Latest / Best of Business / Brad Olsen: Infometrics principal economist on new data revealing more Kiwis are moving

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Brad Olsen: Infometrics principal economist on new data revealing more Kiwis are moving · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk ZEDB. Follow
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  Speaker 2: Brad Olson, Infametric's principal economist, is with us.
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  Speaker 3: Hello, Brad, good evening.
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  Speaker 2: We're moving house a lot at the moment, are we?
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  Speaker 3: It seems that way. The latest census starter out from
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  Speaker 3: statsenz does show that over time we've been seeing quite
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  Speaker 3: a lot of moving. Around forty five percent of New
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  Speaker 3: Zealander's moved addressed over the five years between twenty eighteen
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  Speaker 3: and twenty twenty three, slightly higher than the last five
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  Speaker 3: year period, so obviously quite a lot of shift. Two
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  Speaker 3: big trends that came through in the numbers, though generally
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  Speaker 3: a bit more of a shift south than we normally see,
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  Speaker 3: particularly into the likes of Otago and Canterbury, but also
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  Speaker 3: a real shift where previously everyone was flocking to the cities.
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  Speaker 3: Now it's a little bit it's not an exodus, but
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  Speaker 3: definitely a bit of a shift where people are trying
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  Speaker 3: to find an option nearby to a city but not
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  Speaker 3: in the middle of the congestion. People seeming to like
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  Speaker 3: those sort of fruiting areas outside the main urban centers
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  Speaker 3: where they can get a better lifestyle offering probably a
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  Speaker 3: slightly cheaper house price. Seems to be sort of a
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  Speaker 3: bit of a sweet spot.
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  Speaker 2: Are we're moving more than we normally would, We're.
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  Speaker 3: Moving ever so slightly more so. Back in over the
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  Speaker 3: five years to twenty eighteen, about forty four point six
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  Speaker 3: percent of the population shifted address forty five point two percent,
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  Speaker 3: so a little bit more over the five years to
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  Speaker 3: twenty twenty three. Now, of course that's normal, like people move,
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  Speaker 3: it's just often you don't make huge, huge moves. Seventy
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  Speaker 3: seven percent of New Zealanders who moved within the last
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  Speaker 3: five years, they still stayed within the same region, so
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  Speaker 3: pretty close to you know, wherever original home base, whether
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  Speaker 3: they're not sort of shifting massively. Sixteen point six percent
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  Speaker 3: moved to a different region on the same island, and
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  Speaker 3: that so again often people staying a little bit closer
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  Speaker 3: to what they'd normally have. But put it this way,
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  Speaker 3: I think what you're seeing and what you've really had
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  Speaker 3: emerged since COVID has come through, is that working from
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  Speaker 3: home is now much greater focus for people, and that's
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  Speaker 3: opening up a lot of employment opportunities, a lot of
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  Speaker 3: new housing opportunities, which means that the old idea of
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  Speaker 3: go to the cities that's where all the economic activity
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  Speaker 3: is isn't strictly true anymore.
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  Speaker 2: Okay, Brad, can you please explain how the ratings valuations
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  Speaker 2: work for people who think that their property having fallen
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  Speaker 2: should lead to a ratings decrease.
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  Speaker 3: Yes, and I can understand because normally, right, we haven't
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  Speaker 3: gone through many periods in New Zealand's history where house
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  Speaker 3: prices have gone down, certainly not by quite as much effectively, though,
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  Speaker 3: the council is using the rating valuations to help split
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  Speaker 3: up the rates pie. And so because there's an average
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  Speaker 3: increase this year I think in Auckland of around five
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  Speaker 3: point eight percent if you've had a so that's what
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  Speaker 3: the average household would get. Now we also know the
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  Speaker 3: average house has fallen in price by around about nine
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  Speaker 3: percent over the period. So if you've had a nine
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  Speaker 3: percent full you're still going to pay five point eight
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  Speaker 3: percent more in rate. If you've had a larger than
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  Speaker 3: nine percent fall, you'll probably have a slightly smaller increase
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  Speaker 3: in rates. It'll go up, but maybe by just a
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  Speaker 3: couple percentage points. If your house hasn't fallen quite as much.
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  Speaker 3: If it's fallen by less than that nine percent, you're
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  Speaker 3: going to pay probably more than a six percent increase
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  Speaker 3: in rates this year only because the cost of delivering services
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  Speaker 3: has gone up. There's more people. Everything's become a whole
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  Speaker 3: lot more expensive, both for households but also for councils
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  Speaker 3: who've got to buy some of those services. So the ratings,
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  Speaker 3: the cvs, they're not a good measure of what your
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  Speaker 3: house is actually worth at any given time. They's sort
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  Speaker 3: of a snapshot. We almost shouldn't publish them. You do
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  Speaker 3: wonder where a council should sort of say, look every
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  Speaker 3: house and you know your house, Heather is going to
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  Speaker 3: pay zero points zero zero one two percent of the
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  Speaker 3: total rates bill and that's what you get.
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  Speaker 2: Yep. Is it possible that people that some people may
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  Speaker 2: have had a fall in their house value that is
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  Speaker 2: so massive that they end up with the rates increase,
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  Speaker 2: a decrease, possibly number cent falls.
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  Speaker 3: Potentially, but it would also probably depend on the services
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  Speaker 3: that are getting from the council, where they are in
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  Speaker 3: the city. I mean, one thing that we noted from
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  Speaker 3: Auckland Council is that some of the apartments in the
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  Speaker 3: central city have seen some pretty big decreases relative to otherwise.
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  Speaker 3: But again in the city, they're using a lot of
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  Speaker 3: the resources that come through that, you know, all of
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  Speaker 3: the roads, all of the wastewater, storm water, water services
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  Speaker 3: and that, so it'd be a very unusual situation that
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  Speaker 3: anyone's rates would outright go down. The biggest win you
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  Speaker 3: can probably get is having a larger fall and not
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  Speaker 3: too big of a rates increase this time around.
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  Speaker 2: Yeah, Brad, thank you as always appreciated. Brad Olson, informatric's
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  Speaker 2: principal economists.
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