He also offers up some of his best advice for young people looking to get on the property ladder.
Budd warns people not to get too hung up on the news cycle and the latest data.
“I think we can all get lost in the noise over what a REINZ index has done over one month or what a price is doing... hovering around plus 2% or minus 2% here or there,” he says.
“I think the biggest tip for buyers is what can you afford? Have a really sensible look at the long-term.”
“When you’re comfortable at that level, make the decision, be confident because you’re not there to buy and sell in a 12-month real estate cycle. Yeah, it might drop from where we are today by 2%, but ultimately you would’ve gained more from the money you’ve saved from not paying rent or the pride you take in your property.”
It follows that you’ll look after things a bit better and make smarter decisions around your career and your family and things like that, he says.
“So the biggest tip is: let’s get out of this short-termism. We’re not a liquid stockmarket. We’re not a tradeable stock. We’re buying for generations.”
As to where we are in the current cycle, with the property market more or less in the doldrums, Budd remains optimistic.
“No one can ever tell you if we’re at the bottom or near it or whatever,” he says. “Anyone who says they can is making that up. But what we can say is there is going to be a great opportunity as the interest rate is the main driver of value.”
“So, be confident, and maybe make some tough decisions. You know... I’m not going to sit here and preach on avocado on toast, but I think some of the times we just have to say: what are the sacrifices?”
“What can you afford, knowing that three- to five-year cycle, what can you afford out of your current salaries, not having to rely on a bonus or not having to rely on some sort of Lotto windfall.”
Budd also shares his views on housing affordability and his hopes that we may be able to keep the market under control through this next cycle.
“The Housing Minister, Honourable Bishop and co might disagree with me on this, but I think supply is just 100% the key,” he says.
“In that affordable bracket, I don’t think it’s going to change the pricing for a villa in Ponsonby.”
“I get asked the question a dozen times a day. ‘How’s the market?’ Which market are you talking about? Because I think the $3 or $4 million home in Remuera has a different answer than that $900,000 unit at Hobsonville. That is a different answer to an apartment in the CBD.”
“Just increasing supply in an affordable market isn’t necessarily going to skew the entire New Zealand real estate market. But it will create more opportunities for people to own their own homes.”
Listen to the full episode to hear more from Lloyd Budd on his journey and experiences with real estate.
Money Talks is a podcast run by the NZ Herald. It isn’t about personal finance and isn’t about economics – it’s just well-known New Zealanders talking about money and sharing some stories about the impact it’s had on their lives and how it has shaped them.
The series is hosted by Liam Dann, business editor-at-large for the Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
Money Talks is available on iHeartRadio, Spotify, Apple Podcasts, or wherever you get your podcasts.
