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He also offers some of his best advice for young people looking to buy a home.
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 of what the REINZ index is doing in a month or what prices are doing … it’s hovering around plus or minus 2 per cent here or there,” he said.
“I think the biggest advice for buyers is what can you afford? And think really intelligently about the long term.”
“When you’re happy with that level, make the decision and have the confidence that you don’t need to buy or sell within a 12-month property cycle. Yes, it may be down 2% from where we are now, but in the end you’ll get more out of the money you save by not paying rent or the pride you have in the property.”
“As a result, you take better care of things and make smarter decisions about your career, your family and things like that,” he said.
“So the most important advice is: Let’s get rid of this short-termism. We are not a liquid stock market. We are not tradable stocks. We are bought for generations.”
As for the cycle we’re currently in, with the housing market more or less in the doldrums, Bud remains optimistic.
“Nobody can tell you if we’ve hit the bottom or are close to the bottom or whatever,” he said. “Anyone who says they can is making it up. But what we can say is that this is going to be a huge opportunity because interest rates are the primary driver of value.”
“So, have faith and maybe make some hard decisions. You know … I’m not going to sit here and talk about avocado toast, but I think there comes a time when we have to say: What’s the sacrifice?”
“What can you afford, understand the three- to five-year cycle, what you can afford on your current salary without having to rely on a bonus or some kind of lottery windfall.”
Bud also shared his thoughts on housing affordability and hopes that we can gain control of the market in the next cycle.
“The housing minister, the Honourable Bishop and others may disagree with me but I think supply is 100 per cent key,” he said.
“In this affordable price range, I don’t think it will change the price of Ponsonby villas.”
“I get asked that question a dozen times a day. ‘What’s the market like?’ Which market do you mean? Because I think the answer to a $3 million or $4 million house in Remuera is different to a $900,000 apartment in Hobsonville. It’s a different answer to an apartment in the CBD.”
“Just increasing supply in the affordable market won’t necessarily impact the entire New Zealand housing market. But it will create more opportunities for people to own their own home.”
Listen to the full episode Learn more about Lloyd Budd’s real estate journey and experience.
Money talks Is New Zealand Herald. It’s not about personal finance and economics – it’s just some well-known New Zealanders talking about money and sharing stories about the impact it has had on their lives and how it has shaped them.
The series is hosted by Liam Dann; The HeraldHe is a long-time writer and columnist, as well as a video and podcast host and producer. He joined The Herald 2003.
Money talks Available in Love Radio, Spotify, Apple PodcastsOr wherever you get your podcasts.
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