Latest / Early Edition with Ryan Bridge / Kelvin Davidson: Cotality Chief Property Economist on first home buyers making up 30% of purchases in the third quarter

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Kelvin Davidson: Cotality Chief Property Economist on first home buyers making up 30% of purchases in the third quarter · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: Right, let's go to New Zealand property. According to data
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  Speaker 1: out this morning from Cotality and Westpac, first home buyers
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  Speaker 1: had a record 29.5% share of property purchases. This is
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  Speaker 1: for Q3 this year. 76% of them, the vast majority,
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  Speaker 1: are buying standalone houses. Kelvin Davidson, Cotality New Zealand Chief
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  Speaker 1: Economist with us this morning. Kelvin, good morning.
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  Speaker 2: Good morning.
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  Speaker 1: Now it's time to buy. This is a continuation of
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  Speaker 1: a trend now, isn't it?
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  Speaker 2: Oh, absolutely, yeah. We've seen this trend in place, if
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  Speaker 2: you want to look really long-term, for about 10 years,
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  Speaker 2: but the big step up has come in perhaps the
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  Speaker 2: last two to three years. Obviously, with house prices lower,
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  Speaker 2: that's really helped. Mortgage rates have snuck up a little
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  Speaker 2: bit lately, but of course they're lower than they were
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  Speaker 2: two or three years ago, as well as access to KiwiSaver,
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  Speaker 2: and also plenty of low deposit money available at the bank.
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  Speaker 2: So it's clearly a good time to be a first-time buyer.
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  Speaker 1: How much less am I paying if I'm a first-time
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  Speaker 1: buyer in terms of than during the peak?
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  Speaker 2: Well, I mean, obviously it depends where you are in
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  Speaker 2: the country and all sorts of different things, but you're
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  Speaker 2: looking at hundreds of dollars. I mean, on average, it
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  Speaker 2: could be sort of $ 400 or $ 500 a month less
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  Speaker 2: than what people were paying back to us sort of
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  Speaker 2: two or three years ago. So huge savings, and that reflects,
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  Speaker 2: I mean, obviously mortgage rates are down a bit, but
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  Speaker 2: the big thing is really lower house prices. Our index
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  Speaker 2: is still down 18% from the peak, so that's a
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  Speaker 2: big plus for first-time buyers, of course.
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  Speaker 1: What about the median price, $ 715, 000? That is actually up
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  Speaker 1: on last year, isn't it?
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  Speaker 2: Yeah, it is. Well, last year, first-time buyers paid a
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  Speaker 2: median of about $ 700, 000. So far this year, they've paid $ 715, 000.
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  Speaker 2: So not a huge increase, but it's significant for those people.
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  Speaker 2: But I think the really big thing is that they're
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  Speaker 2: getting a lot more house for their money, as you referenced.
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  Speaker 2: Standalone homes are a big proportion of what first-time buyers
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  Speaker 2: are getting. So I'd still call it bank of art,
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  Speaker 2: deli for money, whatever sort of thing. A bit more money,
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  Speaker 2: but a lot more house.
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  Speaker 1: Does your location depend on whether you're buying standalone or
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  Speaker 1: buying apartment?
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  Speaker 2: Yeah, it does. I mean, obviously, the makeup of the
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  Speaker 2: housing stock will determine that. If you see markets, like
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  Speaker 2: if you're buying in central Auckland, well, hard to get
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  Speaker 2: a house because there's a lot of apartments. So, you know,
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  Speaker 2: it does depend on the market you're in. But generally,
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  Speaker 2: there's enough houses going around for people, a lot of
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  Speaker 2: listings at the moment, so... Whether you're keen to buy
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  Speaker 2: a townhouse, whether you're keen to buy a house, there's
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  Speaker 2: plenty of stock out there. So buying, I'm not saying
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  Speaker 2: buying is easy, of course, it never is, but it's
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  Speaker 2: a lot easier than it used to be and we're
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  Speaker 2: seeing the figures that people are being successful in. It
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  Speaker 2: just reflects plenty of choice.
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  Speaker 1: Kelvin Davidson, Cotality New Zealand Chief Property Economist. Good to
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  Speaker 1: have you on the show as always. For more from
• 2:40
  Speaker 1: Early Edition with Ryan Bridge, listen live to Newstalk ZB
• 2:44
  Speaker 1: from 5am weekdays or follow the podcast on iHeartRadio.