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Speaker 1: At the same time, congratulations, homeowners. House prices in our

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Speaker 1: biggest cities are also falling. This is according to the

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Speaker 1: latest Real Estate Institute figures. The median house prices in Wellington,

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Speaker 1: Auckland and christ Church respectively have decreased in June. Nationwide

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Speaker 1: medium price for a house seven hundred and seventy thousand,

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Speaker 1: exactly the same as it was in June last year.

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Speaker 1: Ashley Church is a property commentator and is with us now, Hey, Esley,

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Speaker 1: get it?

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Speaker 2: Ryan?

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Speaker 1: Jeez?

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Speaker 2: Yeah.

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Speaker 1: Not not great news, is it, especially for the big

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Speaker 1: cities when you're wanting when you want to feel a

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Speaker 1: bit rich.

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Speaker 2: Yeah, it's interesting, isn't it. So? I think probably the

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Speaker 2: important thing here is not to fixate on the on

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Speaker 2: the numbers on a month, month, or even at the moment,

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Speaker 2: on an annual basis. It's probably worth more looking at

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Speaker 2: the causes of this and what's likely to change over

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Speaker 2: the next little world. So the causes are pretty well

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Speaker 2: known and trumpeted. This goes back to twenty twenty twenty

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Speaker 2: one in that massive drop in interest rates as a

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Speaker 2: result of the OCA being dropped by the Reserve Bank

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Speaker 2: at the time, overshooting the mark and effectively creating our

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Speaker 2: housing boom push prices up way beyond where they might

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Speaker 2: have been expected to go under a normal cycle. And

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Speaker 2: then the Reserve Bank, as a result of that, recognizing

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Speaker 2: what it had done, reversing course and increasing the ocr

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Speaker 2: which had the effect of increasing mortgage interest rates over

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Speaker 2: the following two years. So yeah, and the result of that,

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Speaker 2: basically is what we're dealing with now we've had it.

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Speaker 2: We've had a couple of years of the reserve banks

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Speaker 2: starting to reduce those rates again. So big take, because

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Speaker 2: the first cause of house price growth is a lower

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Speaker 2: cost of money, and so that's been coming down, and

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Speaker 2: so the confidence or the lack of confidence that we

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Speaker 2: had in the market for a long time because it

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Speaker 2: was costing too much basically to borrow money is kind

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Speaker 2: of dissipating. But that's been replaced ryan by a survey

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Speaker 2: of listenings which has come about over the last twelve

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Speaker 2: or eighteen months. And the reason that's happened is because

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Speaker 2: people seeing house price is decreasing over the last sort

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Speaker 2: of two two and a half years, rather than putting

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Speaker 2: their houses on the market and selling them for less

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Speaker 2: than they thought they were worth, basically just chose to

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Speaker 2: hold on to them, and once those prices stabilized and

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Speaker 2: sort of set a new benchmark, then they started putting

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Speaker 2: them back out onto the market. So listings have increased,

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Speaker 2: so it's basically supply and demand there. So the reason

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Speaker 2: you're seeing these prices sitting at a relatively stable level

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Speaker 2: is because there are so many listenings on the market

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Speaker 2: relative to the number of people that are actually out

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Speaker 2: there prepared to buy. So that's a really long answer

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Speaker 2: to your question, but it basically explains what's happened over

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Speaker 2: the last two or three years. That's not going to

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Speaker 2: change until those listings are basically mopped up, and that's

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Speaker 2: going to take probably another twelve months to eighteen months

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Speaker 2: before we start to see any real change in house

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Speaker 2: prices and prices starting to slowly increase again.

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Speaker 1: And when you say increase again, do you mean take

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Speaker 1: off like a rocket or you mean, well it just

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Speaker 1: you know, we're not going to see the types of

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Speaker 1: increases we saw post COVID, But are we going to

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Speaker 1: see a boom?

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Speaker 2: The shortlandswer that is yes, And the reason I say

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Speaker 2: yes with some degree of confidence is simply based on

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Speaker 2: the evidence of the last forty years. When I say

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Speaker 2: the last forty years to forty years prior to twenty twenty.

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Speaker 2: So we know that every ten years on average since

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Speaker 2: since nineteen eighty, house prices have doubled, and the pattern

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Speaker 2: for that has been six or seven years during which

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Speaker 2: they've doubled, and then a two or three year period

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Speaker 2: where they've basically sat flat, So ten years in total

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Speaker 2: each time, So that's that's an empirical measure that we

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Speaker 2: can look at. So everything suggests that that trend will continue.

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Speaker 2: So at some point the market will kick off again,

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Speaker 2: and that's obviously not going to happen till those listings

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Speaker 2: are mopped up, and at some point the supply of

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Speaker 2: listings is going to diminish to a point where we

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Speaker 2: get this thing called fomo fear of missing out, and

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Speaker 2: so people are going to be prepared to pay more

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Speaker 2: in order to get a property over some other punter

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Speaker 2: who also wants to buy the same property. And the

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Speaker 2: crucial part of that that's been missing over the last

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Speaker 2: two or three years has been the cost of money

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Speaker 2: was too high. That's now fixing itself as well. So

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Speaker 2: sure answer tickue, that wasn't very short, but that wasn't

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Speaker 2: at all, but anti tech question is yes, yeah, anti

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Speaker 2: tech question is yes, We just don't know when that's

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Speaker 2: going to happen.

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Speaker 1: Okay, well that's we'll be reassuring for people. Actually, thank

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Speaker 1: you for that asty church property commentated.

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Speaker 2: For more from Heather Duplessy Allen Drive, listen live to

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Speaker 2: news talks. It'd be from four pm weekdays, or follow

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Speaker 2: the podcast on iHeartRadio