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Kelly Eckhold: Westpac Chief Economist on lending rates increasing 20% year-on-year · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: All right, finally some good economic news and more people
• 0:02
  Speaker 1: are getting mortgages. Centric data out today shows new residential
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  Speaker 1: mortgage lending is up over twenty percent year on year
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  Speaker 1: for the second month in a row. So to discuss this,
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  Speaker 1: I'm joined by Westpac's chief economists Kelly Echold. So Hello, Kelly,
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  Speaker 1: good morning. Does this mean the economy is back on
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  Speaker 1: track or what?
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  Speaker 2: Well? I think it's sitting in the right direction. It's
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  Speaker 2: still pretty early days yet, and many of the indicators
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  Speaker 2: for growth for where we are now are still a
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  Speaker 2: bit subpar, but certainly those lower interest rates are starting
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  Speaker 2: to flow through.
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  Speaker 1: How much of us new lending is from first home buyers.
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  Speaker 2: There is some of it, although I would have to
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  Speaker 2: say that when we look at the credit statistics, we
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  Speaker 2: actually see the investors are the strongest part of the
• 0:49
  Speaker 2: market so far, but some of the early indications we've
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  Speaker 2: seen in the last few months suggest that the more
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  Speaker 2: kind of like low income marginal buyer is more important.
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  Speaker 2: So that's the first time buyers there.
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  Speaker 1: So the investors are that because the tax thing that
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  Speaker 1: happened after the last election, and finding the interest rates
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  Speaker 1: have fallen.
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  Speaker 2: Yeah, Well, I think particularly it's the lower interest rates
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  Speaker 2: that are important for the investors. It just means that
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  Speaker 2: that hurd or rate of return you need to beat
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  Speaker 2: is a bit lower. And obviously the tax changes that
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  Speaker 2: were brought in by this government as well are obviously helpful.
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  Speaker 1: So of course we all look to the RBNZ and
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  Speaker 1: the Reserve Bank and try to figure out what they're
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  Speaker 1: going to do next. Will they be hearing you today
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  Speaker 1: looking at these numbers and thinking they've done enough or
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  Speaker 1: do you think we're still on track for another cut
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  Speaker 1: this month?
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  Speaker 2: Well? I think we're still on track for another cut
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  Speaker 2: this month. I mean, most of the data, as I've said,
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  Speaker 2: has been a little bit subpar. Actually, I think they
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  Speaker 2: might have been a little bit worried about that. But yesterday,
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  Speaker 2: for example, we did get a really good month of
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  Speaker 2: building consens number and it sort of went up to
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  Speaker 2: seven point two percent for the month. That was the
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  Speaker 2: first the third big month in a row, so that
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  Speaker 2: will be relieving them. I think that the things are
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  Speaker 2: starting to pen out is expected. The interest rates have
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  Speaker 2: gone down a long way and that's the leading edge
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  Speaker 2: of the recovery, but there's still quite a long way
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  Speaker 2: to go here, and it is just one set of
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  Speaker 2: indicators as well.
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  Speaker 1: So you had a good profit yesterday, up sixteen percent.
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  Speaker 1: A net profit of one hundred and ninety seven million
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  Speaker 1: dollars actually is up thirteen percent. So how much can
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  Speaker 1: we thank this increase in lending for your success over
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  Speaker 1: the course of this year.
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  Speaker 2: Well, I mean the lending growth has actually still been
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  Speaker 2: a bit subpar. I mean that it is actually starting
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  Speaker 2: to improve. So I mean, if we look at business lending,
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  Speaker 2: for example, it's finally poked up to around looking at
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  Speaker 2: my number here, three point seven percent, So that's sort
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  Speaker 2: of the highest level since about twenty twenty three. I mean,
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  Speaker 2: I think we're looking forward to a better operating environment
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  Speaker 2: for the whole economy in the next year.
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  Speaker 1: All right, So are we beyond green shoots? And do
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  Speaker 1: we Are we actually starting to poke out of the ground.
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  Speaker 1: I'm just saying for a metaphor or an allegory that
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  Speaker 1: you know that she fits us.
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  Speaker 2: No, I think we're actually just seeing the odd green
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  Speaker 2: shoot poking out at the moment. We need a bit
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  Speaker 2: of water on it, basically in a bit of time,
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  Speaker 2: so that you can actually see something a bit more
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  Speaker 2: than that.
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  Speaker 1: Well, Kelly Echold, I thank you so much for your
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  Speaker 1: Time Today. Kelly Echold is the senior economist from Chief
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  Speaker 1: Economists from Westpac. For more from Early Edition with Ryan Bridge,
• 3:27
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• 3:29
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• 3:32
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