Latest / The SME Stream / Steve Jurkovich: Kiwibank CEO on the State of Home Ownership Index

Transcript

Steve Jurkovich: Kiwibank CEO on the State of Home Ownership Index · The SME Stream

• 0:00
  Speaker 1: Just a reminder this morning of the role that housing
• 0:02
  Speaker 1: plays in the key we psyche Qwebank State of Home
• 0:04
  Speaker 1: Ownership report shows eighty five percent of say owning a
• 0:07
  Speaker 1: home remains a key goal. Forty three percent believe it's
• 0:09
  Speaker 1: now more achievable, which is up seven percent, which is good.
• 0:12
  Speaker 1: Stability and security are your big drivers. Eighty eight percent
• 0:16
  Speaker 1: wanting the independence of their own space. Steve Yukovic is
• 0:18
  Speaker 1: the Qewi Bank CEO and he's with us. Steve, morning
• 0:21
  Speaker 1: to you on morning. It has always been that way
• 0:24
  Speaker 1: and it always will be. Is that a fair statement
• 0:26
  Speaker 1: to make we love houses?
• 0:27
  Speaker 2: I think yeah, I think it is. It's at the
• 0:29
  Speaker 2: heart of what people feel about security and how they
• 0:32
  Speaker 2: feel like they can get ahead and the people.
• 0:34
  Speaker 1: What about attitude to debt? To people's attitude to debt change?
• 0:37
  Speaker 1: For example, were borrowing more? Are we more bullish about
• 0:40
  Speaker 1: the market at the moment or not?
• 0:42
  Speaker 2: I think the big change is how much people are
• 0:44
  Speaker 2: feeling about what they can do to repay debt as
• 0:46
  Speaker 2: quickly as they can, which makes a lot of sense
• 0:48
  Speaker 2: and is a great decision. So lots of customers in
• 0:51
  Speaker 2: the survey said, you know, when they get the option
• 0:53
  Speaker 2: they want to pay it down fast. Are they're thinking
• 0:55
  Speaker 2: about shortening up the term of their loan, thinking about
• 0:59
  Speaker 2: how they borrow different least, So there's definitely been a
• 1:01
  Speaker 2: big change around how people feel about borrowing. It used
• 1:05
  Speaker 2: to be pretty set and forget that's no longer the case.
• 1:07
  Speaker 1: Yeah, are you going to view on a fifty year mortgage?
• 1:11
  Speaker 2: Yeah? I mean that's that feels like a pretty wild idea.
• 1:15
  Speaker 2: I honestly don't think that in New Zealand. The market's
• 1:17
  Speaker 2: deep enough to work out how you would price that.
• 1:21
  Speaker 2: But you know, the advice I got when I first
• 1:23
  Speaker 2: bought a home from a very experienced guy was, you know,
• 1:26
  Speaker 2: pick the shortest team you can and pay it off
• 1:27
  Speaker 2: as fast as you can. So I still think that
• 1:29
  Speaker 2: makes sense.
• 1:29
  Speaker 1: Yeah, what a most people do initially? Do they go
• 1:32
  Speaker 1: twenty five to thirty?
• 1:34
  Speaker 2: Yeah? They do. Yeah, the default is pretty much twenty years.
• 1:37
  Speaker 2: A lot of people do twenty five. There is the
• 1:40
  Speaker 2: option to do thirty, but very few people take that. Right.
• 1:42
  Speaker 1: The number in your work that worries me, the forty
• 1:45
  Speaker 1: three percent of nine owners who think they'll never own.
• 1:48
  Speaker 1: How real is that versus just it's psychological?
• 1:52
  Speaker 2: I think it's pretty rareal. I mean getting together. You know,
• 1:55
  Speaker 2: one hundred and fifty two hundred thousand dollars is a
• 1:57
  Speaker 2: deposit with the current cost of living headwinds as a real,
• 2:01
  Speaker 2: real battle. I think that numbers always been pretty consistent
• 2:05
  Speaker 2: about how hard it is to get that money together.
• 2:09
  Speaker 2: So I think that's real.
• 2:10
  Speaker 1: So how do we juxtapose what we know is real
• 2:13
  Speaker 1: the forty three percent who feel they're locked out versus
• 2:16
  Speaker 1: the twenty seven percent is who are first home buyers
• 2:19
  Speaker 1: who clearly aren't locked out and they can buy a
• 2:21
  Speaker 1: house and they're the major players in the market.
• 2:24
  Speaker 2: Look, I really, deep down believe that if you know,
• 2:26
  Speaker 2: whatever you believe is true. So you know, if you
• 2:29
  Speaker 2: think you can get there and you can save the money,
• 2:31
  Speaker 2: then that's true. If you think it's too hard, that's
• 2:34
  Speaker 2: true as well. I mean a lot of people thinking
• 2:36
  Speaker 2: differently about how they would buy a house might so
• 2:39
  Speaker 2: I think, you know, it makes total sense. You know,
• 2:41
  Speaker 2: many cultures pacifica Madi, many Asian countries. You know, generations
• 2:47
  Speaker 2: living together in the same house is very normal. So
• 2:50
  Speaker 2: if you think about getting together with your parents and
• 2:53
  Speaker 2: your grandparents to try and buy a house, and then
• 2:55
  Speaker 2: you've got different leavers, and so I think as New
• 2:58
  Speaker 2: Zealand's you know, face and shape chain, you'll see people
• 3:01
  Speaker 2: buying houses in different ways.
• 3:03
  Speaker 1: How big is the bank of mum and Dad now
• 3:04
  Speaker 1: at the moment?
• 3:06
  Speaker 2: Oh? Still huge. I mean a massive amount of money
• 3:09
  Speaker 2: is supported for the kids getting up on that first
• 3:11
  Speaker 2: step on the ladder. And I'd probably say thirty to
• 3:14
  Speaker 2: forty percent of people get supports somehow from a bar
• 3:18
  Speaker 2: of family or fun.
• 3:18
  Speaker 1: Now, okay, I'm getting some mail. Help me out here.
• 3:22
  Speaker 1: Swap rates are problematic post Hawksby's announcement the other day
• 3:26
  Speaker 1: fixed rates are going up. Is there an issue here
• 3:28
  Speaker 1: or not?
• 3:30
  Speaker 2: No? I think well, I mean we talked about it
• 3:32
  Speaker 2: the other day. I'm pretty convinced we're at the bottom.
• 3:35
  Speaker 2: And if you're at the bottom, then when you look ahead,
• 3:37
  Speaker 2: normally things are going up. And so market says that
• 3:40
  Speaker 2: rates are going up early next year. So March April May,
• 3:43
  Speaker 2: I think we might see a tickup.
• 3:45
  Speaker 1: So now's your window to act if you want to
• 3:47
  Speaker 1: act without giving the financial advice to people is just said,
• 3:51
  Speaker 1: are we about to turn?
• 3:53
  Speaker 2: So?
• 3:53
  Speaker 1: In other words, right now is the sweet spot.
• 3:56
  Speaker 2: When you look back ten years, this looks like very
• 3:58
  Speaker 2: close to the bottom. And if you think about what
• 4:00
  Speaker 2: the average rates over ten to fifteen years are, this
• 4:03
  Speaker 2: is lower than average. So you've got to say this
• 4:05
  Speaker 2: is close to the bottom.
• 4:06
  Speaker 1: Good stuff to appreciate it as always Steve Yukovic the
• 4:09
  Speaker 1: Kiwi Bank. Yes, swap rates continuing to trade higher post
• 4:12
  Speaker 1: the monetary announcement. Two year rates are up thirty one
• 4:15
  Speaker 1: basis points. And the reason I'm telling you this swap
• 4:19
  Speaker 1: rate that it's the market going. Hawksby was too blunt.
• 4:23
  Speaker 1: Hawksby said it's over. The market might have priced in
• 4:26
  Speaker 1: one more cut in the new year. Because he was
• 4:29
  Speaker 1: so explicit on his way out. We don't need to
• 4:32
  Speaker 1: worry about that anymore. In fact, one of the pieces
• 4:34
  Speaker 1: of mail this morning said Hawksby sabotaged the recovery on
• 4:37
  Speaker 1: his way out the door. So we're thinking about For
• 4:41
  Speaker 1: more from the Mic Asking Breakfast, listen live to news talks.
• 4:44
  Speaker 2: It'd be from six am weekdays, or follow the podcast
• 4:47
  Speaker 2: on iHeartRadio.