Latest / Best of Business / Ed McKnight: Property investment expert reveals whether or not the housing market is set to take off

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Ed McKnight: Property investment expert reveals whether or not the housing market is set to take off · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk ZEDB. Follow
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  Speaker 2: Property sales are the highest in years, but the number
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  Speaker 2: of unsold houses is also at a record high. Auckland
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  Speaker 2: real Estate company Barfoot and Thompson said March was a
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  Speaker 2: record month for house sales, the most since twenty twenty one.
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  Speaker 2: But while listenings and sales are up, Tony Alexander says,
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  Speaker 2: the price they're selling for hasn't gotten any better. So
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  Speaker 2: where does this leave us. Let's get a picture a
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  Speaker 2: snapshot of the market. Resident economist at Opah's Partners, Ed
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  Speaker 2: McKnight's with me now.
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  Speaker 3: Ed good evening, Great to talk to you, Ryan.
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  Speaker 2: So what's behind, first of all, the behind the rising
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  Speaker 2: number of unsold properties.
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  Speaker 3: Yeah, we're seeing a lot of listings on the market.
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  Speaker 3: Depending on what you look at the in terms of
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  Speaker 3: the data source, somewhere between thirty two thousand up to
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  Speaker 3: forty thousand properties that are currently sitting there on the market.
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  Speaker 3: There's a couple of things happening there. There are actually
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  Speaker 3: more properties that are selling, but we're equally seeing a
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  Speaker 3: lot of supply coming onto the market as well, and
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  Speaker 3: then on top of that, those listings that are coming
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  Speaker 3: to the market are also sitting around for a lot longer.
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  Speaker 3: So we're seeing the days to sell a property. It's
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  Speaker 3: up from about fifty five days, up from fifty one
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  Speaker 3: days last year up to fifty four this year. So
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  Speaker 3: it's not just about more listings, it's also that those
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  Speaker 3: listings are sticking around, and.
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  Speaker 2: Then that what the owner's day. Vendors basically don't want
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  Speaker 2: to drop the price, don't They're not willing to go
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  Speaker 2: below a certain amount, so they're happy to sit there.
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  Speaker 3: It's a bit of a game of who's going to
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  Speaker 3: blink first? Are those sellers going to capitulate to what
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  Speaker 3: the market is actually willing to offer. And it's quite
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  Speaker 3: fascinating because I see this myself with friends who are
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  Speaker 3: selling properties that they're saying, oh, my real estate agencys,
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  Speaker 3: I could flick this property off, but i'd really have
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  Speaker 3: to lower the price. Well, if that's market price, that's
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  Speaker 3: the market price. You either decide to sell it or
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  Speaker 3: you sit there on the markets. Some sellers are saying,
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  Speaker 3: you know what, maybe we'll just sit there on the
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  Speaker 3: market not take that listing off.
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  Speaker 2: Yeah, I've heard a bit of that too. A lot
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  Speaker 2: of talk that maybe where you know, at the bottom
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  Speaker 2: of the curve was starting to come out of it,
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  Speaker 2: and there's there's some lower cost suburbs that are starting
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  Speaker 2: to pick up, you know, two three, four percent in price.
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  Speaker 2: Is that what is that happening or is that defigment
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  Speaker 2: of people's imaginations.
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  Speaker 3: Oh, that is happening. If we look at Inbicagol City,
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  Speaker 3: where we've got some of the cheapest properties in the country.
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  Speaker 3: I mean you can buy two or three houses down
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  Speaker 3: there for the price of a single Auckland property. House
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  Speaker 3: prices and Inbicagol up four percent year. On yes, Southland,
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  Speaker 3: which is you know, just kind of surrounds in Vericagol,
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  Speaker 3: they are up six percent per year, and a lot
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  Speaker 3: of the west coasts of the South Island, where again
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  Speaker 3: we've got properties that you can still buy for three
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  Speaker 3: hundred thousand dollars, are seeing a bit of growth. Of course,
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  Speaker 3: when those properties are a bit cheaper, a four percent
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  Speaker 3: or a three percent might be ten grand worth of growth,
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  Speaker 3: So it's not necessarily massive numbers, but as a percentage're
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  Speaker 3: seeing a bit of an uptick. Wherever house prices are
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  Speaker 3: a little bit more expensive, Like in christ Church, they
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  Speaker 3: are only kind of up one percent year on Auckland's
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  Speaker 3: still losing a little bit of Groundhouse prices there down
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  Speaker 3: two percent year on year, but it's kind of middling growth. Ryan.
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  Speaker 3: You know, there's nothing spectacular happening at the moment, but
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  Speaker 3: it does seem to be a bit of a recovery.
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  Speaker 3: Here's one stat you might like. Over the last six months,
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  Speaker 3: we've seen house prices go up seasonally adjusted house prices
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  Speaker 3: go up five out of those six months. The six
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  Speaker 3: months before that, house prices went down five out of
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  Speaker 3: those six months. So we see what we're seen as
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  Speaker 3: a bit of a tune there. But it's not like
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  Speaker 3: we're going to go through a boom and we're going
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  Speaker 3: to be up another ten percent over the next twelve months.
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  Speaker 2: We're not taking off in rockets quite yet. I do
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  Speaker 2: love a good house stat, Ed, Thank you very much.
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  Speaker 2: Ed McKnight, Resident Economists that Open's partners.
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