they used to be. 9 00:00:38,133 --> 00:00:42,893 Speaker 4: I keep asking myself the same. Look. I think there's 10 00:00:42,893 --> 00:00:44,173 Speaker 4: a couple of parts to it, guys. 11 00:00:44,213 --> 00:00:48,653 Speaker 5: I think kiwi's they love what they can see and 12 00:00:48,732 --> 00:00:51,933 Speaker 5: tangible assets, and we look, we all know that we 13 00:00:52,013 --> 00:00:58,053 Speaker 5: can touch an investment property it stands, it's relatively transparent 14 00:00:58,173 --> 00:00:59,653 Speaker 5: in terms of how it's valued. 15 00:01:00,773 --> 00:01:03,453 Speaker 4: And I think the other thing is access to borrowing. 16 00:01:04,333 --> 00:01:07,853 Speaker 5: So it's very hard for a lot of a lot 17 00:01:07,893 --> 00:01:10,373 Speaker 5: of kiwis to get access to borrowing, and mortgaging the 18 00:01:10,413 --> 00:01:14,573 Speaker 5: houses is a way to do it. And maybe if 19 00:01:14,613 --> 00:01:17,733 Speaker 5: we go back a few decades, back to the back 20 00:01:17,733 --> 00:01:20,813 Speaker 5: into the eighties, there for a lot of for a 21 00:01:20,813 --> 00:01:23,693 Speaker 5: lot of older kiwis there was a difficult period in 22 00:01:23,733 --> 00:01:26,213 Speaker 5: the ship market around the eighty seven crash, So I 23 00:01:26,253 --> 00:01:29,373 Speaker 5: think it's a whole lot of that stuff that has 24 00:01:29,413 --> 00:01:32,413 Speaker 5: affected the national psyche. And I think it's time to 25 00:01:32,413 --> 00:01:36,333 Speaker 5: have a conversation around around well, what can we do 26 00:01:36,413 --> 00:01:39,613 Speaker 5: for the betterment of Kiwis and the next generation? And 27 00:01:39,693 --> 00:01:43,133 Speaker 5: I think our disposition towards property investment's got a part 28 00:01:43,212 --> 00:01:43,612 Speaker 5: to play. 29 00:01:44,533 --> 00:01:48,773 Speaker 3: Are you talking about second properties and investment properties? Because 30 00:01:48,773 --> 00:01:53,333 Speaker 3: of course your first house has more than a financial investment, 31 00:01:53,333 --> 00:01:55,853 Speaker 3: and it's an emotional investment. It's a piece of the country. 32 00:01:55,893 --> 00:02:00,253 Speaker 3: It's it's you know, something solid. It's the ability to, 33 00:02:00,813 --> 00:02:02,373 Speaker 3: I don't know, knock out a wall with a sledd 34 00:02:02,413 --> 00:02:05,173 Speaker 3: chamber if you if you want to. So are you 35 00:02:05,213 --> 00:02:09,333 Speaker 3: talking about moving that investment away from you know, from 36 00:02:09,373 --> 00:02:12,333 Speaker 3: when as a financial investment? Or do you think people 37 00:02:12,373 --> 00:02:15,053 Speaker 3: should give up on the family home in the first place. 38 00:02:15,933 --> 00:02:18,773 Speaker 5: No, I'm in the ladder camp, and you know, for 39 00:02:18,813 --> 00:02:22,132 Speaker 5: a lot of Kiwis, the family home sacrisanct and you 40 00:02:22,213 --> 00:02:25,573 Speaker 5: know we all feel like that, don't we. It's more 41 00:02:25,613 --> 00:02:29,333 Speaker 5: the second and third and fourth homes, the investment properties, 42 00:02:29,853 --> 00:02:32,853 Speaker 5: all that stuff. I think it's time to have a 43 00:02:32,893 --> 00:02:37,493 Speaker 5: conversation nationally around what is that actually doing? And I 44 00:02:37,532 --> 00:02:39,533 Speaker 5: think of you know, when your kids playing past the 45 00:02:39,573 --> 00:02:43,972 Speaker 5: parcel and trading and buying and selling investment. 46 00:02:43,532 --> 00:02:44,532 Speaker 4: Properties to each other. 47 00:02:44,573 --> 00:02:46,693 Speaker 5: Feels a bit like that to me, where you know, 48 00:02:46,773 --> 00:02:48,893 Speaker 5: you take a twenty dollar notes, you pass it around 49 00:02:48,972 --> 00:02:51,293 Speaker 5: the circle, it still comes back as a twenty dollar note, 50 00:02:51,293 --> 00:02:55,453 Speaker 5: doesn't it. I feel like the love affair we have 51 00:02:55,613 --> 00:02:59,493 Speaker 5: with investment property has the same sort of thing to it. 52 00:03:00,133 --> 00:03:02,453 Speaker 2: A lot of people will be hearing that, Jeremy and 53 00:03:02,933 --> 00:03:06,373 Speaker 2: thinking it's quite altruistic a statement from yourself that we 54 00:03:06,453 --> 00:03:09,572 Speaker 2: do what's good for the country than ourselves. And I 55 00:03:09,613 --> 00:03:11,213 Speaker 2: think what you say is a lot of logic to it. 56 00:03:11,252 --> 00:03:12,813 Speaker 2: But you get what I'm saying. A lot of people 57 00:03:13,173 --> 00:03:16,013 Speaker 2: are their their primary focus is what is going to 58 00:03:16,013 --> 00:03:18,692 Speaker 2: build wealth for them and their family and hopefully something 59 00:03:18,733 --> 00:03:20,893 Speaker 2: to hand down to their kids and for them, property 60 00:03:20,972 --> 00:03:22,252 Speaker 2: still feels like the way to go. 61 00:03:23,293 --> 00:03:25,692 Speaker 5: Yeah, and I can understand that. I mean, that's that's 62 00:03:25,733 --> 00:03:29,413 Speaker 5: that's an equally valid view as well. I guess I'll 63 00:03:29,493 --> 00:03:31,213 Speaker 5: take it up a few levels, and you think of 64 00:03:31,252 --> 00:03:34,853 Speaker 5: it from a national point of view, if we were 65 00:03:34,893 --> 00:03:37,653 Speaker 5: to if we were to have a national conversation and 66 00:03:38,013 --> 00:03:39,333 Speaker 5: move just the dial slightly. 67 00:03:39,413 --> 00:03:41,213 Speaker 4: I mean, I'm not sitting here saying let's all get 68 00:03:41,253 --> 00:03:42,293 Speaker 4: out of property. 69 00:03:42,573 --> 00:03:44,693 Speaker 5: It's not where I'm coming from. Where I'm coming from. 70 00:03:45,213 --> 00:03:47,732 Speaker 5: If we move the dial slightly and put a bit 71 00:03:47,813 --> 00:03:54,373 Speaker 5: more of that investment property capital into productive assets, grow 72 00:03:54,413 --> 00:03:58,533 Speaker 5: the economy, grow productivity, create more jobs for the next 73 00:03:58,613 --> 00:04:01,733 Speaker 5: generation of kids coming along, and take a bit of 74 00:04:01,773 --> 00:04:05,732 Speaker 5: heat out of property prices generally. Because I think inequality 75 00:04:05,773 --> 00:04:08,613 Speaker 5: is a bit of a conversation we're having national at 76 00:04:08,613 --> 00:04:13,293 Speaker 5: the moment, and over allocating to property as a country, 77 00:04:13,333 --> 00:04:16,613 Speaker 5: I think it has a part to play in equality 78 00:04:16,653 --> 00:04:17,053 Speaker 5: as well. 79 00:04:17,173 --> 00:04:19,213 Speaker 3: So how much we're talking how much of a dial 80 00:04:19,293 --> 00:04:22,493 Speaker 3: shift do you think would make a material difference to 81 00:04:22,493 --> 00:04:23,253 Speaker 3: to our economy. 82 00:04:24,133 --> 00:04:26,413 Speaker 4: Oh look, I want to crunch the numbers in my 83 00:04:26,453 --> 00:04:28,533 Speaker 4: own head. But if I was to have a stab at. 84 00:04:28,413 --> 00:04:32,933 Speaker 5: It and put me on this rightly, roughly roughly, Look, 85 00:04:34,213 --> 00:04:36,373 Speaker 5: I won't put my life on it, But what I'll 86 00:04:36,413 --> 00:04:38,813 Speaker 5: say is I'm talking a couple of percentage points, you know, 87 00:04:39,013 --> 00:04:42,013 Speaker 5: up to maybe two, three, four, five percent would make 88 00:04:42,013 --> 00:04:45,333 Speaker 5: a huge difference. You know, we think about our investment 89 00:04:46,093 --> 00:04:49,453 Speaker 5: and housing generally, and investment properties and New Zealand residentially. 90 00:04:49,893 --> 00:04:51,733 Speaker 5: I think the number is something like one point six 91 00:04:51,813 --> 00:04:54,693 Speaker 5: one point seven trillion. So that's a big number. And 92 00:04:54,773 --> 00:04:58,053 Speaker 5: if you break it down into a little bite sized pieces, 93 00:04:58,653 --> 00:05:01,773 Speaker 5: a few percentage points could make a big difference in 94 00:05:01,853 --> 00:05:05,093 Speaker 5: terms of that capital going into this productive assets. So yeah, 95 00:05:05,093 --> 00:05:07,573 Speaker 5: I'm certainly not sitting here saying let's let's run for 96 00:05:07,613 --> 00:05:10,373 Speaker 5: the hills from proper. I just think that's that the 97 00:05:10,413 --> 00:05:12,773 Speaker 5: conversation is starting to shift around how we turn the 98 00:05:12,813 --> 00:05:13,773 Speaker 5: dial just a little bit. 99 00:05:14,133 --> 00:05:16,973 Speaker 3: You kind of touch this on this before, but as 100 00:05:16,973 --> 00:05:19,333 Speaker 3: this text, a bend says, you can't borrow five hundred 101 00:05:19,373 --> 00:05:22,133 Speaker 3: k and buy shares and make four to six on 102 00:05:22,173 --> 00:05:24,013 Speaker 3: that five hundred k. If you went into a band 103 00:05:24,093 --> 00:05:26,693 Speaker 3: and see ed, look I've got this portfolio I want 104 00:05:26,733 --> 00:05:29,413 Speaker 3: to buy. Can you can you give me a mortgage? 105 00:05:29,893 --> 00:05:31,933 Speaker 3: They're probably going to say get out, aren't they? 106 00:05:32,853 --> 00:05:34,333 Speaker 4: Yeah, they are. But I think it goes back to 107 00:05:34,413 --> 00:05:35,493 Speaker 4: the earlier point, doesn't it. 108 00:05:35,533 --> 00:05:38,533 Speaker 5: I mean the family house being sacrosanct to New Zealanders 109 00:05:40,013 --> 00:05:44,853 Speaker 5: and maintaining that culture and getting access towards towards some 110 00:05:44,973 --> 00:05:48,693 Speaker 5: borrowings that way, to whether they have that personal decision 111 00:05:48,733 --> 00:05:51,613 Speaker 5: to put some of that borrowing into other asset classes. 112 00:05:51,773 --> 00:05:54,813 Speaker 5: But you know, my conversation, what I'm thinking about is 113 00:05:54,813 --> 00:05:57,933 Speaker 5: more around that second second third and those sort of 114 00:05:57,973 --> 00:06:01,413 Speaker 5: investment properties. But yeah, there's no doubt that the family 115 00:06:01,453 --> 00:06:05,333 Speaker 5: home sacrisanct creates memories. It's a place for the family 116 00:06:05,373 --> 00:06:08,173 Speaker 5: to be and also can can help with some access 117 00:06:08,173 --> 00:06:09,213 Speaker 5: toge We're. 118 00:06:09,093 --> 00:06:11,773 Speaker 3: Talking to Jeremy Williamson, head of Private Wealth and Markets 119 00:06:11,773 --> 00:06:14,813 Speaker 3: at Craig's Investment Partners. Now, you mentioned the eighty seven crash, 120 00:06:14,853 --> 00:06:18,013 Speaker 3: and we all know that the country went crazy for 121 00:06:18,093 --> 00:06:21,493 Speaker 3: stocks after the Longe government came in eighty four. There 122 00:06:21,533 --> 00:06:23,213 Speaker 3: was this huge boon and then a lot of people 123 00:06:23,253 --> 00:06:25,533 Speaker 3: got burned, and it felt like there was a cultural 124 00:06:25,613 --> 00:06:29,373 Speaker 3: fear that spread through the nation against the shear market, 125 00:06:30,053 --> 00:06:32,293 Speaker 3: and that was pointed out as a moment when people 126 00:06:32,333 --> 00:06:35,773 Speaker 3: moved heavily into property because they thought it was less riskier. 127 00:06:36,493 --> 00:06:40,413 Speaker 3: How fair is that view now that property is less 128 00:06:40,533 --> 00:06:43,533 Speaker 3: risky than a second property is less risky than the 129 00:06:43,533 --> 00:06:44,693 Speaker 3: shear market, for example. 130 00:06:45,573 --> 00:06:47,253 Speaker 5: Yeah, Well, I guess for how I look at that 131 00:06:47,453 --> 00:06:48,773 Speaker 5: is to sort of look at it the other way. 132 00:06:48,893 --> 00:06:53,373 Speaker 5: And back in the eighties, the share market was dominated 133 00:06:53,373 --> 00:06:54,653 Speaker 5: by investment companies. 134 00:06:54,973 --> 00:06:56,493 Speaker 4: The companies set up to invest in. 135 00:06:56,533 --> 00:07:00,293 Speaker 5: Small pieces of other companies that would invest in small 136 00:07:00,293 --> 00:07:03,933 Speaker 5: pieces of other companies. So it was it felt like 137 00:07:04,933 --> 00:07:07,653 Speaker 5: a little bit of a house of cards. I contrast 138 00:07:07,693 --> 00:07:10,773 Speaker 5: it today. You look at listed the listed market here 139 00:07:10,773 --> 00:07:14,253 Speaker 5: in New Zealand. It's full of productive companies that actually 140 00:07:14,373 --> 00:07:19,733 Speaker 5: do things. They export, they create, create create jobs, they 141 00:07:19,813 --> 00:07:21,973 Speaker 5: pay their taxes and they're doing great for New Zealand. 142 00:07:22,493 --> 00:07:25,893 Speaker 5: I think of the companies like Fisher and Pigirl Healthcare. 143 00:07:26,293 --> 00:07:29,653 Speaker 5: So I think it's changed. I think it's changed dramatically, 144 00:07:29,773 --> 00:07:32,253 Speaker 5: but you know, I appreciate there'll be some around that go. 145 00:07:32,733 --> 00:07:34,133 Speaker 4: You know, I had that bad, bad. 146 00:07:33,973 --> 00:07:37,093 Speaker 5: Experience in the eighties and and bricks and mortar feels 147 00:07:37,093 --> 00:07:37,653 Speaker 5: safer to make. 148 00:07:38,173 --> 00:07:41,293 Speaker 3: So if that's the case, do you reckon that the 149 00:07:41,333 --> 00:07:43,813 Speaker 3: tax system needs sort of a shake up to get 150 00:07:43,853 --> 00:07:47,613 Speaker 3: people looking beyond property if people are still nervous and 151 00:07:47,853 --> 00:07:49,373 Speaker 3: as you say, it's good for the company if we 152 00:07:49,413 --> 00:07:54,853 Speaker 3: start investing in and things that employee people, and you know, 153 00:07:55,693 --> 00:07:58,013 Speaker 3: in New Zealand companies. Do you think that that a 154 00:07:58,253 --> 00:08:01,093 Speaker 3: change to the tax system could could Yeah. 155 00:08:00,893 --> 00:08:01,253 Speaker 4: It could do. 156 00:08:01,293 --> 00:08:03,173 Speaker 5: I mean, I think it's worth thinking about isn't it. 157 00:08:03,253 --> 00:08:06,693 Speaker 5: And generally what you what you find with the taxation 158 00:08:06,853 --> 00:08:10,253 Speaker 5: system in life generally is that you know, incentives to 159 00:08:10,293 --> 00:08:13,773 Speaker 5: get into into things that are good for good for 160 00:08:13,813 --> 00:08:15,253 Speaker 5: the economy. 161 00:08:14,813 --> 00:08:15,413 Speaker 4: Tend to work. 162 00:08:16,693 --> 00:08:19,373 Speaker 5: You know, I'm known tax tax expert and not a 163 00:08:19,413 --> 00:08:21,693 Speaker 5: favor with all the tax settings of course, but I 164 00:08:21,693 --> 00:08:23,853 Speaker 5: think it's it's a good time to think about all 165 00:08:23,893 --> 00:08:24,693 Speaker 5: that sort of stuff. 166 00:08:25,293 --> 00:08:27,493 Speaker 3: And we hear that young people are locked out of 167 00:08:27,533 --> 00:08:31,653 Speaker 3: the property market, So are they just naturally moving away 168 00:08:31,693 --> 00:08:34,732 Speaker 3: from property? Will this just just change over time as 169 00:08:34,773 --> 00:08:37,933 Speaker 3: it becomes impossible for young people to get into property. 170 00:08:38,013 --> 00:08:40,173 Speaker 3: So they're like, now I'll have it all at bitcoin. 171 00:08:41,973 --> 00:08:44,333 Speaker 5: Yeah, it's a question I'll get us all the time. 172 00:08:44,573 --> 00:08:47,533 Speaker 5: When you look at offshore, I mean we've been a 173 00:08:47,612 --> 00:08:52,613 Speaker 5: property ownership for our primary domicile. Owning that prominent primary 174 00:08:52,653 --> 00:08:55,732 Speaker 5: domicile has been an important part of keepa culture you 175 00:08:55,773 --> 00:08:58,413 Speaker 5: know offshore. You know, in the European some of the 176 00:08:58,413 --> 00:09:02,412 Speaker 5: European countries, you know, renting is something that is far 177 00:09:02,492 --> 00:09:05,412 Speaker 5: more normal with a higher prevalence rate, So you know, 178 00:09:05,533 --> 00:09:06,612 Speaker 5: maybe it goes that way. 179 00:09:07,012 --> 00:09:08,013 Speaker 4: You know what what we. 180 00:09:07,933 --> 00:09:10,372 Speaker 5: See a are now our business at at Craigs there's 181 00:09:10,413 --> 00:09:13,933 Speaker 5: a lot of young people getting into the share market 182 00:09:14,492 --> 00:09:17,093 Speaker 5: and that's exciting and good luck to them. 183 00:09:17,533 --> 00:09:19,853 Speaker 2: Jeremy, it's been great chatting with you. It's an interesting 184 00:09:19,892 --> 00:09:22,132 Speaker 2: discussion and we're looking forward to see what our talkback 185 00:09:22,173 --> 00:09:23,132 Speaker 2: callers have got to say. 186 00:09:23,413 --> 00:09:25,613 Speaker 4: But thank you very much for your time, pleasure, thanks 187 00:09:25,612 --> 00:09:26,053 Speaker 4: for having me. 188 00:09:26,093 --> 00:09:28,173 Speaker 2: That is Jeremy Williamson, the head of Private Wealth and 189 00:09:28,213 --> 00:09:30,372 Speaker 2: Markets at Craig's Investment Partners. 190 00:09:30,813 --> 00:09:33,453 Speaker 1: For more from News Talks at B listen live on 191 00:09:33,533 --> 00:09:36,492 Speaker 1: air or online, and keep our shows with you wherever 192 00:09:36,533 --> 00:09:39,133 Speaker 1: you go with our podcasts on iHeartRadio