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Peter Thompson: Barfoot & Thompson Managing Director on the growing confidence and optimism of the sector · The SME Stream

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  Speaker 1: Senior business leaders. As I was saying, a feeling more upbeat.
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  Speaker 1: The Herald's latest Mood of the Boardroom survey shows they're
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  Speaker 1: more optimistic than pessimistic about their industries and the local
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  Speaker 1: and global economy. Optimism varies across the different sectors, with
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  Speaker 1: the real estate industry topping the list with an average
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  Speaker 1: score of four point three three out of five, a
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  Speaker 1: substantial jump from last year's two point six out of five.
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  Speaker 1: Barfoot and Thompson Managing Director Peter Thompson joins me, Now,
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  Speaker 1: very good morning to you.
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  Speaker 2: Now, good morning, Cairie.
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  Speaker 1: I was saying, though real estate agents are by nature
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  Speaker 1: a bunch of bouncy tiggers, you are more inclined to
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  Speaker 1: be optimistic. It's just in the nature of the profession,
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  Speaker 1: isn't it.
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  Speaker 2: Without doubt? You know, we always like to think of
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  Speaker 2: the positive, but we're also the most realistic about seeing
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  Speaker 2: going through downturns and how long it takes to sort
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  Speaker 2: of rebound from them. Bookers, as you probably aware, I've
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  Speaker 2: been in the industry forty four years. I think it
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  Speaker 2: is this year. We've been through many cycles and people
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  Speaker 2: say it's never going to rebound, but real estate does rebound.
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  Speaker 2: It's just like a time cycle and we're heading back
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  Speaker 2: to the upper quarter, which is the positive sign.
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  Speaker 1: I spoke to a number of people in real estate
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  Speaker 1: over the last two years who said they just did
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  Speaker 1: not have figures for how bad it became.
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  Speaker 2: Yeah, I would have to agree with that. You know,
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  Speaker 2: through the times that I've been through, this would be
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  Speaker 2: must probably the second, possibly the third toughest period it certainly,
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  Speaker 2: I think a lot of it was through the unknown
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  Speaker 2: of COVID and how that was going to have the
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  Speaker 2: effect on us. And I think we can look back
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  Speaker 2: at that and say, whilst it was a very good
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  Speaker 2: period strade after COVID, that most probably was the point
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  Speaker 2: where we know everything went bad.
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  Speaker 1: What's it done to the industry? Have you seen many
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  Speaker 1: people leave because just had to?
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  Speaker 2: No, I think that's been the incredible part. Well, certainly
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  Speaker 2: within our own company and also knowing the figures nationally,
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  Speaker 2: most people live held on there. You know, some that
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  Speaker 2: may not been earning through the tough times certainly earned
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  Speaker 2: enough to get through them. There's been a few that
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  Speaker 2: are doing part time jobs like Uber driving. It's amazing
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  Speaker 2: how many Uber drivers are red estate agents. But you
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  Speaker 2: know that you know it is unless you make a sale,
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  Speaker 2: you don't get paid, and you've got to be able
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  Speaker 2: to put money on the you know, for the families,
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  Speaker 2: et cetera, and that's why some of them do look
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  Speaker 2: at second jobs.
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  Speaker 1: Summer generally brings an upturn in optimism and confidence and people.
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  Speaker 1: People's homes look better in sunshine than they do in
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  Speaker 1: the rain and the sludge. So are you expecting to
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  Speaker 1: see more people put their properties up for sale or
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  Speaker 1: are they still holding on to thinking they're going to
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  Speaker 1: get those silly numbers that were happening just after COVID.
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  Speaker 2: I think if we just look at the last two months,
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  Speaker 2: we've certainly seen a big uplift in the number of
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  Speaker 2: listings that have been coming on the market, and it's
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  Speaker 2: reflecting in the number of sales. Last month, we sold
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  Speaker 2: nine hundred and ninety eight settled sales in Auckland and
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  Speaker 2: that was the most probably the highest number of sales
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  Speaker 2: we've had other than a March, which is traditionally our
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  Speaker 2: biggest month of the year, but that goes right back
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  Speaker 2: for about the last six or seven years. So we're
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  Speaker 2: certainly starting to see light at the end of the tunnel.
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  Speaker 2: Interest rates are starting to turn down, and I think
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  Speaker 2: before Christmas we'll see hopefully another two cuts in the
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  Speaker 2: OCR rate, which will just ready boost not just real
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  Speaker 2: estate but all business. I think businesses have ready had
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  Speaker 2: it hard and that's what we need is some good news.
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  Speaker 2: And I think that's what that came out of the
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  Speaker 2: meeting today.
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  Speaker 1: Yeah, it is. And confidence begets confidence, doesn't it. When
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  Speaker 1: people feel good, When people feel confident, when people feel
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  Speaker 1: hopeful and positive, they will spend.
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  Speaker 2: Well, that's you know, we're starting to see people come
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  Speaker 2: back to our auction rooms and that that is a
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  Speaker 2: real positive sign and some incredible success stories in the auctions.
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  Speaker 2: But it's just about making sure that the property is
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  Speaker 2: salable and it's listed at the right price. Well, the
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  Speaker 2: vendor's expectation is not thinking, well, I'm going to make
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  Speaker 2: money if I put it on the market. Now, you know,
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  Speaker 2: if you're going to think you're going to make a
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  Speaker 2: real big gain, it possibly is not the time to
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  Speaker 2: put it on. But if you're already wanting to sell
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  Speaker 2: your property, there's a lot of good buyers out there
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  Speaker 2: getting ready to make that offer.
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  Speaker 1: And also if you're looking to go into a smaller
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  Speaker 1: house or downsize or buy a bigger one. You're buying
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  Speaker 1: in the same market, aren't you.
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  Speaker 2: Yeah, that's dead right. And it's amazing how many people
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  Speaker 2: are actually downsizing. And I think some of them are
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  Speaker 2: being hurt with the high interest rates that they got
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  Speaker 2: borrowed and didn't expect to go up to that rate.
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  Speaker 2: I think some of them are now just paying off
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  Speaker 2: some excess mortgage and going down level simultaneously. There's others
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  Speaker 2: that are increasing because they see that the interest rates
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  Speaker 2: are stime to come. So you know, there's a lot
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  Speaker 2: of good buyers out there.
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  Speaker 1: And when do you see good times coming, like really
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  Speaker 1: good times returning?
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  Speaker 2: You know, it's positive signs. We're seeing good stuff happening
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  Speaker 2: out there at the moment. But I still do say
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  Speaker 2: with caution, you know, there's still a lot of people
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  Speaker 2: that are hurting, and I think it's going to be
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  Speaker 2: certainly another six months before a good portion of New
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  Speaker 2: Zealand's going to be able to look forward in a
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  Speaker 2: positive manner. If I was looking at buying, I'd be
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  Speaker 2: looking at buying now. If I was thinking selling, i'd
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  Speaker 2: put it on because no time the right time or not.
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  Speaker 2: If you're looking at buying and selling, you just said
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  Speaker 2: it before. You're buying and selling in the same market,
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  Speaker 2: and it doesn't matter whether it's a good market, low market, whatever,
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  Speaker 2: You're still buying in that same that market. But I
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  Speaker 2: think with the interest rates coming down, just keep flexibility
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  Speaker 2: on how much you're fix and how much you float,
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  Speaker 2: or just review them on a regular basis rather than
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  Speaker 2: a long term basis, because I think we will start
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  Speaker 2: seeing interest rates come down. On the other hand, I say,
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  Speaker 2: with caution, don't let's hope we don't go down much below,
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  Speaker 2: say two or three percent, because we'll just get back
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  Speaker 2: into the situation we were where all of a sudden
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  Speaker 2: we have to go up to unaffordable again.
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  Speaker 1: I know you spent some time overseas. Did you Was
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  Speaker 1: that purely rest and relaxation. Did you have a long,
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  Speaker 1: hard look at what was happening over there?
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  Speaker 2: It was purely relaxation. But whenever I go overseas, I'm
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  Speaker 2: always looking and seeing. But I think more importantly, we're
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  Speaker 2: a member of Leading Real Estate Companies of the World
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  Speaker 2: organization with Bart and Thompson, and we get to hear
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  Speaker 2: what's happening around the world, and I think that the
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  Speaker 2: most important thing I saw was when COVID came all
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  Speaker 2: real estate around the world came back to a flat
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  Speaker 2: bottom period and since then we're starting to see movements
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  Speaker 2: from the US, from China, from the Europe, UK, etc.
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  Speaker 2: And New Zealand's actually, if I could say, almost slightly
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  Speaker 2: six months ahead than many of those other countries. And
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  Speaker 2: I think that just shows where people see New Zealand
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  Speaker 2: real estate as a very good investment. So yeah, I've
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  Speaker 2: got good positive science, but we do have to be
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  Speaker 2: aware of what's happening in the the world at the moment.
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  Speaker 2: Was these walls that are going on, they can have
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  Speaker 2: an impact, especially if they get bigger.
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  Speaker 1: Nice to talk Peter, as always Peter Thompson, Barft and
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  Speaker 1: Thompson Managing Director,