Latest / Best of Business / Jenee Tibshraeny: NZ Herald Wellington business editor on the mood among mortgage holders following the OCR update

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Jenee Tibshraeny: NZ Herald Wellington business editor on the mood among mortgage holders following the OCR update · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks B follow
• 0:12
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• 0:16
  Speaker 2: As we've discussed, the Reserve Bank isn't saying very much
• 0:19
  Speaker 2: and when we're finally going to see the interest rates fall,
• 0:21
  Speaker 2: but mortgage holders are betting they're going to fall this year.
• 0:23
  Speaker 2: Janetibshradi is The Herald's Wellington Business editor and with us
• 0:26
  Speaker 2: agana Hey Heather, So what are you seeing that indicates
• 0:29
  Speaker 2: their betting on this year?
• 0:31
  Speaker 3: So the Reserve Bank releases quite a bit of interesting data.
• 0:35
  Speaker 3: One of the data sets that released recently shows that
• 0:40
  Speaker 3: about seventeen percent of the new mortgages that banks wrote
• 0:45
  Speaker 3: in May went to people who fixed for six months.
• 0:50
  Speaker 3: So that was quite an increase from what we've seen previously.
• 0:53
  Speaker 3: So basically, proportionately, proportionately, a lot more of the new
• 0:58
  Speaker 3: mortgage lending was going to people fixing for relatively short periods.
• 1:03
  Speaker 3: So that's seventeen percent for owner occupiers. For investors that
• 1:06
  Speaker 3: was even higher at twenty quite a big jump from
• 1:12
  Speaker 3: where it had been. Now, I should say that fixing
• 1:14
  Speaker 3: for a year is still by far the most popular option,
• 1:18
  Speaker 3: and it has been for some time. But I think
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  Speaker 3: it is interesting that in May, you know, fairly significant
• 1:25
  Speaker 3: number of people thought to fix for six months, and
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  Speaker 3: that was despite the Reserve Bank at that time suggesting
• 1:31
  Speaker 3: that it would only cut the OCR in around August
• 1:35
  Speaker 3: next year.
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  Speaker 2: Now, Jenay, I probably have not actually underscored this enough
• 1:39
  Speaker 2: on the show this evening, but what has just happened
• 1:42
  Speaker 2: from the Reserve Bank is a massive change in tone.
• 1:44
  Speaker 3: Right.
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  Speaker 2: They have gone from being like really hawkish to really
• 1:48
  Speaker 2: dubvish in the space of two announcements, haven't they.
• 1:52
  Speaker 1: Yeah.
• 1:52
  Speaker 3: Look, I thought it was a significant pivot from as
• 1:55
  Speaker 3: you say, surprisingly hawkish to surprisingly dubvish in quite a
• 1:59
  Speaker 3: short space of time. Interestingly, without any new inflation figures
• 2:05
  Speaker 3: in that period that the Reserve Bank has changed its view.
• 2:08
  Speaker 3: So the Reserve Bank currently only has inflation figures for
• 2:11
  Speaker 3: the March quarter as it did back in May. I
• 2:14
  Speaker 3: thought that the change was notable. It was a pivot.
• 2:19
  Speaker 3: Sharon Zohlna from A and Z, who I talked to previously, thought, yeah,
• 2:22
  Speaker 3: it's a change of tone, but it's not too drastic. Look,
• 2:27
  Speaker 3: I think the new inflation figures for this June quarter,
• 2:32
  Speaker 3: which are out next week, will be the ones to watch. Yeah, right,
• 2:35
  Speaker 3: like if that, if they if they come in showing
• 2:38
  Speaker 3: that inflation is actually falling quite a bit, you know,
• 2:41
  Speaker 3: I think we could see see rate cuts soon. I
• 2:44
  Speaker 3: think the Reserve Bank previously suggesting that the first cut
• 2:47
  Speaker 3: would be in August next year is now, you know,
• 2:51
  Speaker 3: totally an outdated view.
• 2:53
  Speaker 2: Is it possible that somebody like Sharon Zolner says it's
• 2:56
  Speaker 2: not a massive pivot because nobody believed them when they
• 2:59
  Speaker 2: were being that hawkish anyway.
• 3:01
  Speaker 3: Yeah, look that is interesting. Markets in particular, it didn't
• 3:05
  Speaker 3: believe the Reserve Bank at all. Economists were little bit
• 3:08
  Speaker 3: more balanced, and you know, now today's statement really has
• 3:13
  Speaker 3: given markets the evidence they were looking for to price
• 3:18
  Speaker 3: in rate cuts soon. My understanding is that that the
• 3:21
  Speaker 3: pricing is such that markets, you know, there is a
• 3:25
  Speaker 3: chance that you know, some people think there's a chance
• 3:28
  Speaker 3: that the first cut could even come in August, but
• 3:31
  Speaker 3: most economists are now still picking November. I think if
• 3:35
  Speaker 3: you take a step back, this is all pretty confusing
• 3:38
  Speaker 3: for your average person trying to figure out how to
• 3:40
  Speaker 3: fix their mortgage or what to do with their term deposits.
• 3:43
  Speaker 3: Because we've had, you know, quite a few different views
• 3:46
  Speaker 3: come out within the past few weeks. But what I
• 3:49
  Speaker 3: would say is interest rate cuts now seem like they
• 3:53
  Speaker 3: could happen sooner than we thought two months ago, and
• 3:57
  Speaker 3: the chance of a hike is probably now no longer there.
• 4:01
  Speaker 2: Yeah, hey, Jena, thank you very much. Really appreciate you
• 4:03
  Speaker 2: talking us through that genetive training. Harold's Wellington Business Editor.
• 4:07
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