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Andrew Dickens: Could the housing crisis be over? · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: These days, we're always looking for any little clue that
• 0:02
  Speaker 1: the old normal is coming back. It was the fifth
• 0:05
  Speaker 1: anniversary of the pandemic yesterday. I don't think the new
• 0:09
  Speaker 1: normal is coming back. So let's look at houses. Asb
• 0:13
  Speaker 1: lowered its house price inflation forecast for this year, it's
• 0:16
  Speaker 1: chief economist Nick Toughly reckons the pickup in sales has
• 0:19
  Speaker 1: been sluggish. He says there's a lot of stock on
• 0:21
  Speaker 1: the market. They believe prices will fall to the first
• 0:24
  Speaker 1: half of this year. Therefore, the bank has more than
• 0:27
  Speaker 1: halved its house price growth forecast for twenty twenty five
• 0:31
  Speaker 1: from just or to just three point four percent when
• 0:34
  Speaker 1: it used to be nine three point four percent. That's
• 0:37
  Speaker 1: the capital growth you can expect. That's more in line
• 0:40
  Speaker 1: with inflation than for a long time. In other words,
• 0:42
  Speaker 1: buying a house at the moment is no longer the
• 0:44
  Speaker 1: path to automatic capital gain. Question is how long will
• 0:48
  Speaker 1: it last. Anyway, face with the fact that it's just
• 0:50
  Speaker 1: three point four percent of house inflation, house owners are
• 0:54
  Speaker 1: more likely to stay put. And you remember, back in
• 0:56
  Speaker 1: the old normal, churn was the name of the game.
• 0:58
  Speaker 1: You'd often buy and sell a lot to climb up
• 1:01
  Speaker 1: through the property ladder. I went through five houses in
• 1:04
  Speaker 1: five years to get to a better place. In today's climate,
• 1:08
  Speaker 1: you're more likely to stay in any house you own
• 1:10
  Speaker 1: because a bird in the hand is worth two in
• 1:12
  Speaker 1: the bush. And you want some stability, because stability and
• 1:14
  Speaker 1: security is now the new normal. So this is why
• 1:17
  Speaker 1: we've got more stock. And this, you have to say,
• 1:19
  Speaker 1: is more in line with overseas models where people stay
• 1:22
  Speaker 1: in their houses for longer, accepting the limitations of the
• 1:25
  Speaker 1: market and building a day to day life that they
• 1:29
  Speaker 1: can count on. Now in New Zealand, we've been through
• 1:31
  Speaker 1: boom and bust periods before and prices have always come back.
• 1:35
  Speaker 1: It's sort of like, oh, they always come back. It'll
• 1:38
  Speaker 1: come back, mate, But what if they don't? Is that
• 1:42
  Speaker 1: such a bad thing. People have often said that our
• 1:44
  Speaker 1: property fixation has been at the expense of real productivity growth. Anyway,
• 1:48
  Speaker 1: what will happen next is anyone's guest. But I'll tell
• 1:50
  Speaker 1: you something else. The bank pointed out something that I
• 1:53
  Speaker 1: got worried about. Immigration levels are staying stubbornly low after
• 1:57
  Speaker 1: booming right after the pandemic. We are not in attractive
• 2:00
  Speaker 1: destination and maybe that's because of the image we're presented
• 2:04
  Speaker 1: of ourselves as a basketplace economy. So look, anyway, maybe
• 2:08
  Speaker 1: the housing crisis is over, maybe we're going to have
• 2:11
  Speaker 1: a stable economy. But I'll tell you one thing. It's
• 2:13
  Speaker 1: not a get rich quick paradise anymore right now, but
• 2:17
  Speaker 1: it is a nice place to live. For more from
• 2:19
  Speaker 1: Early Edition with Ryan Bridge. Listen live to news Talks
• 2:22
  Speaker 1: it be from five am weekdays, or follow the podcast
• 2:26
  Speaker 1: on iHeartRadio.