Latest / Early Edition with Ryan Bridge / Kelvin Davidson: Cotality Chief Property Economist on National's plan to expand the First Home Loan scheme

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Kelvin Davidson: Cotality Chief Property Economist on National's plan to expand the First Home Loan scheme · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: National is promising to make it easier to get into
• 0:02
  Speaker 1: your first home if it's re-elected. Plan is to give
• 0:05
  Speaker 1: more people access to 5% deposits by doubling Kāinga Order's
• 0:09
  Speaker 1: income cap to $.
• 0:10
  Speaker 2: 300, 000.
• 0:10
  Speaker 3: The income caps are just way too restrictive. And it
• 0:14
  Speaker 3: means that right now a junior doctor earning $ 100, 000 cannot
• 0:18
  Speaker 3: access the scheme. Nor can a young couple made up
• 0:21
  Speaker 3: of an electrician say earning $ 85, 000 and a teacher on $ 78, 000.
• 0:26
  Speaker 1: Joining me this morning, Kelvin Davidson, Cotality Chief Property Economist. Kelvin,
• 0:30
  Speaker 1: good morning.
• 0:31
  Speaker 2: Good morning.
• 0:32
  Speaker 1: Make a big difference, this?
• 0:34
  Speaker 2: I don't think it's going to transform things. I mean,
• 0:36
  Speaker 2: it's going to be great, obviously, for those individuals who
• 0:38
  Speaker 2: were previously shut out because their income was just a
• 0:41
  Speaker 2: bit high. They'll now be able to potentially get in
• 0:43
  Speaker 2: under this loan scheme. But It's not going to flood
• 0:46
  Speaker 2: the market. We already know first-time buyers are really strong anyway,
• 0:49
  Speaker 2: and values are still pretty flat despite that demand. So
• 0:52
  Speaker 2: good for those individuals, but I don't think it sort
• 0:54
  Speaker 2: of transforms the housing market for sure.
• 0:56
  Speaker 1: Does it have the– because we've spoken about this many times,
• 0:59
  Speaker 1: but does it have the possibility to increase the prices
• 1:01
  Speaker 1: at the lower end if there are more buyers going
• 1:05
  Speaker 1: to be available for competition?
• 1:08
  Speaker 2: Oh, potentially, potentially. But I think when you look across
• 1:11
  Speaker 2: the housing market right now, there's just so many listings
• 1:13
  Speaker 2: of all types and in all locations. There's still a
• 1:16
  Speaker 2: lot of new builds coming through. So I think that's
• 1:19
  Speaker 2: a pretty low risk. I think really here it's about
• 1:21
  Speaker 2: helping those individuals into those properties. And yeah, I think
• 1:26
  Speaker 2: that politically obviously looks pretty good and won't necessarily sort
• 1:30
  Speaker 2: of transform the housing market. As I say, we already
• 1:31
  Speaker 2: know first-time buyers are really strong anyway, lots of choice.
• 1:34
  Speaker 2: So I don't think too much of a price impact.
• 1:36
  Speaker 1: At a time like this, is it a solution looking
• 1:39
  Speaker 1: for a problem?
• 1:42
  Speaker 2: Well, some might argue that. Some might argue that. I'll
• 1:45
  Speaker 2: stay pretty neutral on that. I mean, I just think
• 1:46
  Speaker 2: there's things that obviously political parties want to do. It
• 1:52
  Speaker 2: does seem like something that did need updated. They said
• 1:56
  Speaker 2: the caps were set four or five years ago when
• 1:59
  Speaker 2: the market was looking different and incomes were looking different.
• 2:01
  Speaker 2: So it's probably just reflecting the current reality without necessarily
• 2:05
  Speaker 2: sort of transforming the housing market or putting up prices
• 2:10
  Speaker 2: massively either.
• 2:11
  Speaker 1: Good stuff. Good to have you on the show, Kelvin Davidson,
• 2:14
  Speaker 1: Cotality Chief Property Economist.