Mixed response to inflation data

Number one on the running order this week is the recently released 6% annual inflation rate. Engage with us as we dissect this figure, the important non-tradable inflation rate and its implications on the official cash rate.

Intrigued by the official cash rate and how it impacts your spending habits? Then this podcast is a must-listen. Brace yourself as we delve into a possible economic scenario where inflation remains high, pushing us towards a new recession. We'll be discussing the various factors that could influence this economic trajectory, such as the lagged effects of the current monetary policy and the number of folks who are yet to reprice their mortgages. 

Our podcast episode doesn't stop at just inflation and cash rates. We transport you to the heart of the real estate market, analyzing current trends and highlighting the potential challenges and opportunities. We'll put under the microscope the low listing volumes, the increasing evidence of floor prices, and the rising investor selling in Australia. Come aboard as we discuss the current listings running at multi-year lows, the annual increase in sales, and what the future looks like for the New Zealand property market. All these and more, as we explore the intricate world of economics and real estate.

Free download of the latest CoreLogic monthly chart pack

Sign up for news and insights or contact on LinkedIn, Twitter @NickGoodall_CL or @KDavidson_CL and email nick.goodall@cotality.co.nz or kelvin.davidson@cotality.co.nz

Chapters

• 0:17 New Zealand Property Market Analysis
• 6:56 Debate on OCR and Inflation Peaking
• 15:44 Recent Spending and Consumer Trends Insights
• 18:46 Real Estate Market Trends and Analysis

Transcript

Nick Goodall: 0:17

Welcome to the New Zealand Property Market Podcast brought to you by CoreLogic, produced by Agents TV on the 24th July 2023. I'm Head of Research Nick Goodall and I'm joined by our Chief Economist, Kelvin Davidson. Kelvin, how are you, mate? How's your weekend?

Kelvin Davidson: 0:31

Pretty wet. It's been really wet around Canterbury. Here we've had a few bit of rain, so not too much to report really. We just stayed inside, watched a bit of TV, played a few games. Yeah, what are you going to do when it's so wet outside? It doesn't look like it's been as bad as other flooding events We've had in previous years, with, obviously, the issues that came with those a couple of years ago, but yeah pretty wet.

Kelvin Davidson: 0:53

The garden's looking a bit lake like. So yeah, but we might have escaped relatively easily compared to those previous events. So no complaints. But it did mean a quiet weekend inside, which isn't the worst thing, but yeah there's a little bit of cabin fever going on towards the end of it. I'd say so good to be into the Monday routine now, so going all right.

Nick Goodall: 1:15

Yeah, and certainly you know, go away a bit with the event, not just compared to previous events, but also compared to other parts of the Canterbury region, which it sounds like has been pretty bad. And it did make you and I just quickly check the CoreLogic Ambiental flood map right at us and go what does your property, where does it sit in those flood plains? So thankful to us to find out that it has a green score and looks pretty, pretty good. So, yeah, nice to have the access to some of those tools sometimes as well, just to see where we sit when these events happen In terms of us yeah, pretty much similar, really pretty quiet because it was, you know, pretty crappy weather.

Nick Goodall: 1:48

I did manage to get to the football on Friday, which was really good fun. Obviously, the Wellington game here was which is completely gone for my mind, I don't know watch Spain play Costa Rica and Spain were pretty dominant in that but, you know, certainly felt like the vibe of the tournament kicked up, obviously after the football ferns got that massive surprise win on Thursday night, which was amazing to watch. So yeah, all about the FIFA World Cup. Really watched a couple of games on TV over the weekend too and yeah, otherwise it was just. You know, my game was on but in a mud, solid pitch in Kelvin managed to get the win there, but yeah, it's not as fun charging around the mud and the cleanup that comes with it. But yeah, only a few more weeks to go in my season, so yeah, that's sort of rounding out as well.

Nick Goodall: 2:30

But some otherwise made pretty quiet and just other prep for the builders and things in our house too. Really we had the builders turning up to painters and paint stripping our hallway this morning. So yeah, they're sort of moving further into the house. So we're getting squeezed a little bit more and had to do a bit of prep of clearing the area for that.

Kelvin Davidson: 2:47

So yeah, a little bit of this a little bit of that.

Nick Goodall: 2:49

It's generally good, watched a couple of movies, and now the thing I have to do is get a dig in, because the Warriors, of course, beat your beloved Raiders over the weekend too. So another one for the boys over your team, unfortunately, who seemed to just have a thing for you guys.

Kelvin Davidson: 3:03

Yeah, they have had lately, but you know we're still still still sort of top four or five and the Warriors are my second team. So you know it was. It was that hedge thing of someone you know, someone I support was going to win either way. So I look at it positively like that. Still still on the road as to when eventually, it's a long time, long time since they have the whole tournament, but I don't know, maybe this year we'll see.

Nick Goodall: 3:24

The Warriors have never done it. So yeah, I'd happily see one of those too.

Nick Goodall: 3:27

That's fair enough All right, mate, let's get into it Few releases to cover last week, but then a busy week of data releases coming up this week. Last week, of course, the big news was the CPI inflation data which came out midweek, bang on 6% annual inflation for the end of last quarter, broadly as expected. But of course there was that little data beneath the headline. The non-tradable or domestic inflation doesn't remain a little bit more sticky and that meant that some of the coverage probably wasn't quite as optimistic as it could have been, given that headline release. Don't take us through any details of that and probably most importantly, your expectations about what it could mean for the official cash rate mate.

Kelvin Davidson: 4:09

Yeah, so 6% headline inflation, down from the peak of 7.3, going back a few quarters. So yeah, it's going the right direction and certainly was in line with most expectations, whether it was the Reserve Bank or the Bank Economists. There was a range 5.8 through to 6.1, 6.2. So I spot the difference and it was back on at 6% and very much in line with what people were anticipating, so that was kind of a good news. In fact, the average inflation petrol prices down was a big contributor to the continued slowdown inflation. But, like you say, non-tradable or basically domestic things that you can't trade across borders haircuts, for example, as the classic example that gets used. That non-tradable component, or your domestic activities, was still a bit higher and things like rent were still contributing to the slightly elevated inflation rate and so it was building food.

Nick Goodall: 5:04

So on that. So domestic inflation essentially, is most important for the Reserve Bank because that's where they expect the official cash rate to have most impact. Does that feel like tradeable or international inflation? We can't necessarily control, because the price is set overseas Domestic. The OCR should have the greatest influence on that. Is that the reason that we're focusing on that?

Kelvin Davidson: 5:25

Yeah, pretty much. And if you think about the rhetoric over I don't know, a year ago, six to nine months ago, there was sort of a sense that the Reserve Bank was doing what they're doing, but some parts they couldn't control. They couldn't do much about petrol prices. So, and like you say, because that's a tradeable thing that happens overseas. So there was probably this phrase we look through that influence because we can't do much about it.

Kelvin Davidson: 5:50

We just have to focus on what we can control and that's domestic inflation. So, yeah, absolutely. The problem now is that it's that tradeable component that's actually helping to bring inflation down, and the bit that the Reserve Bank can sort of try and control is the bit that's holding inflation up, which is that non-tradable stuff. So rent was a part of that. House building costs are slowing down. We saw that in the court Elwin-McCator as well, and this is the Statich New Zealand measure. It's the latest one, but still pretty high and then food costs as well were an upwards contributor. So yeah, you've still got some things slowing. You've still got some pressure on other components, especially those non-tradable. So yeah, like you say, probably the commentary wasn't as reassuring as it could have been. There's still that issue of the non-tradable inflation staying higher than thought and really, let's face it, overall 6% inflation rate, yes, we kind of relieved that it's come down, but man, it's still pretty bad. The target is 1% to 3%, so there's still some work to be done.

Kelvin Davidson: 6:56

The split view is really on. I guess what this means for the OCR. There is a camp that some of the bank economists are saying yeah, we think it's definitely peaked and it might not come down necessarily anytime soon, but the next move in the OCR will we down at some stage. There are others though that are saying, well, inflation could linger a bit here and the next move in the OCR could be up and coming towards the end of this year, perhaps November. So I suppose there are split views now. I guess you kind of anticipate that at a broad peak Some people think there might be one to go, some people think the next move's down. So no guarantees either way. Certainly reason to be pleased that the CPI rate is coming down, but that's still going to be acknowledged that it's high. So my own view I kind of think the OCR probably has peaked. It looks to me like inflation will be continuing to trend downwards. It'll take a while to get back to that target range, but it is trending down.

Kelvin Davidson: 7:54

I think probably the OCR has peaked, and a lot of that has to do with those lag defects of what's already been done. And let's face it, there's been a big monetary policy tightening. Probably the real effects haven't fully flowed through yet, especially with people repricing the mortgages from those lower rates onto higher fixed rates. That hasn't fully played out yet. So that's going to have an impact on people spending decisions. That's yet to fully come through, so I think that'll still weigh on the economy a bit. And yes, maybe we've pulled out of that initial recession, but people now are suggesting there could be another one to come. So I think in that environment it just feels like things are slowing, inflation's slowing, the economy's slowing.

Kelvin Davidson: 8:31

So the need for another official cash rate increase I'm just not sure. Is there think still right to conclude that the mortgage rates are still right, to think the mortgage rates are probably more or less at their peak, but also that inflation is still way above target? It's going to be a farewell till it gets back to target. So probably, even if the official cash rate stopped increasing, it's not suddenly going to decrease. So therefore mortgage rates are probably higher for longer as well. So that's where I sit on all of that. It's good that inflation is coming down, but we still have a problem. So I don't think we should necessarily think mortgage rates will be falling significantly anytime soon either. So hopefully that's covered it all off. There were those. All that's in my mind.

Nick Goodall: 9:15

I think so, and the reason I think it's really interesting and it's something we actually talked about last year was that at some stage in the future the Reserve Bank might have a really tough position where they know the inflation is too high but we might well be in recession. The economy is struggling and of course, we know that if the economy is struggling and they want to boost activity, they can reduce the official cash rate to do so, and so now it's kind of and it's the follow-on from a conversation last week where I was saying about how I found a bit more pessimistic about how this is going to play out for the rest of the year my consideration for, like I said, all those people that are still to reprice. We might be through the largest proportion, but there's still a significant number to come, and some of those that have already adjusted up might be able to slow down their spending for a little bit, but at some stage they might have had enough of that and then look to change their situation. So it's just really seems to be depending on people's view of the economy, and the question is going to be if inflation remains high, say, later in the year, and we go into this double dip recession, which might be deeper or longer than others expect. What does the Reserve Bank do there? Where do they prioritize? Do they say, look, we actually are worried about the economy and maybe we're starting to see increased job losses because businesses are not getting the same revenues that they're having the cut costs and that includes jobs eventually, maybe? Or do they say inflation is still too high and we can. Our economy, our employment, is robust enough to handle a prolonged recession, so we're going to continue to prioritize getting inflation down.

Nick Goodall: 10:48

Now, I don't know if that situation is going to play out, but that's the one that's intriguing for me. If they get to a point later this year and we do go into another recession and it's deeper or worse, while inflation stays high, they simply the OCR can't help both of those things. They have to pick one, and that's going to be an interesting time. And I think that's where the differing opinions come from those that think the economy will remain robust, jobs are held and so inflation can be the priority. So you have to lift the OCR to find that All those that say, man, the economy's got so much worse to come, and if that plays out, then I need to drop the OCR, to slip spending, to get us out of that.

Nick Goodall: 11:23

And that, to me, is the big question, or the big debate, and it depends where you sit with that and how much weight you might put in one set of data or the other, or how your service is playing out, and that can depend on where you sit and the conversations you have with the certain people. Yes, most people have got through, fine, but a lot haven't. And how are they going to play out? And we can look through that. So some of our data as well. We start to see a lift in listings, for example, people who can't afford to keep their property. We start to see a rare lift for mortgages.

Nick Goodall: 11:57

So I think those are the things and why we're watching those things so closely, because it's going to have such a bearing on what happens with our economy, what happens with inflation, what happens with mortgages, what happens with listings all those things and why it's such an intriguing time right now, Because we essentially have never been through a time like this, where we've manufactured a recession but inflation still isn't coming down at the rate or as much as we want, of course, or we just need more time to see the true effects of it. So yeah intriguing either way, and that, to me, is where the debate stems from.

Kelvin Davidson: 12:31

Yeah, it's really a good point. And also there's a bit of a difference from the norm here, which is normally, you know, you'd think normally if you have a recession you do have inflation coming down. And I suppose my thinking is that that's part of that old sort of spew I just had earlier is that you know the economy is showing signs of slowing, so you think in that environment that well, it's almost inevitable that inflation will slow. So that sort of commondrum where the economy is weak but inflation is still high, you know, might not happen. Just because of that, you naturally think your recession will drag inflation down Ordinarily.

Kelvin Davidson: 13:06

The difference here is that this whole job full recession and the fact that people are still in work and we haven't really seen that the labour market changed really too much yet and I suppose that's the sort of conundrum is that people still have jobs. You know, some of those effects that might have come through on previous recessions aren't there. Normally you associate a recession with job losses and that flows through to reduce spending and that sort of helps to also bring inflation down. But that sort of labour market link isn't there for the moment because people are still in work and so that's keeping a degree of sort of resilience there. People are still able to spend, yep, they're diverting more towards the mortgage and all that sort of stuff, but at least they've still got an income. And so it's sort of putting in floor on the things, I guess, and perhaps keeping inflation a bit higher than what it otherwise would be. And maybe firms are still just a little bit confident to push up prices because they know that people are in work and there's this wage price spiral thing going on as well, wages going up.

Kelvin Davidson: 14:03

So yeah, there's differences from past recessions that probably are many inflations that are staying a bit higher than otherwise would have done. So I suppose that's the little the piece of the puzzle. That might be a bit different, but yeah, it's still on the cards. We could still get to that point where inflation looks weak, or I mean the economy looks weak and inflation is still an issue and the reserve bank has a problem, I guess one they're underlying that with the weak economy itself does bring down inflation. So we don't get to that point. But that's going to be the logic for some of those big economists out there who are still predicting another official cash rate increases that inflation just is more stubborn than it's been historically. So yeah, different views coming through, but we'll see soon enough.

Nick Goodall: 14:48

And I think you could probably add one more thing to that, and that is the amount of monetary policy loosening or the amount of money that flowed through the economy during the pandemic, of course, to save our economy when we didn't know what the hell we're going to go through in the pandemic. That adds to people's savings as well, and people must be resorting to using that savings, but it's not going to last forever. So it's a game. How much of a false protection is that, providing that will come away in the future and then they will actually fully reduce their spending, the economy, and we see an impact from that too. So there are a lot of those unique circumstances which have come about since the pandemic which mean that this is a very unique situation, and that's why it's why you are getting different opinions either way.

Nick Goodall: 15:29

So it's an intriguing one, and that's why I said we're watching some of these other things, trying to get as much of an early view as to what might be going on or could be happening behind the scenes that might lead to change in the future. So, yeah, certainly ones will keep very close eye on.

Nick Goodall: 15:44

The other one it could be kind of length of this was that I saw ANZ actually released. You know there's a inaugural merchant card spending chart pack which give them the largest bank, so they have a lot of spending. Go through their book Just looking at what's happening from a spending perspective across the country and you know, certainly there's a few key insights from that one. Did you take much from that that might give us an insight to what's happened with people spending recently? And then, of course, once that you know, once we get that through an official data, you know, for the actual GDP measure or the NZAC, which I know we get the June later this week, any sort of key insights from that chart pack that the NZ released that we can use is to get insights towards what's going to happen in the future.

Kelvin Davidson: 16:25

Yeah, this, I mean it's. You know any data is good and so we're getting more insights and stuff. And I mean the ANZ. They put the sort of expected caveats at the front. But you know this is a rather be short time series, it's all you know. They're getting started but it takes time to build out that time series and the figures they're using are in dollar terms of nominal.

Kelvin Davidson: 16:45

You know, ideally, you adjust for inflation to look at the sort of volume of spending so. So that's from a analytical point of view that makes it sort of less useful than it will be in time when they can inflation adjust. So there's a few caveats with it. But yeah, I mean it sort of showed spending still still holding up. Tourism they definitely highlighted all the things to do with tourism are definitely still holding up, you know hospitality and all of that, the inflows of people. So that's still a bit of a bright spot. But other parts of the kind of spending economy are just sort of leading a little bit and especially things to do with the housing market. Spending on the furniture and sort of other big household items Is down a little bit. So yeah, I suppose on the whole I mean thinking, just thinking through an hour in my mind, all the charts I quickly scrolled through I think it mixed years. You know some things were up, tourism related things are up, other things down like, say, housing related items.

Kelvin Davidson: 17:41

So I suppose from there it's yeah, keep an eye on it. I don't think it's it's. It certainly doesn't suggest, you know, disaster for consumer spending. People are still out there. You know it's been in the cash, but there's anyone to watch each month for now. You know things are ticking over.

Nick Goodall: 17:58

Okay, yeah, that's good and always good place. I see any new data source out there that might provide us a faster read on what's going on. That's what's been our. Our frustration, right, is that the official data lag so much. So the fact that they can do that pretty quickly Gives us a good read on what's going on, so we'll add that to a list of things to track. In terms of chart pack, we had our own chart pack out last week, course covering We've pretty much every measure of the market out there.

Nick Goodall: 18:24

You once again wrote this and led the coverage in the media. That's available online as well for anyone to download, so I'll leave a link there if you do want that detail. A little bit of commentary included. As per usual, this is going to focus on sales volume, particularly the fact that we've seen two months of increase year on year, but also, I thought, a good time to just a look back at what's happening with the listing, from the listings perspective too.

Kelvin Davidson: 18:46

So do I just take us through how the chart pack release.

Nick Goodall: 18:49

We maybe focus on those couple of things particularly around your read on when listings are at and the impacts they're having on the market now and likely the habits we move through the seasons.

Kelvin Davidson: 18:59

Yeah, yeah, so probably the message from the chart pack was pretty similar to last month actually that definitely picking up on the increase of sales volumes. So the increase annually in May was was 8% from the year earlier. The June figure, the latest number we kind of highlighted the latest chart pack was up 17%. So so yeah, we've seen two months of increase in a row, but both chart packs on the list of that did increase in sales.

Kelvin Davidson: 19:23

You know, with with listing still low. Those sales with new listing still low, those sales are starting to eat into the stock on the market, just seeing things tighten up a little bit, at least by a choice, and you know what's not necessarily clear yet, but just that that evidence is slowly building for For prices having reached the floor as well. So it's kind of that mechanical process your sales go up, stock titans a bit competitive pressures and urgent and expect to see that in prices.

Kelvin Davidson: 19:50

So that was kind of the headline commentary that was. That was where you know, my sort of little media spell went as well, my sort of two or three key points by classification, still showing reasonably similar trends.

Kelvin Davidson: 20:01

First on by a strong Moggish investors kind of not gone from my completely, but certainly finding purchasing a bit tougher than it has been in the past. So a lot of those things were pretty similar. I mean listings themselves. The new flows per week in the past kind of four or five weeks are running at multi year lows. If you sum them up over that Now, take out the effect of one tick, as we're looking year on year here or at the same period at the same part of the year going back, so you can get rid of the one to affect there, the total over the past four or five weeks is the lowest it's been since 2018. So, you know, still not much in the way of new listings coming to market, even adjusting for the fact that it's one tick. So it's still quite Of course, with sales activity picking up, that starts to eat into that choice on market and total stock goes down and so buyers face a bit more competition for those, those properties that are out there.

Kelvin Davidson: 20:57

In terms of numbers, that new listings flow now depends here to find normal. That's that's up the grabs. But you know you look at new listings flows that are pretty much 25% below where they would normally be, so pretty quiet in terms of people coming to market, people are just sitting back and you know what I'm not going to list right now. So not new, not much new stock coming on to the market and in terms of what's there, that that total on the market at any point in time, we're down sort of 15% from this time last year. So you know the markets starting to tighten a bit, more competition and flows through the prices. So you have the listings side of the other side of things is still really interesting to watch. Not much coming to market and stop going down.

Kelvin Davidson: 21:40

So yeah, you'd expect that to create some competitive price pressures as well.

Nick Goodall: 21:46

Yeah, I mean that's been the upshot right. It's been low supply with an increasing demand, even if it's marginal, due to low security, peak interest rates, strong migration. All these factors is why we generally been saying the settings are here for the bottom of the market or close to it. The other one, from the flow of new listings coming to market too, has been just watching what's happening across the ditch and they've actually had a non-seasonal lift in the flow of listings coming to market and some of their cities particularly, I think, sydney and the read on that is that it could be people that are struggling as they come to refix their mortgages or, as mortgages they're floating continue to rise, they're struggling to keep up with payment. So that's one thing we're certainly watching listings data for as well, to see if there is a lift that it could, outside of normal seasonal trends, that it could actually show a sign of people needing to get out of the market.

Nick Goodall: 22:37

And one of the things I know you'll be looking at as well is when we do see someone list or someone sell.

Nick Goodall: 22:42

Have we seen people more, a greater share of people, that are downsizing their property too, which, if there was a real strong increase of that you could say that is some people have gone.

Nick Goodall: 22:52

Look, I've got off more than I could chew a couple of years ago and now I'm going to reduce the size of my mortgage by reducing the value and size of my property as well. So there's been an increase in that share, but it doesn't look to be anything too outlandish to say this in concern out there. And certainly the flow of listings is still, as you say, below seasonal norm. So there doesn't seem to be any panicked listing or selling out there yet, or even motivated selling. People are trying to get out because they simply can't afford any more either. So again, one of the signs we think, or one of the data sets we're looking for to see if there's any early signs of struggle. So far not looking like that, but it's definitely the other viewpoint on this one as well that that flow is staying low, but could provide some insight on the other side of things too.

Kelvin Davidson: 23:36

Yeah, and I think just from what I've quite really read about the Australian thing, in terms of listing some of those coming from investors too, there seems to be this pickup and investor selling in Australia, for whatever reason Now I don't rents picking up as well, so there's an interesting sort of divergence going on there, but I would hand to it at. Finally, signs of mortgage stress don't appear. Higher mortgage rates, people looking at those repricings and maybe starting to sell some investment properties now.

Kelvin Davidson: 24:03

They might be picked up by other investors, of course, or a potential opportunity for a new owner or occupier, but it does seem to be that dynamic coming through a little bit, which no really clear evidence that's happening here to any great degree right now. But yeah, it's only one to watch for sure.

Nick Goodall: 24:18

Yeah absolutely now all good, and just rounding out listings. Will there's anything in particular around regional insights? I know Auckland's total stock is much lower comparatively than New Zealand. Anything else from a regional perspective, and also rental listings as well. What's happening in that rental market? Have you seen fewer properties that we know? There's a bit of price pressure there, with more demand for rental property. What's happening from a rental listings perspective as well, before we take a look at what's coming up this week, calvin yeah, certainly on the sale side of things like, say, auckland, has tightened up pretty significantly.

Kelvin Davidson: 24:52

I don't have all of the regions up top of my head, but I think Wellington is another one where we are seeing a pretty stark downwards trend in that supply of properties sitting there at any one point in time in terms of listings. So I suppose those two markets, at least amongst the main centres, had the biggest falls in values, maybe just signs that that's turning around, stock tightens up and you start to see some price pressure emerge. So, yeah, I'd say Auckland and Wellington, certainly amongst those bigger regions. I'll understand that in terms of tighter listings. And yet on the rental side it's pretty similar.

Kelvin Davidson: 25:26

There's not many new rental listings coming to the market each week. The stock of available rental listings at any point in time is really low. And so, yeah, similar things. I mean it wasn't entirely clear in the latest rent data that that's flowed through to strongly rent pressures, but it could well be coming with migration high, the stock of rental listings still looking pretty tight, anticipating some kind of rental growth as well. So very similar patterns whether you're looking at the sort of buy-to-sell side of the market or the renting side of the market. So yeah, but just basically stocks, stocks tightening up early.

Nick Goodall: 26:03

Yeah, yeah, okay, nothing. Always a good one to watch as well, especially, like you say, when there's potential of investors selling out. They're not replaced by an investor. Then there's the concern that you know that means there's less rental stock, which causes greater rental price pressure and it causes difficult for an tenant. So a good one to keep an eye on what's happening with that side of things too.

Nick Goodall: 26:22

In terms of what's coming up, the main one for me to look out for will be the NZAC for German Museum Activity Index. Of course, we've got your new calculation. We've tried to fudge those annual figures to give us a quarterly change, to give us a feel for what the official GDP figure will look like when we get that, and God knows how long way too long and obviously likely to see us come out of that recession. We were in Q1, that minor-minor recession, but maybe not by much. And, as we just talked about earlier, even if we have, you know, I'm still concerned that we go back into it later on in the year. Well, there's a few other things that you'll be tracking for. Anything in particular you're watching out for no-transcript.

Kelvin Davidson: 27:03

Yeah, for me the mortgage lending figures on Wednesday from Reserve Bank for June are a pretty key indicator when we've seen sales activity, like we just talked about, we've seen sales activity pick up, so you'd sort of anticipate the mortgage lending figures for June might look a bit stronger. But for me it's actually the we're going to get new LVR figures, so of course the new LVR system kept down on the 1st of June, so this will be the first month of date that we will get the new breakdown.

Kelvin Davidson: 27:28

So but I'm going to have to reject my spreadsheets, but it's a relatively minor issue. It'll be interesting to see what's going on there. How much finance went out to owner occupiers with that increased speed limit? Have the banks been shifting closer? Have they made more finance available to take advantage of that increased speed limit? So that's definitely going to be an interesting one to watch. Yeah, consumer confidence from ANZ on July on Friday, just that little trend we've seen for the confidence to pick up a bit, inflation expectations to trend down. I suppose we'd be kind of hoping that we'd see more of the same and fill jobs for June on Friday is a really key one.

Kelvin Davidson: 28:08

You know it's that talk through the whole sort of job full recession. These are still a key indicator to really keep the eye on. At some point the jobs growth is presuming in a pager out, so not saying I'm necessarily going to be this month, but definitely want to watch because I think that labor market still holds the key. You know, can people get through this repricing of their mortgages? Well, I mean, a big chunk of that's going to depend on their job situation. So labor market is still really important. So, yeah, look out for that on Friday.

Nick Goodall: 28:37

Awesome, good roundup, mate. I'm pretty coming this week, so I know I'll have a jam packed one to talk about next week, but that'll do us for the day. So thanks very much, as per usual, for your thoughts on that. It's really good to dive into the inflation data and pick your economist brain there. So thank you very much for that and thanks very much for listening. Make sure you do subscribe to the show and get in touch. I'll leave a few links to some of those things you can download too in your podcast notes. Go check those out. I'll leave you to say thanks again.

Nick Goodall: 29:05

My name is Nick, he's Kelvin. You've been listening to New Zealand Property Maker Podcast. Thanks so much for watching the show.