Latest / Best of Business / Nick Tuffley: ASB chief economist on the outlook of the latest ASB Housing Confidence survey

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Nick Tuffley: ASB chief economist on the outlook of the latest ASB Housing Confidence survey · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks. It'd be
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• 0:17
  Speaker 1: We were.
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  Speaker 2: Not that.
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  Speaker 3: Hey, do you know what it is? What like seven
• 0:35
  Speaker 3: years since Green felt at Tower? Do you remember when
• 0:38
  Speaker 3: it went up and flames seven years ago? The final
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  Speaker 3: report is going to be published this morning, like as
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  Speaker 3: in this morning UK time, overnight our time. Kevin Grave
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  Speaker 3: will talk us through it in ten minutes time. Now.
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  Speaker 3: I don't want you to always feel miserable about New Zealand,
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  Speaker 3: like we're the only people who can be idiots?
• 0:55
  Speaker 2: Why not?
• 0:56
  Speaker 3: This will make you feel better about us. I'll tell
• 0:59
  Speaker 3: you something for nothing. Do you remember that bike crack
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  Speaker 3: that that Tories mates bought in Wellington that costs about
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  Speaker 3: eighty four thousand dollars on Oriental Parade and it was
• 1:07
  Speaker 3: like stay of the gold plated highly mechanic robot bike rack.
• 1:12
  Speaker 3: It was like, Wow, what an amazing bike rack. Eighty
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  Speaker 3: four k Irish have done one better. These guys have
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  Speaker 3: built a small bike shelter next to the Parliamentary buildings
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  Speaker 3: for six hundred thousand New Zealand dollars. It doesn't even
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  Speaker 3: do what Tories bike rack does. It doesn't even have
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  Speaker 3: like a little like lifting thing that will sort of
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  Speaker 3: hydraulically lift your bikes up and stack them on level
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  Speaker 3: two of the bike rack. Nothing flash like that. It's
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  Speaker 3: literally a canopy. It is a back wall of sort
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  Speaker 3: of like corr It looks like it's just stupid corrugated plastic.
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  Speaker 3: It's probably a bit flash than that, but it's basically
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  Speaker 3: what it looks like. Corrugated plastic backwall, corrugated plastic roof.
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  Speaker 3: That's gonna get moldy in Ireland, isn't it. And then
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  Speaker 3: that's it. And then they've got little eighteen little bike
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  Speaker 3: racks and you can put your bike racks in there
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  Speaker 3: and think about it. If the rain comes even slightly sideways,
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  Speaker 3: six hundrey thousand is going to be no good for anything.
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  Speaker 3: Those bikes are still gonna get wet. So we are
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  Speaker 3: not the only ones with the monopoly on stupid ideas.
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  Speaker 3: How good twenty two away from seven Heller Duper see
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  Speaker 3: Allen Now Kiwis are weirdly not expecting at uptick and
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  Speaker 3: house prices anytime soon. And that's even though the interest
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  Speaker 3: rates are coming down. So ASB has done its latest
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  Speaker 3: housing confidence survey found a net thirteen percent of respondents
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  Speaker 3: reckon house prices will increase, That is down from down
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  Speaker 3: by more than thirty percent compared with the last quarter.
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  Speaker 3: Chief economists at ASB Bank Nick Toughley's with us. Now, hey,
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  Speaker 3: Nicky there, why are they so gloomy?
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  Speaker 2: I think when we're looking at this period over May
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  Speaker 2: June July, there was a noticeable pullback and optimism, shall
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  Speaker 2: we say, over May, and that does coincide with when
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  Speaker 2: the Reserve Bank came out with that sort of very
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  Speaker 2: stern sermon that interest rates are not going to be
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  Speaker 2: coming down anytime soon. So we certainly saw a bit
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  Speaker 2: of deflation and that sort of optimism for house prices
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  Speaker 2: coming through, at least in the first couple of months,
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  Speaker 2: seems to.
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  Speaker 3: Have landed slightly differently compared, you know, depending on where
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  Speaker 3: you are in the country. Why has it being felt
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  Speaker 3: so pessimistically in Auckland.
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  Speaker 2: I think in Auckland people is a living and dying
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  Speaker 2: by that mortgage rate, just given the size of mortgages.
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  Speaker 2: So we did see from the previous quarter where Auckland
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  Speaker 2: was relatively optimistic, finished the quarter quite optimistic, and it
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  Speaker 2: saw its expectations around house prices fall back quite a lot.
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  Speaker 2: You could also see in the interest rate expectations that
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  Speaker 2: there was quite a lot of oscillating around. People certainly
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  Speaker 2: got a bit darker in the mood over the prospects
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  Speaker 2: of interest rate decreases over June or there's signs of
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  Speaker 2: that started to change a lot right across the board
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  Speaker 2: in the country when we started to roll into July
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  Speaker 2: and started speculating about the interest rate declines that we
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  Speaker 2: started to see.
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  Speaker 3: Is it possible that people have started to realize that
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  Speaker 3: house prices will probably never go up at the rate
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  Speaker 3: that they did during COVID. Are people starting to get
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  Speaker 3: realistic about what comes next?
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  Speaker 2: We've had a degree of that. We did see quite
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  Speaker 2: a lot of euphoria late last year when the housing
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  Speaker 2: market did start to pick up about the extent to
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  Speaker 2: which house prices would go up, so very very strong
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  Speaker 2: results historically coming through at that point, I think people
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  Speaker 2: just need to bear in minds, Yes, interest rates are
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  Speaker 2: going down, We're not going back to a two percent
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  Speaker 2: mortgage of any time soon, and the economy is in
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  Speaker 2: a slower state. Unemployment is more challenging than what it
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  Speaker 2: was a few years ago as well.
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  Speaker 3: I found it fascinating that only a net eight percent
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  Speaker 3: think now is a good time to buy. Now what's
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  Speaker 3: going on here, Nick, because now is the perfect time
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  Speaker 3: to buy.
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  Speaker 2: If I think we'll see this ambivalence change a little bit.
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  Speaker 2: It is quite a funny one. We tend to find
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  Speaker 2: that people think it's a terrible time to buy in
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  Speaker 2: the midst of a housing boom, when everybody is nonetheless
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  Speaker 2: noneth less buying is the peculiar behavior that we see there.
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  Speaker 2: So look, you are right when you look at affordability,
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  Speaker 2: interest rates, falling, house prices have not exactly going up
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  Speaker 2: at the moment. It is certainly a buyer's market out there,
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  Speaker 2: and particularly when you look at how much stock there
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  Speaker 2: is on the market. Portability is good. It is going
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  Speaker 2: to get better. But the problem is is that we'll
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  Speaker 2: see that come up a bit more competition as well
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  Speaker 2: as we head over twenty twenty five.
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  Speaker 3: Good stuff, Lock, It's good to talk to you, mate,
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  Speaker 3: Look after yourself. That's Nick Toughly, chief economist at ASB Bank.
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