Calvin Davidson

Great for tenants, not so good for landlords.

It depends on your perspective.

But yeah, their flow measure of rents, which relates to new tenancies, was minus 0.3% in the year to December.

So not a massive fall.

But as I've said before, any falls at all are pretty rare when it comes to headline rents.

yeah i mean again you know we've we've got walk we've had construction still coming through we've got a bit bigger physical stock of houses than we used to have net migrations down a lot we'll get an update on net migration this week as well so um yeah more of the same for rents as well you know it's been a pretty soft period you don't tend to see this very often and and they don't tend to last too long but this one just hanging around a bit so i guess people really keeping an eye on migration on that supplier property and just seeing how it plays out but yeah um for now rent's still still pretty soft

Yeah, so yes, I'll try to.

I mean, I'll spell out the key point first so that everyone gets that straight off the bat.

But last week we said, you know, we're getting pretty close to testing that probably realistic speed limit.

I mean, it's 20% cap for high DTI lending enforced by the Reserve Bank.

banks themselves will probably stick to 15 percent something like that and based on the numbers we had to hand at the time i think it was up to about 15 so i said okay looks like we're already testing that speed limit now as you say that's based on so so um i'll just go back again that's that was um based on before exemptions but of course the dti rules are based on after you take out exemptions for things like new builds for things like bank switching if you're not increasing the size of your loan

remediation loans for leaky homes so there's some exemptions in there which which they take out and then look at the dti limits so the point is once you account for that which we now can do we're not testing the dti speed limits so we previously said about 15 the owner occupiers are lower again so i'm probably not really going to deal with in too much here we said previously investors are about 15 once you take account for exemptions they're down at about 11 so um so yeah that's new information once you account for exemptions down to about 11

Now, it's been rising, but right now, we're not testing the DTI speed limit.

So that is a big change from last week.

But, you know, the trend is still upwards.

We're going to have to keep a pretty close eye on it because at the recent rate of increase, it could get to 15% at some point pretty soon.

But right now, you know, while it might be becoming part of the conversation, there may not be that sort of...

really important restraint from DTIs coming through that we perhaps previously thought so that's the key point I mean in terms of some of the little background yeah there's a table C40 on the Reserve Bank website which we look at and everybody else has looked at when you look really closely you can actually see now that that is before exemptions and it just becomes such a standard thing to use that table C40 and everyone was using it and

it was sort of just casually assumed i guess that that exemptions were already in there i mean that was the front-facing thing on the reserve bank website you you just used it you're like okay well this must account for exemptions um it's probably a bit casual on my behalf and maybe some others as well but um it doesn't so that c40 if anyone's using it doesn't account for exemptions there's another thing on the reserve bank website called financial stability indicators and they actually split out in in tab 2t of the of the spreadsheet

they've got before exemption and after exemption for both investors and owner occupiers so once you go in there you can see that yep there's about 15 16 percent of lending going out to investors at a high DTI before exemptions once you take account of exemptions it's down at 11 so um so yeah that's that's kind of the key point um we'll keep watching it but right now contrary to what we said last week those those DTI speed limits aren't yet kicking in either the