WEBVTT - Ed McKnight: "Inflation is nobody's friend" 0:00:05.761 --> 0:00:09.681 You're listening to the Weekend Collective podcast from News Talks EDB. 0:00:12.201 --> 0:00:16.801 Sound a scratch up ticket by two twelve PA tagging 0:00:16.961 --> 0:00:22.161 gas weird still time, let's see us wrong? 0:00:22.961 --> 0:00:26.081 News Talk zed B. You're with the Weekend Collective Jason 0:00:26.121 --> 0:00:29.201 Walls in for Tim Beveridge, who's away this week, and 0:00:29.281 --> 0:00:32.841 we've got the one roof radio show, The Rundown with 0:00:33.161 --> 0:00:36.241 Ed McKnight, resident economists at ope's partners. 0:00:36.361 --> 0:00:36.401 Ed. 0:00:36.441 --> 0:00:38.641 How are you doing, Jackson? I'm so excited to be 0:00:38.721 --> 0:00:39.641 talking to you today. 0:00:39.801 --> 0:00:42.001 Yeah, I'm excited to be talking to you about some property, 0:00:42.201 --> 0:00:43.201 some housing. How good? 0:00:43.721 --> 0:00:43.881 Yeah. 0:00:43.921 --> 0:00:46.681 I want to start with this because a ASB has 0:00:46.721 --> 0:00:49.361 cut its eighteen month fixed term loan rate to five 0:00:49.481 --> 0:00:52.961 point thirty nine, following cuts by Westpac and by B 0:00:53.121 --> 0:00:55.241 and Z. Now all three of these banks six months 0:00:55.321 --> 0:00:57.961 rates are now at five point nine to nine percent 0:00:58.041 --> 0:01:00.841 as they fight to be the bank of choice for mortgages. 0:01:01.041 --> 0:01:04.721 And this comes alongside rumors apparently of a foreign Buyers 0:01:04.801 --> 0:01:08.201 band reversal, with experts saying it could work, but the 0:01:08.321 --> 0:01:10.361 rules would need to be a little bit more flexible. 0:01:10.441 --> 0:01:12.521 So we got we're going to be taking your calls 0:01:12.921 --> 0:01:15.001 this afternoon. So oh, eight hundred and ten eighty. If 0:01:15.001 --> 0:01:16.961 you got a question for Ed, probably a question for 0:01:17.161 --> 0:01:18.921 Ed rather than me, because he's the expert. I'm just 0:01:19.001 --> 0:01:21.161 the guy that I'm just the loud mouth with the questions. 0:01:21.201 --> 0:01:24.601 But before we get some calls from listen, I'm curious, 0:01:24.681 --> 0:01:27.601 from your perspective, what's the reason behind these cuts that 0:01:27.641 --> 0:01:29.321 we're seeing in bank interest rates. 0:01:29.481 --> 0:01:32.001 Well, it's quite funny because I was over in Europe 0:01:32.201 --> 0:01:34.641 in the holidays, and midway through I thought, do you 0:01:34.721 --> 0:01:36.401 know what, I'm going to log on and see what's 0:01:36.441 --> 0:01:38.441 happening with the interest rates, And one thing I was 0:01:38.641 --> 0:01:42.561 very surprised about is that the wholesale interest rates, So 0:01:43.001 --> 0:01:45.041 just think of this as what it costs the bank 0:01:45.121 --> 0:01:47.761 to borrow money and then lend it to people like 0:01:47.841 --> 0:01:50.561 you and me. That went down by about zero point 0:01:50.641 --> 0:01:53.601 two five percent over the break, and I was like, oh, 0:01:53.681 --> 0:01:56.321 that's very interesting. So it's not surprising that we then 0:01:56.401 --> 0:02:00.241 see ASB making a small cunt, you know, zero point 0:02:00.321 --> 0:02:02.881 two percent off their one year rate. Now, I think 0:02:02.961 --> 0:02:06.281 ASP have been pretty clever move so early in the 0:02:06.401 --> 0:02:09.441 year because they are the first bank to make any 0:02:09.721 --> 0:02:14.201 meaningful cut. In twenty twenty five, Westpac did get just 0:02:14.361 --> 0:02:16.801 ahead of them the day before on the seventeenth, they 0:02:16.881 --> 0:02:19.601 cut their six month rate, as you'd said, but HAYSB 0:02:19.761 --> 0:02:21.961 went a little bit further, cutting their one year rate 0:02:22.081 --> 0:02:25.601 and their eighteen month as well. So now ASB are 0:02:26.041 --> 0:02:27.761 the kind of leaders in the market as far as 0:02:27.841 --> 0:02:31.081 I'm concerned, at five point three nine percent for the 0:02:31.161 --> 0:02:33.561 eighteen month rate, five point five nine for that one 0:02:33.681 --> 0:02:34.481 year rate as well. 0:02:34.681 --> 0:02:37.241 Interesting that you were talking about the Europeans and so 0:02:37.601 --> 0:02:40.681 this is this cut more based on what's happening overseas 0:02:40.881 --> 0:02:42.881 rather than in the New Zealand market because the Reserve 0:02:42.921 --> 0:02:45.681 Bank haven't moved that yet their interest rates that obviosly 0:02:45.681 --> 0:02:48.321 our call is on February nineteenth, So is this is 0:02:48.401 --> 0:02:50.601 this more based on what's happening overseas rather than in 0:02:50.641 --> 0:02:51.441 the New Zealand market. 0:02:51.561 --> 0:02:54.281 I think it's mainly what's happening with what it costs 0:02:54.321 --> 0:02:56.201 the banks to borrow money and lend it out. Now 0:02:56.241 --> 0:02:58.721 that that's related to a whole heap of things. One 0:02:58.761 --> 0:03:02.001 of the main things that is impacted by that is 0:03:02.441 --> 0:03:04.601 what people think the Reserve Bank is going to do, 0:03:04.681 --> 0:03:08.481 and what you often see is that banks will anticipate 0:03:08.601 --> 0:03:11.441 and the markets will anticipate what is the Reserve Bank 0:03:11.561 --> 0:03:14.641 going to do, and then they move beforehand. Now, one 0:03:14.801 --> 0:03:17.521 interesting thing is the Reserve Bank Governor Adrian or when 0:03:17.521 --> 0:03:20.721 he last made his press conference cutting the ocr by 0:03:20.761 --> 0:03:22.801 half a percent, he said, you know what I think 0:03:22.841 --> 0:03:24.881 we're going to do next time. I think we'll probably 0:03:24.921 --> 0:03:28.081 do another half a percent. So there's probably some anticipation 0:03:28.721 --> 0:03:31.161 of that going on. I expect that many of the 0:03:31.281 --> 0:03:35.641 other banks will probably follow asb's lead in terms of 0:03:35.961 --> 0:03:38.481 trimming some of their rates early in January. The one 0:03:38.561 --> 0:03:42.841 thing that I just really cautioned borrowers out there is 0:03:42.921 --> 0:03:45.481 I don't think we're going to see a repeat of 0:03:45.641 --> 0:03:49.121 what we saw in twenty twenty four happening this year. 0:03:49.081 --> 0:03:51.201 In terms of rate cut after rate cut after ratecut. 0:03:51.401 --> 0:03:55.601 There were huge, huge discounts happening or drops happening in 0:03:55.681 --> 0:03:58.361 interest rates last year, and I think people have forgotten that. 0:03:58.841 --> 0:04:02.281 At the start of twenty twenty four, asb's one year 0:04:02.401 --> 0:04:05.761 interest rate was seven point four percent. Okay, fine, it 0:04:05.881 --> 0:04:08.521 was seven point three nine percent, but basically seven point 0:04:08.601 --> 0:04:12.321 four percent, And what we saw throughout the last twelve 0:04:12.441 --> 0:04:14.761 months is a drop of I think it was about 0:04:14.841 --> 0:04:17.761 one point eight percent. We've basically gone from seven point 0:04:17.841 --> 0:04:21.361 four down to five point six ish. Now we're not 0:04:21.561 --> 0:04:24.841 going to see another one point eight percent cut again 0:04:25.161 --> 0:04:26.281 in twenty twenty five. 0:04:26.401 --> 0:04:28.761 Are you talking about mortgage rates or from the OCR 0:04:28.841 --> 0:04:31.201 where we're not going to see another one point five 0:04:31.321 --> 0:04:34.161 basis points cuts from one point five percent cut from 0:04:34.161 --> 0:04:36.921 the Reserve Bank or are you talking mortgage I'm talking 0:04:36.961 --> 0:04:39.321 mortgage registrates in that case. Now, if we're talking really 0:04:39.321 --> 0:04:42.081 about the OCR, we're sitting at four point two five percent, 0:04:42.481 --> 0:04:45.361 the kind of terminal rate of how low are we 0:04:45.441 --> 0:04:48.161 going to go? Most banks are saying somewhere between three 0:04:48.281 --> 0:04:50.841 percent and two point seven five percent. 0:04:51.241 --> 0:04:54.201 So again, what have we seen? We've seen. We peaked 0:04:54.281 --> 0:04:57.561 the OCR at five point five percent. We've chopped off 0:04:57.681 --> 0:05:01.761 that matte bloody math has not gone too well. We've 0:05:01.841 --> 0:05:04.681 dropped off one point two five percent. Are we going 0:05:04.761 --> 0:05:07.921 to see that again? We probably will see another one 0:05:08.001 --> 0:05:11.601 point two five percent off the OCR very slowly. Won't 0:05:11.641 --> 0:05:13.561 all happen in twenty twenty five? In my view, I 0:05:13.561 --> 0:05:16.321 think we'll probably see the last few cuts happening into 0:05:16.401 --> 0:05:19.441 twenty twenty six. But in terms of the mortgage interest rates, 0:05:19.481 --> 0:05:21.241 which is what we will care about when we're when 0:05:21.281 --> 0:05:23.681 we're fixing our loans, and I know that. I think 0:05:23.721 --> 0:05:25.721 you said you'd recently, over the last couple of years 0:05:25.761 --> 0:05:27.241 picked up a loan, so we won't dig into that. 0:05:28.001 --> 0:05:30.081 I don't think we're going to see another one point 0:05:30.121 --> 0:05:32.601 eight percent cut off that one year rate which most 0:05:32.641 --> 0:05:35.801 of us fix in. For my pick is we're going 0:05:35.881 --> 0:05:36.321 to end. 0:05:36.321 --> 0:05:39.001 Low fives low fives, because I did see an article 0:05:39.041 --> 0:05:42.441 in the Herald that said mortgage holders are bracing for 0:05:42.641 --> 0:05:44.841 a rate in the fours. You just don't think we're 0:05:44.841 --> 0:05:45.321 going to get there. 0:05:45.601 --> 0:05:48.041 You might get to high fours. I mean, you'll never 0:05:48.121 --> 0:05:50.841 say never, but we're not going back to four percent. 0:05:51.041 --> 0:05:52.961 From my view, I don't think we're going to see 0:05:52.961 --> 0:05:55.161 another four percent for many, many, many years. 0:05:55.281 --> 0:05:55.441 Yeah. 0:05:55.481 --> 0:05:56.681 Do you know what I was thinking the other day 0:05:56.681 --> 0:05:59.601 at is how in America you can lock in your 0:05:59.641 --> 0:06:02.081 interest rate for thirty years. And imagine if you bought 0:06:02.361 --> 0:06:05.601 in the days when interest rates were zero point twenty 0:06:05.641 --> 0:06:08.281 five or something like that, you'd be you'd be making 0:06:08.321 --> 0:06:09.241 money handle a fist. 0:06:09.321 --> 0:06:11.921 Essentially, you'd be really happy. Or even there are people 0:06:12.001 --> 0:06:15.681 who fixed for five years at two point nine nine percent, 0:06:16.041 --> 0:06:18.921 and those people who were smart enough to do that. 0:06:19.361 --> 0:06:22.681 And let me be clear, I wasn't one of those people. No, 0:06:22.921 --> 0:06:26.401 because back at that time, the talk out of most 0:06:26.481 --> 0:06:29.681 economists was that interest rates through interest rates were going 0:06:29.721 --> 0:06:32.961 to be low for a very very long time, and 0:06:33.361 --> 0:06:36.361 that two point nine nine percent, well, in the context 0:06:36.441 --> 0:06:38.961 of what economists thought at the time, Wow, maybe it 0:06:39.041 --> 0:06:41.121 wasn't that great. Now, there were some people who were 0:06:41.201 --> 0:06:44.121 much smarter than me, like Tony Alexander, another economists who 0:06:44.241 --> 0:06:46.481 was telling everybody to fax at two point nine nine 0:06:46.521 --> 0:06:47.601 for those five years, and. 0:06:47.681 --> 0:06:50.561 He was right, Yeah, geez, two point nine nine I 0:06:50.681 --> 0:06:53.841 met six point nine nine. At the moment, we're coming 0:06:53.921 --> 0:06:57.161 up for renewal soon. And the thing is we are 0:06:57.641 --> 0:07:00.961 February fourteenth. The Reserve Bank's decision is on the nineteenth. 0:07:01.321 --> 0:07:03.481 So can I ask you just from my own perspective here, 0:07:03.801 --> 0:07:06.281 can I float for just a week and then the 0:07:06.401 --> 0:07:09.001 next week when I get an indication about what the 0:07:09.081 --> 0:07:12.241 Reserve Bank's doing, then I can start up making some decisions. 0:07:12.361 --> 0:07:14.481 Is that a good perspective? Is that something smart to do? 0:07:14.761 --> 0:07:17.681 Yeah, that's something that quite a few borrowers decide to do. Now, 0:07:17.761 --> 0:07:19.761 there is a little caution about this The good thing 0:07:19.801 --> 0:07:22.921 about your situation is you've only got a very short 0:07:23.041 --> 0:07:26.281 period of time between when your mortgage interstraight comes off 0:07:26.641 --> 0:07:30.481 and when the Reserve Bank makes their decision. So if 0:07:30.521 --> 0:07:33.521 I was a mortgage advisor, which I'm not, a legitimate 0:07:33.561 --> 0:07:36.401 piece of advice to somebody in that situation might be yeah, 0:07:36.441 --> 0:07:38.281 float for a week, and a number of our clients 0:07:38.321 --> 0:07:41.601 and Open's partners do that. Now, I've seen other people 0:07:42.041 --> 0:07:45.481 borrowers who are saying, well, you know it's early January, 0:07:46.201 --> 0:07:49.641 the next ocer cat's coming in mid maybe I'll float 0:07:49.761 --> 0:07:52.801 for six weeks or so. To that, I'd be like, well, 0:07:52.921 --> 0:07:56.921 six weeks on floating is actually a very very long time, yeah, 0:07:56.961 --> 0:08:00.561 because you're paying over an extra percent per year more 0:08:00.921 --> 0:08:03.601 just to be on floating. And so that's sometimes where 0:08:03.641 --> 0:08:06.241 the numbers may not make sense. The other thing in 0:08:06.361 --> 0:08:10.801 that situation, some borrowers can get quite disappointed when the 0:08:10.881 --> 0:08:14.201 OCR makes a cut, but the banks don't drop or 0:08:14.281 --> 0:08:17.401 don't pass on that full OCR cut. So there might 0:08:17.481 --> 0:08:19.601 be a half a percent cut in the OCR, and 0:08:19.681 --> 0:08:22.201 you might get point two percent off the one year rate, 0:08:22.361 --> 0:08:25.561 something along those lines, And some borrowers might say, hey, well, 0:08:25.841 --> 0:08:28.041 I've just been paying quite a lot of money on floating. 0:08:28.321 --> 0:08:31.081 Maybe that didn't quite make as much sense as they thought. 0:08:31.401 --> 0:08:34.321 What's really important to recognize is we are past the 0:08:34.441 --> 0:08:37.721 point where a half a percent cut in the OCR 0:08:37.841 --> 0:08:40.481 gets passed on to a half a percent cut in 0:08:40.801 --> 0:08:43.601 a mortgage interest rate. Again, if I take you back 0:08:43.641 --> 0:08:47.241 to early to mid twenty twenty four, Adrian or just 0:08:47.321 --> 0:08:50.121 had to make a sounding like he was maybe going 0:08:50.161 --> 0:08:53.041 to cut the rate, and you would see the wholesale 0:08:53.121 --> 0:08:55.961 markets really drop quite quickly, and I'd say, great, we're 0:08:55.961 --> 0:08:57.761 going to have lower interest rates. We're going to see 0:08:57.761 --> 0:09:00.841 a lower OCR. Let's pass that on or bet on 0:09:00.961 --> 0:09:03.561 it right now. And so you would see the banks 0:09:03.641 --> 0:09:07.041 cutting their rates even though the OCR wasn't even moving. 0:09:07.721 --> 0:09:11.201 Now we're past that point of anticipation and you see 0:09:11.201 --> 0:09:13.161 a half a percent cut in the OCR, and you 0:09:13.281 --> 0:09:15.921 might see a point two percent cut off your mortgage 0:09:15.961 --> 0:09:18.041 interest rates. So people just need to bear in mind 0:09:18.641 --> 0:09:22.001 or temper their expectations about how far are we going 0:09:22.041 --> 0:09:23.761 to see those interest rates continue to fall? 0:09:23.841 --> 0:09:26.121 And when it comes to those OCR cuts and these 0:09:26.121 --> 0:09:29.041 OCR statements, I mean, it's not even about the cut 0:09:29.121 --> 0:09:31.601 these days, it's about what happens next. Where the indication 0:09:31.801 --> 0:09:33.601 is where things are going. So if you look, if 0:09:33.641 --> 0:09:35.481 you put your Economs hat on, it's been on this 0:09:35.561 --> 0:09:36.961 whole time, by the way, but to keep it on 0:09:37.241 --> 0:09:39.441 while I ask you, what do you think his forward 0:09:39.481 --> 0:09:42.081 looking projections are going to be if he's been hinting 0:09:42.161 --> 0:09:45.641 at these fifty basis points cuts. At one point, there's 0:09:45.641 --> 0:09:48.161 even some questions about us seventy five basis point cuts. 0:09:48.401 --> 0:09:51.401 What happens next in Adrianaor's mind when he's looking out 0:09:51.481 --> 0:09:54.161 into twenty twenty five after this February nineteenth. 0:09:55.281 --> 0:09:57.881 That's a good question. So if I imagine we're Adrian 0:09:57.961 --> 0:10:00.321 Aura's right now, I believe he's got a holiday home 0:10:00.401 --> 0:10:04.041 somewhere in the Lower North Island, probably not the santin news. 0:10:03.881 --> 0:10:07.761 Talk or AE you're listening, Oh, eight hundred eighty ten eighty, 0:10:07.801 --> 0:10:08.721 we'd love to have you on the show. 0:10:08.961 --> 0:10:11.521 That's nothing bad about news talks, he'db it's more like 0:10:11.601 --> 0:10:13.921 he's probably not listening to me. But if as Adrian 0:10:14.001 --> 0:10:17.161 all right now, or Karen Silka, the Deputy Reserve Bank 0:10:17.241 --> 0:10:21.281 Governor or assistant can't remember, they should be pretty comfortable 0:10:21.321 --> 0:10:23.441 at the moment because they're going to be looking at 0:10:23.601 --> 0:10:26.721 how is the economy evolving? And I think it is 0:10:26.921 --> 0:10:32.361 probably evolving along their expectations. They are seeing some negative 0:10:32.441 --> 0:10:35.401 things happening at the moment. Unemployment has increased to four 0:10:35.401 --> 0:10:39.201 point eight percent, it is expected to continue to increase. 0:10:39.601 --> 0:10:43.201 And what they need to be comfortable about comfortable about 0:10:43.401 --> 0:10:46.361 is that inflation is coming down. So what do they 0:10:46.441 --> 0:10:49.161 want to see. They want to see businesses not raising 0:10:49.201 --> 0:10:52.801 their prices. They want to see businesses saying, hey, we're 0:10:52.841 --> 0:10:55.961 struggling for a lack of customers. At the moment, we've 0:10:56.001 --> 0:10:58.281 got a bit of what we call us economists called 0:10:58.281 --> 0:11:01.721 productive of capacity, i e. We've got enough staff and 0:11:01.801 --> 0:11:04.801 we've got enough stuff that we could make more goods 0:11:04.881 --> 0:11:06.801 or we could provide more services if we needed to. 0:11:07.161 --> 0:11:09.841 And so we're not going to increase our prices. And 0:11:10.001 --> 0:11:12.521 so even though there is some negative things happening in 0:11:12.601 --> 0:11:15.121 the economy at the moment, I would say that's probably 0:11:15.241 --> 0:11:18.081 what the Reserve Bank is looking for, because they want 0:11:18.121 --> 0:11:20.761 to make sure that businesses don't think that times are 0:11:20.801 --> 0:11:23.081 so good that they're going to keep increasing their prices. 0:11:23.161 --> 0:11:25.401 Because what does the Reserve Bank want to do. We've 0:11:25.441 --> 0:11:28.881 got inflation within that target band of one to three percent. 0:11:29.001 --> 0:11:31.441 Think it was two point two percent last time. Next 0:11:31.521 --> 0:11:34.361 time the data gets released, they're going to be wanting 0:11:34.441 --> 0:11:36.641 to make sure that it is still anchored at that 0:11:36.881 --> 0:11:37.481 two percent. 0:11:37.601 --> 0:11:40.881 Now, walk me through why infletion comes back to mortgage rates. 0:11:41.561 --> 0:11:45.241 Well, inflation is the main thing that the Reserve Bank 0:11:45.681 --> 0:11:49.161 is targeting, right, because inflation is good for nobody. We 0:11:49.321 --> 0:11:51.201 call it. Us economists called it a thief in your 0:11:51.241 --> 0:11:53.681 back pocket because if you've got one hundred dollars in 0:11:54.041 --> 0:11:56.481 your bank account, well, in a year's time, that one 0:11:56.561 --> 0:11:59.201 hundred dollars isn't going to buy the same amount of 0:11:59.241 --> 0:12:02.481 stuff that it can. Today, we always think about a 0:12:02.561 --> 0:12:06.041 packet of lollies like a two dollar mixed. Well, blind 0:12:06.081 --> 0:12:08.121 me back back in my day, when I was kicking 0:12:08.241 --> 0:12:10.241 my day, the two dollar mixture was only a dollar, 0:12:10.521 --> 0:12:13.601 and well, back I always think of it as volume 0:12:13.681 --> 0:12:16.921 as well. Back in the early nineties, two dollar banks yr. Gosh, 0:12:17.001 --> 0:12:19.681 that'll get you a whole heap of stuff. Now I haven't, 0:12:19.721 --> 0:12:21.881 I must, I haven't been to a dairy recently in 0:12:22.001 --> 0:12:23.961 order to two dollar mixt year. But I bet you 0:12:24.081 --> 0:12:25.961 you don't get as many logs for your money's in 0:12:26.041 --> 0:12:28.761 there it's a rip off that and so what the 0:12:28.841 --> 0:12:30.441 Reserve Bank whats to make sure is that we've got 0:12:30.521 --> 0:12:33.361 low and stable inflation between one to three percent, targeting 0:12:33.441 --> 0:12:36.241 that two percent. Now, what can the Reserve Bank do 0:12:37.001 --> 0:12:40.361 to stop inflation going up? They can hike up interstrates 0:12:40.641 --> 0:12:44.001 because when interest rates are high, that does two things. 0:12:44.321 --> 0:12:47.401 It stops us borrowing to spend, which means people spend less. 0:12:47.681 --> 0:12:50.561 And then on top of that, it also encourages people 0:12:50.601 --> 0:12:52.561 to save because you get a better return on your money. 0:12:52.841 --> 0:12:55.201 And so the way that interest rates are linked is 0:12:55.281 --> 0:12:58.401 that that is the Reserve Bank's main tool to stop inflation. 0:12:59.121 --> 0:13:01.681 Interesting, and you did mention employment there as well. They 0:13:01.721 --> 0:13:03.961 don't actually technically have to worry about that anymore because 0:13:03.961 --> 0:13:05.961 the government kibosh that mat Yeah. 0:13:05.801 --> 0:13:07.961 So that was part of the d date they were 0:13:08.041 --> 0:13:12.921 targeting maximum sustainable employment. And I guess what the government 0:13:13.041 --> 0:13:16.401 was trying to do with that change is they didn't 0:13:16.441 --> 0:13:20.561 want the Reserve Bank to have two competing mandates. Now, 0:13:20.601 --> 0:13:23.001 I must have been at that specific time there wasn't 0:13:23.201 --> 0:13:27.881 really that much of a trade off between those two mandates. 0:13:28.681 --> 0:13:30.201 But I think it's probably a good thing that we've 0:13:30.281 --> 0:13:33.201 just got the Reserve Bank sole focus on. It's one 0:13:33.321 --> 0:13:35.841 thing inflation, because inflation is nobody's friend. 0:13:35.961 --> 0:13:39.441 Yeah, and it's back down within that within that that 0:13:39.961 --> 0:13:42.961 band as well. And we've got inflation numbers out leader 0:13:43.041 --> 0:13:43.321 this week. 0:13:43.401 --> 0:13:43.601 Is it. 0:13:45.161 --> 0:13:47.201 That's news? I think it is that. That's from our newsroom, 0:13:47.241 --> 0:13:49.441 So we will keep we will keep you across that 0:13:49.521 --> 0:13:52.601 when it comes interested in is now the time to 0:13:52.681 --> 0:13:54.521 sell or buy it? It really does come back to 0:13:54.641 --> 0:13:57.641 this when we're talking about property. Is now the time 0:13:57.721 --> 0:13:59.761 to sell? Is now the time to buy? Or should 0:13:59.761 --> 0:14:02.001 we just be waiting to see what the market looks like. 0:14:02.321 --> 0:14:05.481 It's quite funny because at the end of of twenty 0:14:05.521 --> 0:14:08.161 twenty four I wrote two articles for one ROOF. I 0:14:08.241 --> 0:14:10.121 wrote the seven reasons why I thought it was the 0:14:10.201 --> 0:14:12.841 right time to buy my first house, not my first 0:14:12.921 --> 0:14:14.841 property that I am because I've been investing in property 0:14:14.881 --> 0:14:16.881 for a while, but the first house that I would 0:14:16.881 --> 0:14:19.241 ever live in. And I wrote the seven reasons why 0:14:19.361 --> 0:14:21.561 now was the time to buy? And then the following 0:14:21.601 --> 0:14:24.401 week I wrote the six reasons why it was not 0:14:24.601 --> 0:14:27.041 the right time to buy a house. And depending on 0:14:27.201 --> 0:14:29.841 what you think, you will either agree with one or 0:14:29.881 --> 0:14:30.361 not the other. 0:14:30.681 --> 0:14:32.841 Right seven and one was sex, so there's a clear winner. 0:14:33.321 --> 0:14:35.561 Well, in the end, I decided to buy a house, 0:14:35.601 --> 0:14:37.681 and I'll tell you the reason why, specifically as an 0:14:37.721 --> 0:14:40.881 owner occupier, is that I could see interest rates coming 0:14:40.961 --> 0:14:44.241 down and we've seen quite large drops. That does two 0:14:44.321 --> 0:14:46.561 things to me. That tells me a it's more affordable 0:14:46.601 --> 0:14:48.081 to buy a house than it was a year ago 0:14:48.321 --> 0:14:50.441 in terms of being able to afford the mortgage. The 0:14:50.521 --> 0:14:53.521 second thing that also means is I believe that we 0:14:53.601 --> 0:14:57.201 probably will see some house price growth in twenty twenty five, 0:14:57.281 --> 0:14:59.241 and so perhaps it will be slightly cheaper to be 0:14:59.321 --> 0:15:02.121 able to buy the house today compared to or back 0:15:02.161 --> 0:15:04.481 in December, compared to what it would be in six 0:15:04.561 --> 0:15:06.401 months time. I mean there are some other changes as well. 0:15:06.521 --> 0:15:09.201 Yeah, I'll tell you what we bought in twenty twenty one, 0:15:09.281 --> 0:15:11.401 and we bought off the plans and so it's a 0:15:11.441 --> 0:15:13.921 beautiful wee apartment. It's tiny, it's less than the size 0:15:13.961 --> 0:15:16.281 of this room. Doesn't help the listeners at home. It's 0:15:16.281 --> 0:15:17.761 about forty eight square meters. 0:15:18.121 --> 0:15:18.521 We love it. 0:15:18.601 --> 0:15:22.921 It's beautiful. But since then prices have gone down quite significantly, 0:15:23.161 --> 0:15:25.201 and so we're sitting in a perspective where you know, 0:15:25.801 --> 0:15:28.201 we could be the first people in New Zealand's history 0:15:28.201 --> 0:15:29.921 to lose money on property, and it does get It 0:15:30.201 --> 0:15:31.721 kind of gets you. So what would be your advice 0:15:31.801 --> 0:15:34.601 to somebody like myself and my wife. We've got an 0:15:34.681 --> 0:15:36.641 eight year mortgage, so we're trying to pay it off 0:15:36.681 --> 0:15:39.481 as quickly as possible, but we're really worried about the 0:15:39.561 --> 0:15:42.441 fact that it's just way worth, way less than. 0:15:42.361 --> 0:15:45.281 When we bought it. Yeah, your mortgage is quite quite 0:15:45.401 --> 0:15:47.961 short at eight years. Was there a specific reason behind that. 0:15:48.161 --> 0:15:49.841 We looked at how much we'd be paying back in 0:15:49.961 --> 0:15:51.881 interest and it just scared the Jesus out of us, 0:15:52.121 --> 0:15:54.921 and we thought that we just you know, it's the 0:15:55.001 --> 0:15:59.601 weekly payments aren't crippling. It's about eleven hundred dollars a week, 0:16:00.001 --> 0:16:01.601 so and it's quite a small place. We had a 0:16:01.841 --> 0:16:04.561 pretty sizable deposit because we saved up for a long time. 0:16:05.321 --> 0:16:07.441 And it's an investment property. Now you still go to 0:16:07.561 --> 0:16:10.801 where we live there. Oh cool. Now, a couple of 0:16:10.841 --> 0:16:12.881 things that I'm picking up there. The first thing that 0:16:12.961 --> 0:16:15.761 I'd say is you wouldn't be the first person to 0:16:15.841 --> 0:16:18.081 lose money and real estate in New Zealand. We've always 0:16:18.121 --> 0:16:21.041 got to remember that it is not always a you 0:16:21.161 --> 0:16:24.481 can never lose money and money and property. You absolutely can. 0:16:24.761 --> 0:16:27.121 Most people do tend to make money over time, though, 0:16:27.401 --> 0:16:29.441 and the reason they make money is that they hold on. 0:16:29.761 --> 0:16:34.081 And so the first and uncomfortable and maybe quite obvious 0:16:35.041 --> 0:16:37.681 thing that I'd like to point out is you need 0:16:37.761 --> 0:16:40.161 to hold on as the main thing. And in fact, 0:16:40.281 --> 0:16:44.401 cool Logic do some really good analysis where they group 0:16:44.721 --> 0:16:48.121 people into two buckets. First, we've got the bucket of 0:16:48.161 --> 0:16:51.481 people who made money sold their property and made money 0:16:51.921 --> 0:16:55.121 through the property's value going up, so they sold more 0:16:55.161 --> 0:16:56.881 for than they bought it. And then they've got this 0:16:56.961 --> 0:16:59.521 other bucket of people who were the opposite. They sold 0:16:59.561 --> 0:17:01.681 their property and they sold it for a price less 0:17:01.721 --> 0:17:04.681 than they bought it for. Now, the major difference between 0:17:04.761 --> 0:17:07.921 these two groups is simply how long those people held 0:17:08.001 --> 0:17:10.841 on for. So the group of people who made money 0:17:10.881 --> 0:17:14.041 in property, they on average hold their properties for somewhere 0:17:14.081 --> 0:17:17.881 between nine to ten years. The people who have lost 0:17:17.961 --> 0:17:22.161 money in property routinely hold their properties for somewhere between 0:17:22.401 --> 0:17:25.281 one to three years. And so it is this time 0:17:25.401 --> 0:17:29.921 heals all wounds mentality. Now, the uncomfortable and sad thing 0:17:29.961 --> 0:17:31.521 in this story is that you did buy at the 0:17:31.601 --> 0:17:34.281 top of the market, but you can't help that, no idea, 0:17:34.881 --> 0:17:37.281 you didn't know. You love your apartment, you've got a 0:17:37.361 --> 0:17:41.201 lowish mortgage, you're not struggling with cash flow. Obviously, one 0:17:41.281 --> 0:17:45.441 option if you were finding those repayments to be quite tough. 0:17:45.801 --> 0:17:48.121 One option you would have, because I can tell from 0:17:48.201 --> 0:17:50.641 looking at you pretty young, it was potentially extend that 0:17:50.761 --> 0:17:53.921 mortgage term out because you voluntarily said, hey, we're going 0:17:54.001 --> 0:17:55.721 to do this in eight years, and you know that 0:17:55.801 --> 0:17:57.161 can be a good thing to pay it off really 0:17:57.241 --> 0:18:00.321 quickly if you've got the means to so. One option 0:18:00.401 --> 0:18:02.441 that you might have if you did find yourself struggling 0:18:02.441 --> 0:18:04.561 as interest rates have gone up from when you purchased, 0:18:04.601 --> 0:18:06.681 it would just be to extend that out if you 0:18:06.921 --> 0:18:09.881 needed to. But the main thing is going to be 0:18:10.081 --> 0:18:11.681 hold on, And that is the thing that I'm saying 0:18:11.681 --> 0:18:14.161 to a lot of investors at the moment. If you 0:18:14.281 --> 0:18:16.521 bought at the top of the market and you've lost 0:18:16.521 --> 0:18:18.881 a couple of hundred K because the properties have gone down, 0:18:19.081 --> 0:18:21.281 there's only really one thing you can do, which is 0:18:21.361 --> 0:18:24.161 to keep holding because if you sell now you kind 0:18:24.201 --> 0:18:26.841 of book that loss. You know you have what we 0:18:27.041 --> 0:18:30.001 in the investment circles called crystallized that loss because it's 0:18:30.081 --> 0:18:32.361 now real, Whereas if you hold on over the next 0:18:32.441 --> 0:18:35.161 ten years of that property doubles in value, you'll probably 0:18:35.241 --> 0:18:35.841 make some money. 0:18:35.961 --> 0:18:37.961 Ah okay, I'll tell the wife when I get home. 0:18:38.361 --> 0:18:39.641 She's not going to like the fact that I called 0:18:39.641 --> 0:18:42.721 her the wife on the radio. Twenty five past four. 0:18:42.801 --> 0:18:45.361 Will be back with Graham after this News Talks dB 0:18:45.521 --> 0:18:48.361 Newstalks dB. It's the Weekend Collective with Jason Walls in 0:18:48.601 --> 0:18:51.561 for Tim Beverage. Text says I have friends who have 0:18:51.681 --> 0:18:55.481 investment properties and with the recent huge red raises to 0:18:55.641 --> 0:18:58.641 insurance and rates and drops in rents, they can't even 0:18:58.681 --> 0:19:01.001 break even looking at selling regards. 0:19:01.041 --> 0:19:01.321 Wayne. 0:19:01.361 --> 0:19:02.961 Thank you very much for that, Wayne, and keep those 0:19:03.001 --> 0:19:06.001 texts coming in. Oh, eight hundred eighty ten eighty is 0:19:06.041 --> 0:19:09.881 our number. If you've got some questions for Ed's and 0:19:09.921 --> 0:19:12.441 we've got Graham on the line. Graham, how are you. 0:19:14.041 --> 0:19:14.201 Yes? 0:19:14.761 --> 0:19:15.481 Know? So? 0:19:15.601 --> 0:19:17.721 I just I just I just tuned in and I 0:19:17.801 --> 0:19:19.081 don't even know the general's name. 0:19:19.081 --> 0:19:22.641 You're talking to Ed mcnat he's the resident economist at 0:19:22.721 --> 0:19:26.281 Opez Partners, Rightbez, Sorry. 0:19:26.161 --> 0:19:30.241 I own I own a small commercial property in Wellington. 0:19:30.641 --> 0:19:34.001 All right, now, the gentleman concerned says I should hold 0:19:34.081 --> 0:19:38.881 my prices. I can't hold my prices because I've got 0:19:38.921 --> 0:19:42.041 an idiot council who keeps putting the rates up. When 0:19:42.041 --> 0:19:44.441 they're going up seven they put them up seventeen percent. 0:19:44.561 --> 0:19:46.281 This year, they're going to put them up against a 0:19:46.321 --> 0:19:50.201 fifty percent. And the Gentleman's right, we've got to stop. 0:19:50.441 --> 0:19:52.601 But how do you stop the lakes of the council 0:19:53.241 --> 0:19:55.521 from putting their prices up? So I put my price. 0:19:55.881 --> 0:19:57.601 It's a good question to ads. So what do we 0:19:57.681 --> 0:19:59.321 do here? Does he just have to does Graham have 0:19:59.401 --> 0:20:02.801 to just eat the increased costs in terms of the 0:20:02.881 --> 0:20:04.881 rates increase or does he just say no, we've got 0:20:04.921 --> 0:20:06.801 a but the prices up like everybody else mate, No, 0:20:07.041 --> 0:20:07.441 not at all. 0:20:07.481 --> 0:20:09.601 Sorry, Graham, you might have just let me just clarify 0:20:09.721 --> 0:20:11.881 what I did say when we was talking to my 0:20:11.961 --> 0:20:14.241 friend Jason before, and he was saying with it that 0:20:14.441 --> 0:20:17.361 his property has gone down in value. I was saying, 0:20:17.481 --> 0:20:20.281 holding on is probably going to be one of the 0:20:20.401 --> 0:20:22.481 better ways to make sure he doesn't lose money rather 0:20:22.521 --> 0:20:25.281 than selling it a loss. Now, in terms of your 0:20:25.361 --> 0:20:28.321 situation where you're having to put up your commercial rent. 0:20:29.121 --> 0:20:31.601 I wasn't suggesting that you should just hold your rent 0:20:31.681 --> 0:20:34.841 and don't be a greedy landlord or something along those lines. 0:20:35.321 --> 0:20:39.401 In fact, if your commercial property's rent is below the 0:20:39.561 --> 0:20:43.881 market value, then increasing it, I'd actually be totally for that, because, 0:20:43.921 --> 0:20:46.321 as you've identified, some of your costs have gone up. 0:20:46.561 --> 0:20:48.761 One thing that I'd just say, though, in terms of 0:20:49.121 --> 0:20:53.001 whether you're a commercial property landlord or a residential property landlord, 0:20:53.441 --> 0:20:56.761 is tenants don't really care what our costs are. That's 0:20:56.801 --> 0:20:59.921 not really something they concern themselves with. What they are 0:20:59.961 --> 0:21:03.281 concerned about is, well, what is the market rent. So, 0:21:03.441 --> 0:21:05.761 for example, let's say that my costs as a residential 0:21:05.801 --> 0:21:09.481 landlord go up by ten percent, Well, if the market 0:21:09.721 --> 0:21:12.241 rent hasn't gone up by ten percent, I can't just 0:21:12.281 --> 0:21:14.921 say to my tenant, well, bugger it, I'm putting up 0:21:14.961 --> 0:21:18.681 by rent by ten percent, because that wouldn't fly. So 0:21:18.681 --> 0:21:21.441 it's all about what's happening with the market rent as 0:21:21.481 --> 0:21:25.041 opposed to what's happening with our costs. And your situation 0:21:25.401 --> 0:21:28.121 is the property, the commercial property a little bit under 0:21:28.161 --> 0:21:28.881 rented at the moment. 0:21:28.921 --> 0:21:33.081 Do you think I'm pretty hard to get tips, pretty 0:21:33.081 --> 0:21:38.441 hard to get, pretty hard to get tenants. You know, yeah, 0:21:38.921 --> 0:21:42.161 they will come back, but at this point in time, 0:21:43.481 --> 0:21:47.001 and they want to quibble over over the rents. And 0:21:47.081 --> 0:21:49.281 the problem is if you if you hold your rent 0:21:50.121 --> 0:21:52.521 and you're losing money, you might as will not be 0:21:52.641 --> 0:21:54.041 in business. Yeah. 0:21:54.081 --> 0:21:57.761 The difficulty there as well, and obviously you'd well know this, Graham, 0:21:57.761 --> 0:21:59.681 if you've been a commercial landlord for a while as well, 0:21:59.761 --> 0:22:01.481 is we've basically got to make a choice. Do we 0:22:01.561 --> 0:22:03.841 want to meet the market, and sometimes that can mean 0:22:04.361 --> 0:22:05.921 losing a little bit a bit of money, or do 0:22:06.001 --> 0:22:07.601 we want to wait and try and get something a 0:22:07.641 --> 0:22:09.841 bit better now. Obviously, if we wait and we have 0:22:09.961 --> 0:22:12.521 no income coming in for a for a little while, 0:22:12.721 --> 0:22:16.161 we're still paying all of those other costs. So we're 0:22:16.281 --> 0:22:17.921 just going to make that choice. Do you think you'll 0:22:18.001 --> 0:22:20.401 you'll kind of lower the rent and meet the market, 0:22:20.521 --> 0:22:22.121 or do you think you hold out for somebody paying 0:22:22.121 --> 0:22:23.081 a bit more. 0:22:24.441 --> 0:22:27.241 Well, I'm right in the middle of it now, but 0:22:27.361 --> 0:22:32.121 it's it's it's pretty hard to sort of not put 0:22:32.161 --> 0:22:34.681 it up. You know, I'm looking at sort of five 0:22:34.761 --> 0:22:39.481 percents and maybe ten percents at the most, but it's 0:22:39.561 --> 0:22:41.681 pretty hard and then you get then you get to 0:22:41.761 --> 0:22:43.481 come back from the other way. We can't aboard it, 0:22:45.041 --> 0:22:47.281 you know. So I'm between it. I'm between a rock 0:22:47.361 --> 0:22:52.401 and a hard place whether to to hang on to 0:22:52.521 --> 0:22:57.801 the tenant letting go? You know I do. I lose 0:22:57.921 --> 0:23:00.161 money and suck it up. But I can only suck 0:23:00.201 --> 0:23:02.921 it up for so long until the council start and. 0:23:04.681 --> 0:23:06.521 There'll be quite a few other people in your situation. 0:23:06.641 --> 0:23:08.881 Grams or hold on and let us know how it goes. Oh, 0:23:08.921 --> 0:23:11.681 eight hundred eighty ten eighty. If you have another question 0:23:12.001 --> 0:23:15.201 for AD, we have a tax that's come through AD. Hello, there, 0:23:15.361 --> 0:23:16.881 do you think insurance risks? 0:23:17.041 --> 0:23:17.281 Ie? 0:23:17.721 --> 0:23:19.841 Your house might be close to the border of a 0:23:19.921 --> 0:23:23.521 flood zone and so insurance costs me skyrocket? Do you 0:23:23.601 --> 0:23:24.961 think that the owner should sell? 0:23:25.161 --> 0:23:25.321 Now? 0:23:26.561 --> 0:23:29.081 Oh, that's a really interesting one. The main thing I'd 0:23:29.121 --> 0:23:32.201 say about insurance is it's not just about whether you 0:23:32.361 --> 0:23:35.921 are in a flood area or not. It also depends 0:23:35.961 --> 0:23:38.001 on how your house is built. Let me give you 0:23:38.161 --> 0:23:41.321 a really good example. So a lot of newer properties 0:23:41.401 --> 0:23:43.961 today are built above the ground. In fact, if you 0:23:44.041 --> 0:23:46.721 look at a lot of terrace housing, you'll often see 0:23:46.761 --> 0:23:48.801 that those properties you've got to walk up a couple 0:23:48.841 --> 0:23:51.001 of steps to get into them, because they might be 0:23:51.361 --> 0:23:53.761 half a meter or a meter off the ground. The 0:23:53.841 --> 0:23:56.761 whole reason they've been built that way is to mitigate 0:23:56.921 --> 0:23:59.921 that flood risk. So if you've got a new RB property, 0:24:00.041 --> 0:24:02.241 not necessarily a new build, but something built a bit 0:24:02.361 --> 0:24:05.721 more recently, often that will have less flood risk than 0:24:05.961 --> 0:24:08.641 a property that was built perhaps in the fifties and 0:24:08.841 --> 0:24:11.201 is quite close to the ground. What we're seeing with 0:24:11.361 --> 0:24:14.001 insurance companies now, and I will come back to answer 0:24:14.001 --> 0:24:16.121 the question, but what we are seeing with insurance companies 0:24:16.601 --> 0:24:20.281 is they are taking an address based approach, so they 0:24:20.401 --> 0:24:23.121 have people walking down the streets and identifying, well, what 0:24:23.321 --> 0:24:26.721 is the risk of individual properties. Whereas in the past 0:24:26.801 --> 0:24:28.681 they might do it at a street level or a 0:24:28.761 --> 0:24:31.081 suburb level, and you'd say, okay, what is the risk 0:24:31.161 --> 0:24:34.561 of this suburb and then you would average out in 0:24:34.641 --> 0:24:38.561 a way. The insurance premiums Now, it's now based on 0:24:38.841 --> 0:24:41.801 what is the risk of your specific house, and if 0:24:41.881 --> 0:24:44.841 your house is more likely to claim, then you were 0:24:44.881 --> 0:24:47.241 going to pay a high premium. So coming back to 0:24:47.561 --> 0:24:50.441 that question, it really comes back to what is the 0:24:50.561 --> 0:24:53.081 risk of your individual house? If it is a new 0:24:53.281 --> 0:24:55.561 er house, I'd say, well, maybe you're not so worried 0:24:55.601 --> 0:24:58.161 about that because the property has been built off the ground. 0:24:58.441 --> 0:25:00.441 If there is a flood, you've got a much smaller 0:25:00.561 --> 0:25:03.081 chance of your house being affected. Because of that, you've 0:25:03.121 --> 0:25:07.121 got a much smaller chance or you're less likely to claim, 0:25:07.401 --> 0:25:09.641 and because of that, you're going to save on your premiums. 0:25:09.641 --> 0:25:12.161 Compare that to if your house is built quite low 0:25:12.201 --> 0:25:14.281 to the ground. Well, I'd say, okay, maybe it's a 0:25:14.321 --> 0:25:19.681 bit more risky. I would just caution against over worrying 0:25:19.841 --> 0:25:21.641 in the situation. If we think about how much your 0:25:21.681 --> 0:25:24.961 insurance premiums going up, it might be something like another 0:25:25.041 --> 0:25:27.921 twenty percent over the next year or the next couple 0:25:27.961 --> 0:25:30.041 of years. We've seen insurance premiums go up quite a 0:25:30.041 --> 0:25:32.641 lot over the last little bit. It's just whether that's 0:25:32.681 --> 0:25:34.841 going to it's about how much is that going to 0:25:34.841 --> 0:25:37.681 impact your personal cash flow. I would just remind people 0:25:37.721 --> 0:25:40.041 as well that when you sell your house, you really 0:25:40.121 --> 0:25:42.081 are taking a hit in terms of paying all of 0:25:42.161 --> 0:25:45.161 those sale costs. I always ballpark at at about five 0:25:45.241 --> 0:25:47.441 percent of whatever you sell your house for, because you've 0:25:47.441 --> 0:25:49.161 got to pay your real estate agent, You've got to 0:25:49.201 --> 0:25:51.961 pay your marketing, You've got to pay for taking the 0:25:52.081 --> 0:25:53.881 nice photos that are going to go on one. 0:25:53.881 --> 0:25:55.001 Raging house as well. 0:25:55.081 --> 0:25:57.561 Yeah, there are so many costs and your lawyers, so 0:25:57.681 --> 0:26:00.001 many costs associated with selling your house. Now, if your 0:26:00.041 --> 0:26:02.961 house is worth five hundred thousand dollars and it's going 0:26:03.001 --> 0:26:05.361 to cost you twenty five thousand dollars to to seal 0:26:05.401 --> 0:26:07.841 your house, maybe you go, oh, that's actually quite a 0:26:07.921 --> 0:26:11.121 lot of money compared to the extra eight hundred dollars 0:26:11.201 --> 0:26:12.761 or five hundred dollars a year that I'm going to 0:26:12.801 --> 0:26:14.761 pay on my insurance. So we've just got to put 0:26:14.801 --> 0:26:15.881 everything into context. 0:26:16.201 --> 0:26:19.081 How long of insurance Compani's been doing this, had this 0:26:19.281 --> 0:26:23.081 change between this broad stroke by the suburb or by 0:26:23.161 --> 0:26:26.441 the street approach to risk rather than the individual house, 0:26:26.481 --> 0:26:28.401 and how long has it been in when did it change? 0:26:29.041 --> 0:26:32.281 It's happening really recently, So I would say over the 0:26:32.401 --> 0:26:34.641 last year. Over the last couple of years, we've been 0:26:34.721 --> 0:26:37.441 knowing that it's coming. Over the last year we have 0:26:37.761 --> 0:26:38.681 really seen it. 0:26:38.841 --> 0:26:39.001 Now. 0:26:39.401 --> 0:26:43.121 The other big change that we're seeing is most insurance companies, 0:26:43.201 --> 0:26:45.761 or more insurance companies I should say, moving to what's 0:26:45.801 --> 0:26:49.001 called a some insured approach. So rather than saying, okay, 0:26:49.081 --> 0:26:52.281 we'll ensure your house for its replacement value, you now 0:26:52.521 --> 0:26:55.481 choose what the value is and you say, cool, I'm 0:26:55.521 --> 0:26:57.921 going to insure my house for one point two million 0:26:57.961 --> 0:26:59.961 dollars or one million dollars or half a million or 0:27:00.001 --> 0:27:03.041 whatever it happens to be, rather than just the replacement value. 0:27:03.081 --> 0:27:06.201 So these two changes coming in, that does change things up. 0:27:06.361 --> 0:27:09.081 Yeah, curious. I hadn't heard of that before, and I 0:27:09.161 --> 0:27:10.881 kind of just assumed that it was the sort of 0:27:11.001 --> 0:27:14.281 the bulk approach to insurance. But it's good that they're 0:27:14.321 --> 0:27:16.321 doing this because it is a reflection on the fact 0:27:16.361 --> 0:27:18.561 that there is a lot more new builds happening in 0:27:18.681 --> 0:27:20.721 various different parts of the country as well. And it 0:27:20.761 --> 0:27:23.881 would be quite unfair, wouldn't it if you would you 0:27:24.001 --> 0:27:26.401 had a house that you know would fare quite well 0:27:26.441 --> 0:27:29.241 against the floods in somewhere that has been hit high before, 0:27:29.241 --> 0:27:32.881 because you're disincentivez people by building houses in that area. 0:27:33.121 --> 0:27:36.121 And it also is a bit of a flag to buyers. Yeah, 0:27:36.201 --> 0:27:38.281 so if you are going to go buy an older 0:27:38.321 --> 0:27:40.921 house and we find that or you find that while 0:27:40.961 --> 0:27:44.161 those insurance premiums are quite high, maybe that says something 0:27:44.241 --> 0:27:47.001 about the risk of the area. It's really interesting the 0:27:47.081 --> 0:27:50.321 diversity in terms of what people pay for insurance around 0:27:50.361 --> 0:27:53.161 the country. I was really surprised when I moved to 0:27:53.241 --> 0:27:55.881 Auckland how low my insurance was compared to some of 0:27:55.921 --> 0:27:58.721 the properties that I own down in christ Church, where 0:27:58.721 --> 0:28:00.681 my insurance is a bit higher. And in fact, you 0:28:00.801 --> 0:28:03.561 well know because you live in Wellington, the insurance premiums 0:28:03.601 --> 0:28:08.161 for some Wellington properties are exceptionally high. I actually saw 0:28:08.201 --> 0:28:10.681 one investor who was paying around ten thousand dollars a 0:28:10.841 --> 0:28:13.761 year for their insurance. It was very, very high. That 0:28:13.881 --> 0:28:15.801 was through their body corporate because it was a very 0:28:15.881 --> 0:28:20.521 risky building. So some people have will pay quite a 0:28:20.561 --> 0:28:23.241 reasonable premium for their house insurance. Some people are paying 0:28:23.681 --> 0:28:24.521 a lot of money. 0:28:24.761 --> 0:28:26.881 Yeah, we'll be back after this. We're going to talk 0:28:26.921 --> 0:28:30.081 about foreign buyers, bans, News Talk z B the Weekend 0:28:30.161 --> 0:28:31.321 Collective with Jason Walls. 0:28:31.921 --> 0:28:38.681 N You can see. 0:28:42.481 --> 0:28:45.241 News Talk zed by or with The Weekend Collective with 0:28:45.401 --> 0:28:48.881 Jason Walls filling in for Tim Beverage this week here 0:28:49.001 --> 0:28:54.441 with Ed mcnight's Economists Extraordinaire talking property, talking everything to 0:28:54.521 --> 0:28:56.401 do with the market, mortgage rates, and we're going to 0:28:56.441 --> 0:28:59.121 talk now about the foreign buyers ban. Now we know 0:28:59.241 --> 0:29:01.281 that that is still in place. It was in play 0:29:01.601 --> 0:29:04.721 before the election. The Nats wanted to bring to reverse 0:29:04.761 --> 0:29:07.041 the feign buyers ban so they can tax the heck 0:29:07.281 --> 0:29:09.841 out of a bunch of the wealthy foreigners coming into 0:29:09.881 --> 0:29:12.881 New Zealand. It was a two million dollar cap I 0:29:12.921 --> 0:29:14.401 think it was. You had to build, you had to 0:29:14.521 --> 0:29:18.121 buy a house for at least two million dollars if 0:29:18.161 --> 0:29:20.561 you wanted to get a buy the foreign buyers ban. 0:29:20.641 --> 0:29:24.481 But Winston old Winston Raymond Peters wanted nothing of the sort. 0:29:24.601 --> 0:29:27.281 He kaiboshed that one, and so the Nats had to 0:29:27.361 --> 0:29:30.361 find their tax cuts revenues somewhere else, which they did 0:29:30.401 --> 0:29:33.361 because we all got a tax cut ed. I did 0:29:33.441 --> 0:29:36.481 see an article that was quite interesting. It said that 0:29:36.521 --> 0:29:40.721 there are some rumors about this foreign buyers ban being reversed. 0:29:41.161 --> 0:29:43.361 What have you seen this? Have you heard any rumors? 0:29:43.521 --> 0:29:44.801 You have your ear to the ground. 0:29:44.961 --> 0:29:47.521 I personally haven't heard any Rumors's as just said, when 0:29:47.561 --> 0:29:50.521 you see an article online that says, oh, rumors are swirling, 0:29:50.561 --> 0:29:53.041 and you're like, I wonder who's coming up with these rumors. 0:29:53.241 --> 0:29:55.441 But the ones that I have read is that the 0:29:55.681 --> 0:29:58.641 foreign buyer ban may be relaxed for any properties that 0:29:58.721 --> 0:30:01.361 are worth five million dollars plus rather than the two 0:30:01.401 --> 0:30:03.921 million dollars that was proposed at the election. So I 0:30:04.001 --> 0:30:06.201 wanted to dive into the the numbers and say, okay, 0:30:06.281 --> 0:30:10.161 I wonder how many properties in New Zealand actually sell 0:30:10.521 --> 0:30:13.481 for five milli or more, because those must be some really, 0:30:13.601 --> 0:30:14.601 really nice properties. 0:30:14.641 --> 0:30:14.761 Now. 0:30:14.841 --> 0:30:17.561 The interesting thing when I first ran these numbers, when 0:30:18.041 --> 0:30:22.201 the discussion was about a two million dollar cap, something 0:30:22.401 --> 0:30:25.281 like three percent of properties in New Zealand sell for 0:30:25.361 --> 0:30:28.801 two million dollars or more. In Auckland properties are more expensive, 0:30:28.841 --> 0:30:31.921 so it's something like eight percent. So I re ran 0:30:32.001 --> 0:30:36.201 my numbers today and only a minute percentage of properties 0:30:36.321 --> 0:30:38.841 actually do sell for five milli or more. I mean, 0:30:39.481 --> 0:30:41.481 throughout twenty twenty four, for the numbers that I have, 0:30:41.881 --> 0:30:44.921 it was less than point one of a percent. It 0:30:45.081 --> 0:30:48.721 was zero point zero eight percent. We're talking about very 0:30:48.841 --> 0:30:52.681 small numbers, are under two hundred in total. If we're 0:30:52.681 --> 0:30:55.921 thinking about the Auckland region, we've got those more expensive 0:30:55.961 --> 0:30:59.761 house prices, it's half a percent. And only down in 0:30:59.881 --> 0:31:03.441 Queenstown where house prices are really expensive. Do you get 0:31:03.481 --> 0:31:06.441 any significant numbers. It was about two percent last year. 0:31:06.801 --> 0:31:08.761 And then as I was driving here to talk to 0:31:08.761 --> 0:31:10.921 you today, Jason, I was thinking, okay, let's say that 0:31:11.081 --> 0:31:14.321 Nikola Willis and Christopher Luxen say yeah, we're going to 0:31:14.361 --> 0:31:17.721 relax the foreign buyer ban five million dollars plus. I 0:31:17.801 --> 0:31:19.641 was kind of thinking, well, I wonder what the reason 0:31:19.761 --> 0:31:22.721 why is, Because they were suggesting they were going to 0:31:22.801 --> 0:31:25.201 raise something along the lines of seven hundred and forty 0:31:25.281 --> 0:31:28.521 million dollars through this proposal. And then you say, okay, 0:31:28.801 --> 0:31:31.601 there's quite a decent amount of money for properties worth 0:31:31.681 --> 0:31:35.041 two million dollars or more. Well, if you then say, well, no, no, no, 0:31:35.321 --> 0:31:38.601 it's only for five million dollar properties. Plus, you cut 0:31:38.721 --> 0:31:41.961 out about ninety percent of the properties that would be taxed, 0:31:42.321 --> 0:31:44.521 and so then you say, well, maybe it's closer to 0:31:44.881 --> 0:31:47.601 seventy four million dollars worth of revenue, and you say, okay, 0:31:47.721 --> 0:31:50.001 maybe that's not worth it. Now, let's be clear that 0:31:50.041 --> 0:31:53.721 won't be the exact number. Because even though ninety we 0:31:53.841 --> 0:31:55.881 might cut out ninety percent of the properties that would 0:31:55.881 --> 0:31:57.921 have been taxed under the proposal that National took to 0:31:58.001 --> 0:32:01.041 the election, These properties that would be taxed under the 0:32:01.121 --> 0:32:04.721 five million dollar cap, though they will be much higher value. 0:32:04.761 --> 0:32:07.041 So you might not cut out all of that or 0:32:07.121 --> 0:32:09.841 a massive percentage of that text, but it'd be pretty 0:32:09.921 --> 0:32:10.681 large in my view. 0:32:10.801 --> 0:32:12.841 Yeah, you just look at it. You said, seventy four 0:32:12.881 --> 0:32:15.681 million dollars. I mean, they're or thereabouts. It's pocket change 0:32:15.681 --> 0:32:18.001 for a government. That's just not enough money for them 0:32:18.041 --> 0:32:19.841 to actually I mean it's seventy four million for you 0:32:19.961 --> 0:32:22.481 and I or everybody listening. Seventy four million dollars is 0:32:22.561 --> 0:32:25.081 clearly a life changing amount of money, but when you're 0:32:25.121 --> 0:32:27.201 dealing with the amount of money that the government is, 0:32:27.321 --> 0:32:30.201 seventy four million dollars is not enough to move any 0:32:30.321 --> 0:32:32.881 dials in a degree that makes any sort of difference 0:32:32.881 --> 0:32:33.121 at all. 0:32:33.241 --> 0:32:35.841 And then I was thinking, as well, well, if Nicola 0:32:35.881 --> 0:32:38.081 Willis does that, then brings in you know, let's sounds 0:32:38.081 --> 0:32:40.441 one hundred and fifty million or even two hundred million dollars. 0:32:40.521 --> 0:32:44.561 I was just thinking, is that enough to make up 0:32:44.721 --> 0:32:48.041 for the political capital you've got to spend in order 0:32:48.081 --> 0:32:50.161 to be able to do that? Now, maybe New Zealanders 0:32:50.241 --> 0:32:53.401 don't care if properties that are worth five million dollars 0:32:53.561 --> 0:32:56.881 or more get sold to foreign buyers, given that most 0:32:56.921 --> 0:33:00.641 of us aren't buying those properties anyway. In fact, ninety 0:33:00.761 --> 0:33:03.761 nine point nine percent of us are not buying those 0:33:03.841 --> 0:33:06.241 properties at will give at least than point one of 0:33:06.281 --> 0:33:08.321 a percent of properties in New zeal And self for 0:33:08.361 --> 0:33:09.361 that five million dollars. 0:33:09.481 --> 0:33:12.081 Yeah, and I'll tell you what, seventy four million dollars 0:33:12.201 --> 0:33:13.881 is just simply not enough money to get on the 0:33:13.921 --> 0:33:16.881 bad side of Winston Peters. He came and he kiboshed 0:33:17.081 --> 0:33:19.481 this idea from the NATS. I mean, I remember thinking 0:33:19.521 --> 0:33:21.601 at the time when I was reporting on it seems 0:33:21.681 --> 0:33:24.401 like a fair idea. You know, we need to change 0:33:24.681 --> 0:33:26.961 the way that we look about foreign buyers because if 0:33:27.041 --> 0:33:29.561 somebody is coming into New Zealand and they're a wealthy 0:33:29.681 --> 0:33:32.361 high net worth individual, they're looking for wealthy high networth 0:33:32.401 --> 0:33:36.001 individual houses. So we're taking away not just the house, 0:33:36.041 --> 0:33:39.121 but the person's job. Winston saw all of these arguments 0:33:39.161 --> 0:33:41.041 and decided, Nope, it's not going to have it. It's 0:33:41.081 --> 0:33:44.641 not my political stripes. And so seventy four million dollars 0:33:44.721 --> 0:33:46.761 is not enough money to go cap in hand to 0:33:46.801 --> 0:33:50.001 Winston and say can we please change this? And I'll 0:33:50.001 --> 0:33:52.281 tell you why. Nicola Willis, when she was at the 0:33:52.321 --> 0:33:55.961 Half year Economic and Fiscal update before December, was asked 0:33:56.001 --> 0:33:58.481 this very question and she gave me a very very 0:33:58.521 --> 0:34:02.121 interesting answer. She said, we asked, you know, you're looking 0:34:02.161 --> 0:34:04.561 for revenue. You've said that time and time again. You're 0:34:04.561 --> 0:34:07.201 looking for revenue. The economy is not as good as 0:34:07.241 --> 0:34:09.761 it was. You're missing a bunch of tax revenue. What 0:34:10.001 --> 0:34:11.801 new taxes are you thinking of? And I think it 0:34:11.921 --> 0:34:14.881 was I think unprompted or somebody asked her about their 0:34:14.921 --> 0:34:18.241 foreign buyers bam, and she said, well, you know, we 0:34:18.401 --> 0:34:21.441 are in a coalition agreement, a coalition where that has 0:34:21.481 --> 0:34:25.041 been agreed, but you know there's new coalition agreements, there's 0:34:25.081 --> 0:34:27.001 new terms and governments. It might be something we can 0:34:27.041 --> 0:34:29.081 look at down the road. So she's clearly got it 0:34:29.321 --> 0:34:31.601 in the back of her mind. Still, it's clearly something 0:34:31.681 --> 0:34:33.361 that it's in the NAT's wheelhouse. They just need to 0:34:33.641 --> 0:34:34.401 win Winston over. 0:34:34.721 --> 0:34:37.641 The other thing that I would anticipate that Nicola Willis 0:34:37.681 --> 0:34:42.361 would look at is well, is the fifteen percent tanks 0:34:42.721 --> 0:34:45.921 that we proposed at the election still appropriate? So I 0:34:46.041 --> 0:34:47.961 was also thinking as I was driving here, because that's 0:34:47.961 --> 0:34:48.681 where most of us. 0:34:48.761 --> 0:34:50.721 Sounds a productive drive, you had, well, that's what we 0:34:50.841 --> 0:34:51.081 all do. 0:34:51.241 --> 0:34:53.721 Right, that's how thinking time in the car unless you've 0:34:53.721 --> 0:34:56.601 got the kids in the back seat, you drop. I 0:34:56.681 --> 0:34:59.521 was thinking, well, how could she get Winston over the line? Well, 0:34:59.561 --> 0:35:02.441 maybe it's not a fifteen percent tax on the purchase price. 0:35:02.641 --> 0:35:05.001 Maybe it's a twenty five percent or a twenty percent tank. 0:35:05.161 --> 0:35:07.561 Maybe that's scratchet it way up. Maybe that's the other 0:35:07.721 --> 0:35:10.201 lever that she can pull to bring in more tax 0:35:10.281 --> 0:35:12.401 revenue so that we get that number up a bit. 0:35:12.761 --> 0:35:14.761 And again it's probably going to be more than seventy 0:35:14.841 --> 0:35:17.481 four million dollars just because those properties that do sell 0:35:18.321 --> 0:35:21.161 are at a very very high amount. But you know, 0:35:21.281 --> 0:35:23.321 it kind of gives you the scale of it. 0:35:23.561 --> 0:35:23.761 Yeah. 0:35:23.961 --> 0:35:27.641 Interesting. I mean you would have to think from a rich, 0:35:28.121 --> 0:35:30.721 wealthy individual that's coming into New Zealand. How and I 0:35:30.721 --> 0:35:33.201 always get the terminology wrong here. You're an economist, how 0:35:33.441 --> 0:35:36.801 elastic or inelastic is that in terms of attacks on 0:35:36.881 --> 0:35:39.321 a house? If it goes from fifteen to twenty would 0:35:39.361 --> 0:35:40.761 that be enough to prevent you from coming in? 0:35:41.081 --> 0:35:41.281 Yeah? 0:35:41.321 --> 0:35:43.481 So what you're really asking is are people going to 0:35:43.521 --> 0:35:45.721 pay it if you increase it from fifteen to twenty 0:35:45.801 --> 0:35:48.881 five percent? Well, one thing that's really interesting is how 0:35:49.001 --> 0:35:52.121 expensive other houses are. So often we talk in New 0:35:52.201 --> 0:35:54.681 Zealand that our houses are expensive and they are relative 0:35:54.761 --> 0:35:58.481 to our incomes. But if we look at some really 0:35:58.601 --> 0:36:02.641 rich overseas countries, their houses are really expensive. So it's 0:36:02.721 --> 0:36:04.801 quite interesting. I was over in Switzerland over the hool 0:36:04.801 --> 0:36:07.441 of that. I was really lucky to go over there. 0:36:07.641 --> 0:36:10.441 And of course whenever I go overseas or to another 0:36:10.561 --> 0:36:12.961 town that's not Auckland, I do want most of us 0:36:13.001 --> 0:36:15.921 to I look at the houses for sale in the 0:36:16.001 --> 0:36:19.601 real estate and the real estate company's windows, and it 0:36:19.801 --> 0:36:24.201 is amazing, like eyeboggling, how expensive houses are in places 0:36:24.281 --> 0:36:28.521 like Switzerland and and parts of Germany, and even in 0:36:28.641 --> 0:36:32.921 parts of China. You know, properties in Shanghai or Soul 0:36:33.041 --> 0:36:35.921 in Korea, they can be incredibly expensive. So somebody could 0:36:35.921 --> 0:36:38.041 sell an apartment and Soul come over here and with 0:36:38.161 --> 0:36:40.841 the exchange rate and still buy a really, really nice house. 0:36:41.481 --> 0:36:46.161 Because our properties to us are expensive, to some foreign 0:36:46.241 --> 0:36:49.481 buyers from some countries, they can look relatively affordable. 0:36:49.681 --> 0:36:52.881 Yeah, interesting stuff and will be back after this news 0:36:53.001 --> 0:36:55.321 talk ZBI the. 0:36:55.441 --> 0:36:58.001 One roofed Property of the Week on the weekend. 0:36:58.081 --> 0:37:04.041 Collective Ladies and Gentlemen start your end. No, don't start 0:37:04.081 --> 0:37:07.801 your engines. The property of the week this week is 0:37:07.881 --> 0:37:12.001 down in Warnaca, forty Riversley Road. Now, this is a 0:37:12.081 --> 0:37:15.721 beautiful five bedroom, three bathroom, two car garage. 0:37:16.201 --> 0:37:16.441 It was. 0:37:16.561 --> 0:37:19.961 It's the house itself three hundred and fifty five square meters, 0:37:20.001 --> 0:37:24.681 the land is one thousand, four hundred and nineteen square meters. 0:37:24.721 --> 0:37:27.681 It goes to auction on the February the twentieth estimated 0:37:27.801 --> 0:37:30.881 just a cool two point ninety three million, the low 0:37:31.081 --> 0:37:34.761 two point four nine, the high three point three seven, 0:37:35.161 --> 0:37:38.841 with an RV of two point two six. I can 0:37:38.881 --> 0:37:41.441 see myself living in this place. It's got this beautiful pool. 0:37:41.961 --> 0:37:46.241 The sunset views are amazing. That's got this giant, giant 0:37:46.321 --> 0:37:47.001 kitchen island. 0:37:47.041 --> 0:37:49.481 What do you think The amazing thing about Warnica is 0:37:49.521 --> 0:37:51.801 it's not necessarily about the house. That's not why you 0:37:51.921 --> 0:37:54.121 move there. You move there because when you look at it, 0:37:54.281 --> 0:37:57.721 the hills and the mountains and they're absolutely golden. That's 0:37:57.721 --> 0:37:59.281 the sort of place you want to be. The really 0:37:59.361 --> 0:38:02.641 interesting thing about this house, and I'd suggest people go 0:38:02.961 --> 0:38:05.961 have a look at this song one roof forty Riversley Road. 0:38:06.001 --> 0:38:09.401 We said it was is a really good place for 0:38:09.721 --> 0:38:11.721 people who want to go as a holiday home. And 0:38:11.721 --> 0:38:13.441 I'll tell you the reason why. If you look at 0:38:13.521 --> 0:38:16.881 the floor plan, what you want if you're going to 0:38:16.961 --> 0:38:21.761 buy an expensive holiday home is you want enough space 0:38:22.201 --> 0:38:24.201 for all of your friends to come. And what you 0:38:24.321 --> 0:38:27.241 often see in architectural houses like this is you'll have 0:38:27.521 --> 0:38:30.281 one large master bedroom which is exactly what you've got. 0:38:30.361 --> 0:38:32.281 It's got a huge on suite, and then what you 0:38:32.481 --> 0:38:34.881 often see is there will be a number of other 0:38:34.961 --> 0:38:39.001 bedrooms that are all exactly the same, all identical. And 0:38:39.121 --> 0:38:40.881 that's really good because then if you have a couple 0:38:40.921 --> 0:38:43.881 of friends over who are all couples to stay, if 0:38:43.881 --> 0:38:46.601 you've got three million dollars to spend on ours, then 0:38:46.801 --> 0:38:48.881 they don't get jealous of each other. It's all the same, 0:38:48.961 --> 0:38:51.081 so it's really good. And you actually see that with 0:38:51.201 --> 0:38:53.361 this house. You have another bedroom that's got an on suite, 0:38:53.401 --> 0:38:55.841 and you've got three bedrooms that are all identical, so 0:38:56.041 --> 0:38:58.761 really really good rooms for kids and also for guests. 0:38:59.081 --> 0:39:00.921 So if you do happen to have a cool three 0:39:01.001 --> 0:39:04.521 million dollars, this is probably quite good shopping, I would 0:39:04.521 --> 0:39:07.441 have thought. With amazing views of those mountains and and 0:39:07.721 --> 0:39:11.241 just the best place to have guests over for those holidays, 0:39:11.681 --> 0:39:13.841 which I'm sure we're all thinking about now that we're 0:39:13.921 --> 0:39:14.961 just coming back to work. 0:39:15.041 --> 0:39:17.041 I'll tell you what. It's also got a dedicated kids 0:39:17.201 --> 0:39:19.481 media room, which sounds incredible. 0:39:19.641 --> 0:39:21.281 Well, of course, one of the main things you want 0:39:21.321 --> 0:39:23.121 to do when you go away on holidays. No, we 0:39:23.161 --> 0:39:26.401 don't want any of that family time, Chuck, the kids 0:39:26.441 --> 0:39:28.841 all go off into the media where you're Sally and 0:39:28.961 --> 0:39:32.241 Tim go into the kids media room. We're off having 0:39:32.401 --> 0:39:35.721 our rose wine out on the deck as adult time. 0:39:35.801 --> 0:39:39.401 So check it out. That's forty riversly road on one roof. 0:39:39.601 --> 0:39:42.201 Yeah, I mean probably you could do some great barbecuing 0:39:42.201 --> 0:39:43.481 out there. In the break you were telling me about 0:39:43.481 --> 0:39:45.281 your charcoal barbecue. Do you think you can get some 0:39:45.321 --> 0:39:47.121 good charcoal barbecuing done out there? 0:39:47.241 --> 0:39:47.361 Oh? 0:39:47.401 --> 0:39:49.121 Well, that's the amazing thing. When you buy a house, 0:39:49.161 --> 0:39:50.801 you've really got to look at the channels. Because what 0:39:50.921 --> 0:39:52.401 I was able to school when I just bought my 0:39:52.521 --> 0:39:54.441 house was this. I think it's probably worth about two 0:39:54.521 --> 0:39:57.841 or three grand, this massive charcoal barbecue, which I'm pretty 0:39:57.881 --> 0:40:01.441 sure the previous owners just couldn't be bothered moving. So 0:40:01.561 --> 0:40:03.681 we got that. So I was very happy so after this, 0:40:03.881 --> 0:40:06.121 I'm going to go and I've bought my charcoal. I'm 0:40:06.121 --> 0:40:08.081 gonna go fire that up for the first time. Because 0:40:08.841 --> 0:40:11.761 young guys in their thirties, my understanding is you make 0:40:11.881 --> 0:40:14.081 one of three things your personality's way. 0:40:14.081 --> 0:40:17.881 Where you're going to say, barbecuing, golf or running. 0:40:19.041 --> 0:40:22.681 That's pretty close. Yeah, exercise and meat or alcohol is 0:40:22.721 --> 0:40:25.281 one of the other ones, and golf. So maybe I'll 0:40:25.281 --> 0:40:27.281 see if we can make meat part of my personality 0:40:27.321 --> 0:40:28.081 and my soluberity. 0:40:28.121 --> 0:40:29.561 I mean, it sounds like you've got some pretty good 0:40:29.601 --> 0:40:30.361 things on the menu. 0:40:30.841 --> 0:40:30.881 Ed. 0:40:31.001 --> 0:40:32.521 Thank you so much for joining us. It's been a 0:40:32.561 --> 0:40:36.721 fantastic hour. We got the Parenting Hour coming up. Next, 0:40:37.321 --> 0:40:40.881 the Parenting Squad will return to News Talk z B. 0:40:41.121 --> 0:40:42.321 It's just about five o'clock. 0:41:01.081 --> 0:41:03.801 For more from the weekend collective, listen live to News 0:41:03.881 --> 0:41:06.841 Talk zed B we Care from three pm, or follow 0:41:06.921 --> 0:41:08.521 the podcast on iHeartRadio.