August 14, 2024 • 37 mins
Chief Executive Officer for Bayleys Auckland, Lloyd Budd, shares his best and worst money stories with Liam Dann.
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Speaker 1 (00:02):
Madam.
Speaker 2 (00:06):
Hi, I'm Liam Dan, New Zealand Herald's Business editor at
Large and welcome to this episode of Money Talks. This
is a podcast about money, but we're not going to
tell you how to get rich, and we're not going
to try and pick the next interest rate move. In
this series, I'll be talking to interesting New Zealanders about
how money has shaped their lives and what they've learned
(00:27):
over the years. For today's podcast, I'm joined by Chief
executive of Bailey's Auckland, Lloyd Bud. You're a Lloyd. Welcome
to Money Talks.
Speaker 3 (00:36):
Thanks Leam, great to be here.
Speaker 2 (00:38):
Yeah, look, just before we get into it, can't really
talk to a real estate chief without just saying, how's
this really tough winter going? It is pretty grim out
there in the property market right.
Speaker 1 (00:49):
Luckily, and we're seeing really positive trends i'ming through at
the moment. I was just on a call with the
team this morning. Our July numbers are about nineteen percent
on last year. The number of inquiries we're coming through
have increased as well month on month, so we're seeing
this momentum coming into spring really positive. And while we
know there's been some conversation around, prices hopping around. I
(01:14):
think we're starting to see confidence returning.
Speaker 2 (01:16):
Yeah, so that that interest rate story must start to
take hold, right, and people can see hopefully that things
extending to move.
Speaker 1 (01:22):
Yeah, very much, so very much. And the rhetoric as well. Right,
I mean we are going to see an ocr coming
off in the next six months. You'll know that answer
better than me. But ultimately I think that's that word confidence,
That word momentum is something we're seeing a lot coming
back into both buyers and sellers at the moment.
Speaker 2 (01:40):
Sure, well, look, we'll talk a bit more about property
later on, but let's go right back. I want to
ask you, yeah, if you can tell me a little
bit about your first memories of having money and having
money around you growing up.
Speaker 1 (01:51):
It's a fascinating story and prompted for today to go
back and actually think about some of these memories. Was
really interesting family as well. But it was actually a
Christmas and my birthdays around Christmas, and I know there's
lots of presents flying around and you're in that sort
of family environment, people and wrapping things, and my name
was on.
Speaker 3 (02:11):
This and it keary looked like a pop plant.
Speaker 1 (02:14):
Or some sort of an indoor, a mini tree basically,
and it was all wrapped up quite nicely, and I
went to it, and as I opened it, I found
that that money was actually staple to the leaves, and
in some cases coins were celutaped onto them. And I
thought this was really fascinating because I always wondered where money.
Speaker 3 (02:36):
Had come from.
Speaker 2 (02:37):
Yah, yeah, on trees.
Speaker 3 (02:39):
That was the Joe intended.
Speaker 1 (02:40):
And I think for my parents to actually have given
me that, there must have been something in my behavior
that had implied it was quite important to me, and
they wanted to maybe teach me that maybe it didn't
grow on trees and I had to learn other ways
to make a dollar.
Speaker 2 (02:55):
Yeah, So I mean they could have just given you
some money. It's a way to make you think and
start a conversation with your parents. You know, quite good
on that front around around money and financial matters. Did
you grow up in a household where it was that
financial literacy?
Speaker 3 (03:11):
Very much so?
Speaker 1 (03:12):
And also I think I learned from a young age
the value of money. You know, I didn't get pocket
money as such. There was an expectation for us to
do certain things and be a contribute towards the household.
But understanding what that went towards in terms of paying
a mortgage and putting groceries on the table. But I
(03:33):
do remember one story with Dad. I borrowed the family car,
and I don't know where i'd been, but I felt
that I was in a fifty K zone and I wasn't. Sorry,
I found I was in an eighty K zone and
I wasn't And I got caught doing eighty kilometers in
a fifty.
Speaker 2 (03:49):
Right, and I run a big fine.
Speaker 1 (03:52):
Yeah, so we're probably going back to the late nineties now,
and I reckon that fine would have been say four
hundred dollars back then. And so while I wasn't earning
pocket money, I was given a Dad paid the fine
for me, and I was given jobs and allocated and
even sporting performances and academic performances that were given monetary
(04:15):
value to them targets the hat. So as I achieved
one of those, we had this little notebook and I
bet a cross off from four hundred and sixty dollars
at the top right down to getting to zero dollars
at the bottom. And it took a long time, Yeah,
but it really did help understand that financial literacy from
you know, right from school.
Speaker 2 (04:36):
Yeah, so where were you growing up? Was the where
was the crash?
Speaker 3 (04:39):
It wasn't a crash.
Speaker 1 (04:42):
Yeah, the speeding, the speeding, Yes, the incorrect reading is
a sign. Look, I grew up in FUNDA proud norsem boy. Yeah, okay,
the tiny fa always been around rugby and growing up
in Northam was a big part of my childhood. But
we're this particular ev happened. We actually moved down to
Palmers North, which was a wonderful move from a schooling
(05:07):
and an opportunity point of view, to come across as
perhaps a slightly biggest school in Palmi Boys, a bit
more discipline. We had a wrecked by the name of
David Simms, so there was a lot of change in
that time.
Speaker 2 (05:22):
Sure academically, were you you know, were you interested in
money at school? Did you think?
Speaker 3 (05:27):
Or?
Speaker 2 (05:28):
I guess property is a weird thing to be interested
in as a kid, but the idea of buying and
selling and that sort of thing, Yeah.
Speaker 1 (05:34):
Yeah, interesting money, property, the two obviously hand in hand.
The incredible thing for me was for property. I don't
think I really had a genuine interest in that while
I was at school or while I was growing up. Yeah,
I was interested in money. Yeah, And I after I
would finish my rugby training or my sports after school,
(05:56):
I would go and load up literally load palettes full
of bricks or tiles or timber up at the local
policemakers in Palmersan North and in seven dollars an hour
and doing that. So I think clearly that understanding of
having to work for money and earn money to spend
was something that was really understood in that kind of
(06:18):
later teen years.
Speaker 2 (06:20):
Yeah, I mean, was there was there anything you were
you know, at that stage where you're saving for staff
or you're spending it each week.
Speaker 3 (06:26):
I was always a saver.
Speaker 1 (06:28):
I was always I don't know what I was saving for,
But again I guess I went back to that intrinsic Well,
I guess what was taught into me from my family,
just just protecting that as a very valuable asset and saving.
Speaker 3 (06:41):
For what that might what that might be.
Speaker 2 (06:43):
Yeah, clearly you got interested in property and real estate
at a young age, right, Like I understand that you
you sort of met Bailey himself.
Speaker 1 (06:55):
Yeah, so I was applying for a few scholarships, so
talk about money, right, so we valued Yah, are you
scholarships leaving high school and going into university. Money is
incredibly important student loans and books and fees and all
the things. And I met John Bailey, who was our chairman.
He's still involved in the company to today, some fifty
(07:17):
years later. And I met him at a function and
I was fortunate enough to be speaking about the scholarship
and what I would potentially do with my career. And
I walked off the stage and John Bailey came and
shoosed himself to me and said, you work.
Speaker 3 (07:34):
For me now. I said, okay, that's great, thank you,
Thank you John.
Speaker 1 (07:39):
Looking at his business card and I said, what do
you do and he says, well, I'm the chairman of Bailey's.
Speaker 3 (07:45):
And I said, oh, that's fantastic. What did they do? Yeah?
Speaker 1 (07:50):
Yeah, Well here I am, at seventeen years old, no
clue of real estate to even know, yeah, you know,
a brand such as the Bailey.
Speaker 2 (07:58):
Well, I mean there isn't you know, There isn't that
much of a reason unless you you know, I don't
know what your parents were doing, but unless you grow
up on it to know how that whole property sector works, right, correct?
Speaker 1 (08:08):
And I think it's something we talked about financial literacy,
and I think we do learn about demand and supply
and schools, we do learn a lot about the basics
of that. But you know, properties people's biggest purchase that
they may be maybe the biggest decision they'll make in
their lives, and generally we're not preparing people well enough
Foard as they go in to make those decisions.
Speaker 3 (08:29):
Yeah.
Speaker 1 (08:29):
I mean you're talking to an expert here, but you know,
the number of New Zealanders that own their homes is
declining every year, right, Yeah, I think your last stats
had them at fifty six percent of New Zealander's own
a home. I'd love to have more literacy and more
planning to help people get that pathway towards home ownership. Sure.
Speaker 2 (08:48):
Yeah, So when you're standing on the stage and doing speech,
what you know before hit met John Bailey, what were
you thinking of doing and what we're talking about at
that point?
Speaker 3 (08:56):
Honestly, I just don't know. I mean, you're seventeen years older.
Speaker 1 (08:59):
I mean, there was definitely an attraction towards a sales
or marketing or career where you could use those skills,
and obviously the real estate opportunity is one that meets
sales and marketing with puts all that to the tests
in front of a customer every day.
Speaker 2 (09:18):
Yeah, sure, I mean did you take them up on it?
Did you start working for them that early?
Speaker 3 (09:23):
I literally did land?
Speaker 1 (09:23):
Yea, literally, this would have been November or December in
the year two thousand and I started working January two
thousand and one.
Speaker 3 (09:32):
Wow.
Speaker 2 (09:32):
And did you go straight in as an actual You've
got a train of bit for a real estate agent,
But how did you go in? Did you go in
and start selling?
Speaker 3 (09:40):
Yeah?
Speaker 1 (09:40):
So I was still studying, So I was doing my
degree while I was working for family, So you can't
actually conduct real estate sales and those sort of things.
But within our company, we had a research department, and
my very first job, I'm looking around the Auckland CBD,
just pointing outside at the moment, one point two million
(10:01):
square meters of real estate in the Oakland CB now,
and my first job was to walk every single floor
in every single building with a clipboard in hand and
write down who was in there, whether it was vacant, well,
what they did know, whether it was media for ends
in me or accounting for video upstairs, whatever it was,
(10:21):
and then put all that information into an Excel sheet
and analyze it for our agents to see the trends, so.
Speaker 2 (10:29):
They could see what they've sold, what they potentially could
I guess.
Speaker 1 (10:32):
Dirrecton, we would look at things like absorption rates, what
sector we're taking the most amount of space and that
would lead us towards having conversations with that sector as
a target for perhaps new officers.
Speaker 2 (10:45):
Yeah, I mean it sounds like things took off there.
But did you did you finish the degree? Did you
go right through?
Speaker 1 (10:50):
So?
Speaker 2 (10:50):
What was what was your studying?
Speaker 3 (10:52):
Yeah? Finished the degree.
Speaker 1 (10:54):
I was actually at stayed on at MASSI in Palmerston
North after I finished Army Boys, and it was a
Bachelor of Business Studies right and through the Massy curriculum
you do a property major, but I also did a
business a management major as well, right Yeah, yeah, so
quite different to say Auckland University that's purely a property
(11:17):
focused course that doctor debraleeve he runs here.
Speaker 2 (11:20):
Yeah, and it sounds like you're quite into sports. Where
did you keep playing rugby and keep the sports going
through that?
Speaker 3 (11:27):
No, that's a short answer.
Speaker 1 (11:29):
Look, I think you know we're on Money Talks podcast
and that was the answer for me. I was never
as talented as others in my class. I was never
as talented as others in my family. My brother went
on to captain Italy and the Rugby World Cup in
Japan and twenty nineteen old man captain North Auckland back
in the eighties.
Speaker 3 (11:49):
So no, it was never the.
Speaker 1 (11:52):
Most talented in my family by any stretch. But I
think the money talks the appeal of getting into a career,
and I guess doing the applying the same discipline or
training or constant improvement in my career was something that
I chose to focus on instead.
Speaker 2 (12:12):
Yeah, and I mean I guess you know, everybody can
get the head around the idea of getting rich or
getting wealthy, But it was money the driver, or was
it you know, what was driving you to sort of
go down that at that business path?
Speaker 1 (12:24):
Do you think it never has been money the driver?
And I still don't think it is now. I think
it was about, you know, seeing that you could no
different to sports or no different to so many other things,
that you could set a goal and be able to
control or try to corral a whole bunch of independent
(12:46):
resources to achieve a common outcome. And I think there's
that satisfaction in being able to.
Speaker 2 (12:54):
Do that put it all together.
Speaker 1 (12:55):
Yeah, And the outcome might happen to be that we're
in a commission. The outcome may be that someone gets
a fantastic result for selling their property. But the pathway
or the customer journey to get there is what really
excited me. Yeah, that's fascinating to think, isn't it to
sell one property? How many touch points, how many resources?
(13:16):
How many things have to go right?
Speaker 2 (13:19):
Yeah for that and the right order and yeah yeah,
and and and I guess things that can go wrong,
but yeah, yeah, yeah, and so did you? Did you
start selling as soon as you could? And I mean
you become a qualified real estate agents soon as you
got out.
Speaker 1 (13:34):
Yeah, so back in those days, once you had your degree, yep,
that gave you the ability to sell real estate. We
was pre the days of the of the r A.
So had the degree and went into project sales and
marketing with Bailey. So transferred that research peace into into
sales and marketing, and we were working on some phenomenal
(13:56):
properties back in those days.
Speaker 3 (13:58):
Yeah.
Speaker 1 (13:58):
I think you got to think two thousand three, two
thousand and four, it's a huge rush on coastal property
dealing with some of the New Zealand's wealthiest people on
sites and Breamtail and mung Afi.
Speaker 2 (14:10):
Or yeah, and international money sort of came in around
then too, right because the post Lord of the Rings
New Zealand sort of started humming.
Speaker 1 (14:16):
Team New Zealand around that time. Absolutely spot on and
that was fun. It was again for a young guy
into that. It was probably a little bit surreal to
see some of that we're talking about money. To see
some of that wealth was mind blowing and I think
that that might have been part of the inspiration to
try and push a bit harder and work a bit
(14:37):
harder to see it one day.
Speaker 3 (14:39):
Yeah, sure, sort of be up at those levels.
Speaker 2 (14:49):
Did you focus on getting your own property earlier? You're
not one of those. You know, we have the stories
in the Herald every now and then, you know the
kid who's got their first house together at nineteen or
something like that.
Speaker 3 (15:00):
It wasn't quite nineteen, but it was definitely a goal
of mine.
Speaker 1 (15:03):
In fact, my first home was up in Fungday, so
as I said, born and bred up north, and it
was an opportunity through work that had taken me to
have a lot of interest up in Fungday and I
bought my first home for around about I think it
was three hundred and twenty seven thousand dollars. Well, yeah,
in two thousand and five, I want to say, and
(15:26):
you know, it seems mind blowing to think of those
numbers now with where medium house prices are and what's
going on.
Speaker 2 (15:32):
Yeah, I mean, I'm old enough to remember when four
hundred thousand suddenly it seemed like a big amount for
an Auckland house. That's like I remember living in a
house on Williams and Avene Pontsanbe gray Lin and hearing
that the place I was living in was worth four
hundred thousand and thinking, gee, it's probably worth ten times.
It's probably with four million.
Speaker 1 (15:52):
Now keep in mind also, Liam, that you know, two
thousand and five, I was probably paying close to nine percent.
Speaker 2 (15:59):
Yeah, that was rough, right until the GFC kind of
pulled the carpet out, and then it was rough for
other reasons.
Speaker 1 (16:04):
That's right, And I'm hearing rates now, you know, stabilizing.
I think some of the main banks got rates around
six percent for long term money at the moment, and
I think we probably have to adjust our expectations on
what sustainable interest rates are in terms of supporting that market.
Speaker 2 (16:19):
Yeah, yeah, absolutely, So how did you go through the
GFC then, because you would have been, you know, all
go and then there was a big crash in two
thousand and seven eight nine.
Speaker 1 (16:28):
So through more good luck than good management, I happen
to sell a business interest I had in a Bailey's
franchise in two thousand and seven, right, and got a
one way ticket to d BAI.
Speaker 3 (16:43):
Yeah.
Speaker 2 (16:43):
So, just to jump back a little bit, you already
had a stake in a franchise pretty early on, that's right. Yeah,
I was when I was talking about that interest back
and fun at eight yep. I was fortunate enough to
have a forty five percent share yep of Bailey's in
the North. I was twenty three at the time, which
there must be It's got to be some sort of record.
Speaker 3 (17:06):
Yeah, I'm not sure that.
Speaker 1 (17:11):
So no, through as I say, more good luck than
good management, my business partner and I saw a different future.
And I remember speaking with John Bailey jb our chairman,
and I love the company. I've obviously worked here literally
since the day I left school. I wouldn't mind hitting
(17:33):
overseas for twelve months just to MYI most people do
it before that they start their career, and yeah, so
fortunate for me. I was actually in Dubai when the
GFC had.
Speaker 2 (17:45):
Yeah, and I guess that was a little bit buffer
that was that was sort of booming right through to
something extent.
Speaker 1 (17:49):
Absolutely spot on, and Dubai changed a lot on the
back of the GFC because it was different money that
came in afterwards. But as you say, because of the
diversity of people there where the wealth was coming from
all over the literally all over the world, it sustained
(18:10):
a pretty good momentum through that eighth nine period and
ended up being a great place to grow your career.
Speaker 2 (18:16):
Yeah, so you were selling property there as well.
Speaker 1 (18:20):
Actually went on the development side for a look under
the hood to see what the development world was like.
I was an incredible sort of random story on maybe
not so much money talks, but I was in.
Speaker 3 (18:34):
One of my projects was in Syria. Wow. And back
in those days, we had the BlackBerry.
Speaker 1 (18:42):
And they had an app on their equity sos And
one day this thing starts beeping and it turns out
that our sales center was quite liked by the rebels
who were looking to attack Damascus. Wow. And they turned
up one day and took over our sales center. So
part of my real estate career, of part of my
job was to help relocate about a dozen or so
(19:05):
families from Syria into other parts of the Middle East.
Speaker 3 (19:09):
Wow, yeah, highakes stuff the spring and twenty eleven.
Speaker 2 (19:13):
Yeah, so you were there. You're obviously there for a while.
Speaker 1 (19:16):
In the end ended up Yeah, my twelve month oughe
lasted about five and a half years. I always stayed
in touch with the family, the Bailey family back here,
but I think that that career opportunity and the scale
of what the Middle East offered was something that I
was really appealing to me. And it was one of
(19:38):
those things that I never ever planned for. You never
ever said you'd be here for that long or or
do that, But as the opportunities presented themselves, it was
the right thing for us to to stay and make
the most of them.
Speaker 3 (19:51):
Yeah.
Speaker 2 (19:51):
Yeah, and you so you came back to around twenty
twelve or.
Speaker 3 (19:55):
So, were with about six years. So twenty fifteen, twenty fifteen,
we came back.
Speaker 1 (20:00):
My wife and I we got married in New Zealand.
But while we were away, my daughter was actually born
in the American hospital in Dubai in twenty thirteen.
Speaker 3 (20:09):
So yeah, we had huge life changing experience in Middle Least.
Speaker 2 (20:14):
So it was a little bit that lifestyle that you
missed coming back to New Zealand looking for the Kiwi life.
Speaker 3 (20:19):
Absolutely spot on.
Speaker 1 (20:20):
You know, we talk about it a lot around you know,
it's getting in the boat, it's going to spend time
with family, it's the I think there's something really special
about that New Zealand lifestyle that ultimately we all has
been as much time as we can on a beachure
on a boat or and that was a huge appeal
for us.
Speaker 3 (20:39):
Yeah.
Speaker 2 (20:39):
Yeah, Okay, before I ask you a few of our
quick fire questions, I'm keen to dig a bit more
into the whole the property thing, because you know, it
is a fascinating topic, and it is in a way
it is a kind of a national obsession. Maybe after
rugby it might be the biggest national obsession. You talked
about trying to get those home ownership numbers up, you
know other things when you look at it, I guess
(21:00):
I'm thinking about tips or advice for the way people
should approach getting on the property ladder and also some
of the pitfalls to watch out for.
Speaker 1 (21:09):
Yeah, it's something we obviously get asked a lot, and
I go back to that confidence and that momentum piece.
I think we can all get lost in the noise
over what a Rhyan's index has done over one month,
for particularly what our price is doing hovering around plus
two minus two percent here or there. I think the
(21:31):
biggest tip for buyers is what can you afford? Have
a really sensible look at a long term rate, five
year money. What can you afford to which will set
yourself up for not only your own future, but literally
generations to come. And then when you're comfortable at that level,
make the decision. Be confident because you're not there to
(21:53):
buy and sell in a twelve month real estate cycle
that might drop from where we are today by two percent.
I'll ultimately you would have gained more by the money
you've saved from not paying rent or the pride you
take in your property, and therefore you look after things
a bit better and make smarter decisions around your career
and your family and things like that. So the biggest
(22:16):
tip is going, let's let's get out of this kind
of short termism. We're not a liquid stock market, we're
not a tradable stock We're buying for generations. And if
you think that way, and particularly where we are right now,
no one can ever tell you if we're at the
bottom or near or whatever. Anyone who says they can
is making that up. But what we can say is
(22:37):
there is going to be great opportunity as the interest rate,
the main driver of value comes back in the next
six to nine months, that it's only going to see
that investment get more and more valuable as you set up. Yeah,
so be confident, but maybe make some tough decisions.
Speaker 3 (22:53):
You know.
Speaker 1 (22:53):
I'm not going to sit here and preach and have
a cardo on toast, but I think sometimes we just
have to say, what are the sacrifice is that we
can make now that in five or ten years time
we can bear the rewards of we can be enjoying
to then go and by the sparple or extend the
room for the new edition and the family or whatever
(23:14):
those things may be.
Speaker 2 (23:15):
Yeah, yeah, I mean I guess that it goes to
the pitfalls as well. I mean, there are a few
horror stories that we're hearing, you know, like the people
saw the two point five percent interest rates is almost
as if they were normal, and they weren't right. So
so you know, again it's it's extending that time frame
and seeing what's realistic over many years rather than basically
(23:36):
what's happening right now, which we're all focused on.
Speaker 1 (23:39):
Correct And I use the word sustainable in the sense
of ongoing rather than necessarily green factors, but having that
sustainable look and you know, as I say it might
it might be really appealing to save fifty BIPs or
one hundred BIPs by going for that short term money,
but there's a reason why that's there. So so again
I would advise, what what can you afford knowing you
(24:01):
can that's sort of 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 yeah, you know, some sort of lotto windfall or
financial windfall. What is the bit that you can honestly
sit there and say I can afford this every two
weeks out of my mortgage.
Speaker 3 (24:22):
And once you do that, I don't think you'll ever
look back. Yeah.
Speaker 2 (24:25):
Sure, I mean people will always talk about the affordability
of houses and it's got really tough. And so you know,
does that when you look at it, does it mean
maybe moving around the country that kind of thing, because
Auckland is pretty daunting for a lot of people. I
guess unless you know, unless you're looking at other options,
so you've got choices around, maybe apartments, that kind of thing.
Speaker 3 (24:45):
Do you think. I'm probably more on the latter.
Speaker 1 (24:48):
I think the luxury of moving around the country isn't
there for everybody, particularly younger professionals starting up. There may
not be the depth of job market. So I think
looking with in the Auckland stock it's actually maybe looking
at those other opportunities. It may mean a slightly longer
commute and may mean needing to use some of the
(25:08):
public transport. Hopefully that eventually improves over the next few years.
But I think looking at those different typologies of homes
will give you some reach in Auckland and just again
getting in. It's not your forever home, it's not you
don't have to think, oh, I'm not going to be in.
It's fine, but start on the ladder to get things moving.
Speaker 2 (25:28):
Yeah, I guess there's a trap and looking at the
home that you want to end up and going oh,
that's just far too expensive. I can't imagine ef you're
getting there right, So you've got to get started.
Speaker 1 (25:39):
I think so, And I think about my own personal
situation as well. I don't think you should always going
to be wanting something different. And maybe the kids are
left home, maybe there's a new addition to the family.
All these things will naturally change what you'll look for
in a home. So don't try and second guess your
(25:59):
own self five years time. Yeah, I think as I say,
as long as you are as long as you can
afford it, and I mean to afford out of your
out of your current salary or your family income. That's
what we're looking for, not going, oh if this year
we do this in this Yeah, that's the pitfall. I
think we're gonnall stay clear.
Speaker 3 (26:16):
Well.
Speaker 2 (26:16):
One of one of the things I always think is,
you know, a marker of the very wealthy and the
people who are successful in business is actually acting. I mean,
you know, actually doing the thing. Because we spend a
lot of time talking about it and thinking about it,
but at some point you have to just get out
there and do it. I suppose is it to some people?
It might even be daunting just just the very process.
(26:38):
I mean, does Baileys and real estate agents sort of
open to just talking to people and get explaining how
the because the paperwork and all that sort of stuff
can be quite daunting.
Speaker 3 (26:49):
Of course it can.
Speaker 1 (26:49):
And as we said, it's the biggest decision that someone
will ever make in their life. So we like to
get alongside people early, and we sort of talk about
it as match fatter. I seem to have a lot
of sports references. But you know, we will take someone
along to an auction that the property they're not interested in,
but just to go and sit in the room and go, hey, hey,
(27:11):
this is what's happening.
Speaker 3 (27:12):
This is the vendor. The auctioneer now is calling for
an opening.
Speaker 1 (27:15):
But this is what that means, you know, this is
this is the process that that guy there, he's on
the phone to someone betting that they're watching online, and
these are the documents that they're going through to set
a reserve or to to maybe change terms for a
slightly little maybe a delay the deposit by two weeks
or subject to some other term. And as you do that,
(27:38):
more and more they gain confidence in the process, which
then means they're match fit to buy when their ideal
property is there. Yeah, and there's nothing worse than seeing
that property and not being ready, haven't spoken to the bank,
haven't got a valiation, haven't got your ducks in a row, because.
Speaker 2 (27:57):
You might it's going to take your two weeks or
something and you might miss it.
Speaker 3 (28:00):
That'spot on absolutely spot only.
Speaker 2 (28:08):
Let's move on to our quick fire questions. I know
you've you've you've listened to the podcast before, so it
won't be too surprising. But what's the poorest you've ever been?
A student at Massive University?
Speaker 1 (28:19):
Yeah, sitting in a five bedroom flat on Ada Street,
struggling to avoid forward baked beans from back and save
to get through the week.
Speaker 2 (28:27):
It is so often it's it's it is the experience.
But was it valuable to you? Do you think to
be that poor?
Speaker 1 (28:33):
Absolutely? Yeah, again, I think you appreciate the value of money.
I actually talk to someone about the value of money.
I actually worked in a student bar alongside Anni moobray
re billionaire, and you know, we both worked as hard
as each other to get that they'd be able to
afford that drink at the end of the week or
(28:53):
that cannon bake beans.
Speaker 3 (28:54):
So I think the value of being poor, or the
value of understanding money is hue. Yeah.
Speaker 2 (29:00):
Absolutely. On the flip side of that when you finally
got a bit of money together, had a few paychecks
in your pocket, was there something that you splashed out
on to sort of let yourself know that you made
it to a certain level.
Speaker 3 (29:14):
There's one confession that's a bit of a watch guy. Oh.
Speaker 1 (29:17):
Yes, when there's a nice significant milestone, I've tend to
have celebrated by buying a watch.
Speaker 3 (29:26):
So each watch will have a story behind And.
Speaker 2 (29:30):
I ask what you're wearing right now?
Speaker 3 (29:32):
Sure? This is the Cerolic sub Mariner. Yeah.
Speaker 1 (29:35):
I actually bought this when we moved back from Dubai
to New Zealand. So it was that point in my
life where I was decided to invest in one of these.
Speaker 2 (29:44):
Yeah, because you know it's a passion and it's a hobby,
but it's actually they are an investment, right, so in
some ways probably even compared to a car, is it.
Speaker 3 (29:53):
Yeah?
Speaker 1 (29:53):
I got another one for my fortieth from my wife
and she said, oh, maybe we should look at you
got enough watches, you know what I mean. I said, well,
let's come and give them. I'll give them service and
we'll actually get evaluation. And then after we left she said, well, okay, no,
you can definitely get another one. Because you make more
one off watches than you have off off a bunch
of other things.
Speaker 2 (30:12):
I guess it's much like you know, some people would
be out whatever, But yeah, it's very cool. Do you
still imagine winning lotto or do you buy lotto tickets?
Speaker 1 (30:22):
This is a little bit of a cidbar. Loto cracks
me out right now. People won't buy a ticket to
win six million dollars, but they will to thirty. I mean,
I don't understand that.
Speaker 3 (30:31):
And now you know, I do a lot of game
theory and then sometimes get driven down a rabbit hole
with it.
Speaker 1 (30:37):
But it's amazing to think that for that, you know,
that twenty four dollars ticket or whatever it is, someone's
happy with a thirty million dollars return, but they're not
happy with a six million dollar return.
Speaker 2 (30:47):
And there's still these minuscule odds regardless.
Speaker 1 (30:49):
Yeah, so no, I occasionally will buy a ticket when
it's a thirty million dollar jackpot, But no, I think
we've got to work hard and pretty more sustainable ways
to deliver that.
Speaker 2 (31:01):
Put your twenty backs a week and a fund for
correct you can afford deposit on the house. Yeah, we
touched on this earlier. Actually, but just how important money
is to you or is it more of a by
product of success? I mean, what drives you now?
Speaker 1 (31:17):
I still think it's particularly within our team, within our culture,
it's still the success of that transaction. I recently was
involved in a deal. It was a lease in christ
Church for a car company. The fee, by the time
(31:38):
it's split and divided up between the agents and the company,
the number would be absolutely nominal. But the excitement to
do that deal, to have a happy landlord and a
happy tenant was something that still drives me and our
team every day.
Speaker 2 (31:55):
I think it's something that's misunderstood by a lot of
New Zealanders when they look at wealthy and successes for people,
particularly in business, that they think it is just everyone
I've talked to it is it's almost always that the
doing the deal or doing the thing, making the thing happen.
And some people it's it's whatever, you know, climbing a mountain,
(32:15):
and some people it's business right.
Speaker 3 (32:17):
Well, it's it all comes back to the customer, you know.
Speaker 1 (32:20):
I think that for us, we don't have widgets, we
don't have a product we've but but seeing that seeing
someone give the keys to their new home or to
you know that someone that's been able to achieve some
financial freedom by selling an asset. Those things truly do
drive you to want to do it more and more.
Speaker 2 (32:38):
Yeah, look we're bumping up against time. The last sort
of question I have is kind of a big one,
and and it's it's that one about you know, when
you look at wealth and equality out there, people who
are just never going to afford a home. If we
could make your prime minister for a day, what's the
what's the policy, or what's the thing you'd like to
do most? That might might shift the dial there.
Speaker 1 (33:00):
I think you've got to take it back to real
estate because I am there and that's my game. We
need to build more homes right now. Obviously QUI bill
these days is a bit of a bad word. But
if we were able to deliver a successful key we build,
I think that will change more lives and deliver more
value for our country than anything else, whether whether you
(33:23):
own it or whether you rent it, or whether you
are unfortunate enough to be just living in there because
that's your accommodation. I think there's real pride in having
your own place to call home. People work harder on
community they work harder to send their kids to school
and get educated. They feel a belonging to be a
(33:44):
part of something bigger than themselves. So if you could
waive that magic wand and deliver that policy, I think
that would change New Zealand for the better.
Speaker 2 (33:53):
I mean, do you think there's a way to get
You know, we've seen some progress in the last year
or so on affordability, but the risk is, you know,
you don't want a dead market. It's no good for anyone.
Is there a way to sort of keep house prices
sort of relatively subdued so that affordability comes back, but
without without you know, from your guys perspective, you want
(34:15):
you need to turn over and you need need people
to be confident about the market, right I do.
Speaker 3 (34:20):
And Housing Minister, Honorable Bishop and co.
Speaker 1 (34:23):
Might disagree with me on this, but I think supply
is just one hundred percent the key in that affordable bracket.
Speaker 3 (34:31):
Yeah. I don't think it's going to change the pricing
over here.
Speaker 2 (34:35):
Yeah for for a villa and pons Bill and we
in New.
Speaker 1 (34:38):
Zealand very quick to talk about I mean, I'm in
the game, so I get asked the question a dozen
times a day, how's the market?
Speaker 3 (34:44):
Yeah, which market are you talking about? Yeah?
Speaker 1 (34:47):
Because I think the three or four million dollar home
and rimy era has a different answer than the nine
hundred thousand dollars unit at Hobsonville. Yeah, it has a
different answer to a apartment in the CBD. So I think,
just by increasing supply in an affordable market, is it
necessarily going to skew the entire New Genumy State market? Yeah,
(35:10):
but it will create more opportunities for people.
Speaker 3 (35:13):
To own their own homes.
Speaker 2 (35:14):
And it does feel like maybe that with you know,
signs of progress perhaps so that we could get something
rolling with.
Speaker 1 (35:21):
I think there's a whole other podcast there on that.
But look, the macro economics are right. Land has come off,
building costs have come off, interest rates are trending down.
Speaker 3 (35:35):
So if there's a time to buy land and build houses,
it's now.
Speaker 1 (35:38):
Yeah, you know, it's got to be a time where
we invest in again, as I said before, stop thinking
in these quarterly or these twelve monthly cycles.
Speaker 3 (35:48):
We need to get a long term vision on delivering supply.
Speaker 2 (35:52):
And that does come back to some of that long
term thinking. So then, how do you feel about you know,
all the debate about on that demand side, you know, taxing,
capital gains tax, you know, all the things that people
sort of see as ways to sort of, I guess,
subdue the market demand.
Speaker 3 (36:10):
Yeah, I guess.
Speaker 1 (36:11):
I guess we're tax will deal with demand. I think,
you know, obviously we're obviously we're talking increasing supplies the
other way. I'm not against seeing taxes around real estate.
I don't know that capital gains tax is the right
way to go about it. We can look across the
ditch at our colleagues in Australia. Obviously there is a
stamp duty there, there is a foreign buyers tax there.
(36:34):
These are things that have been debated around the last
election cycle, and I do think there is an opportunity there,
and particularly if we can ring fence that and see
that going into housing supply. Yeah, perhaps a stamp duty
isn't a bad thing for us to look at introducing
over time.
Speaker 2 (36:53):
Sure, that's brilliant. Lloyd, going to leave it there. Thank
you very much for talking.
Speaker 3 (36:57):
Thank you, Lim appreciate it. Cheers.
Speaker 2 (37:00):
Thanks for listening to this episode of Money Talks. If
you want to get in touch, drop me a line
Liam dot Dan at zed me dot co dot nz
and you can read more from me at inzidherld dot
co dot nz. Thanks to my producer Ethan Sills and
sound engineer Lianne mac donald. Follow Money Talks on iHeartRadio
(37:21):
or wherever you get your podcasts, with new episodes available
every Thursday
Madam.
Speaker 2 (00:06):
Hi, I'm Liam Dan, New Zealand Herald's Business editor at
Large and welcome to this episode of Money Talks. This
is a podcast about money, but we're not going to
tell you how to get rich, and we're not going
to try and pick the next interest rate move. In
this series, I'll be talking to interesting New Zealanders about
how money has shaped their lives and what they've learned
(00:27):
over the years. For today's podcast, I'm joined by Chief
executive of Bailey's Auckland, Lloyd Bud. You're a Lloyd. Welcome
to Money Talks.
Speaker 3 (00:36):
Thanks Leam, great to be here.
Speaker 2 (00:38):
Yeah, look, just before we get into it, can't really
talk to a real estate chief without just saying, how's
this really tough winter going? It is pretty grim out
there in the property market right.
Speaker 1 (00:49):
Luckily, and we're seeing really positive trends i'ming through at
the moment. I was just on a call with the
team this morning. Our July numbers are about nineteen percent
on last year. The number of inquiries we're coming through
have increased as well month on month, so we're seeing
this momentum coming into spring really positive. And while we
know there's been some conversation around, prices hopping around. I
(01:14):
think we're starting to see confidence returning.
Speaker 2 (01:16):
Yeah, so that that interest rate story must start to
take hold, right, and people can see hopefully that things
extending to move.
Speaker 1 (01:22):
Yeah, very much, so very much. And the rhetoric as well. Right,
I mean we are going to see an ocr coming
off in the next six months. You'll know that answer
better than me. But ultimately I think that's that word confidence,
That word momentum is something we're seeing a lot coming
back into both buyers and sellers at the moment.
Speaker 2 (01:40):
Sure, well, look, we'll talk a bit more about property
later on, but let's go right back. I want to
ask you, yeah, if you can tell me a little
bit about your first memories of having money and having
money around you growing up.
Speaker 1 (01:51):
It's a fascinating story and prompted for today to go
back and actually think about some of these memories. Was
really interesting family as well. But it was actually a
Christmas and my birthdays around Christmas, and I know there's
lots of presents flying around and you're in that sort
of family environment, people and wrapping things, and my name
was on.
Speaker 3 (02:11):
This and it keary looked like a pop plant.
Speaker 1 (02:14):
Or some sort of an indoor, a mini tree basically,
and it was all wrapped up quite nicely, and I
went to it, and as I opened it, I found
that that money was actually staple to the leaves, and
in some cases coins were celutaped onto them. And I
thought this was really fascinating because I always wondered where money.
Speaker 3 (02:36):
Had come from.
Speaker 2 (02:37):
Yah, yeah, on trees.
Speaker 3 (02:39):
That was the Joe intended.
Speaker 1 (02:40):
And I think for my parents to actually have given
me that, there must have been something in my behavior
that had implied it was quite important to me, and
they wanted to maybe teach me that maybe it didn't
grow on trees and I had to learn other ways
to make a dollar.
Speaker 2 (02:55):
Yeah, So I mean they could have just given you
some money. It's a way to make you think and
start a conversation with your parents. You know, quite good
on that front around around money and financial matters. Did
you grow up in a household where it was that
financial literacy?
Speaker 3 (03:11):
Very much so?
Speaker 1 (03:12):
And also I think I learned from a young age
the value of money. You know, I didn't get pocket
money as such. There was an expectation for us to
do certain things and be a contribute towards the household.
But understanding what that went towards in terms of paying
a mortgage and putting groceries on the table. But I
(03:33):
do remember one story with Dad. I borrowed the family car,
and I don't know where i'd been, but I felt
that I was in a fifty K zone and I wasn't. Sorry,
I found I was in an eighty K zone and
I wasn't And I got caught doing eighty kilometers in
a fifty.
Speaker 2 (03:49):
Right, and I run a big fine.
Speaker 1 (03:52):
Yeah, so we're probably going back to the late nineties now,
and I reckon that fine would have been say four
hundred dollars back then. And so while I wasn't earning
pocket money, I was given a Dad paid the fine
for me, and I was given jobs and allocated and
even sporting performances and academic performances that were given monetary
(04:15):
value to them targets the hat. So as I achieved
one of those, we had this little notebook and I
bet a cross off from four hundred and sixty dollars
at the top right down to getting to zero dollars
at the bottom. And it took a long time, Yeah,
but it really did help understand that financial literacy from
you know, right from school.
Speaker 2 (04:36):
Yeah, so where were you growing up? Was the where
was the crash?
Speaker 3 (04:39):
It wasn't a crash.
Speaker 1 (04:42):
Yeah, the speeding, the speeding, Yes, the incorrect reading is
a sign. Look, I grew up in FUNDA proud norsem boy. Yeah, okay,
the tiny fa always been around rugby and growing up
in Northam was a big part of my childhood. But
we're this particular ev happened. We actually moved down to
Palmers North, which was a wonderful move from a schooling
(05:07):
and an opportunity point of view, to come across as
perhaps a slightly biggest school in Palmi Boys, a bit
more discipline. We had a wrecked by the name of
David Simms, so there was a lot of change in
that time.
Speaker 2 (05:22):
Sure academically, were you you know, were you interested in
money at school? Did you think?
Speaker 3 (05:27):
Or?
Speaker 2 (05:28):
I guess property is a weird thing to be interested
in as a kid, but the idea of buying and
selling and that sort of thing, Yeah.
Speaker 1 (05:34):
Yeah, interesting money, property, the two obviously hand in hand.
The incredible thing for me was for property. I don't
think I really had a genuine interest in that while
I was at school or while I was growing up. Yeah,
I was interested in money. Yeah, And I after I
would finish my rugby training or my sports after school,
(05:56):
I would go and load up literally load palettes full
of bricks or tiles or timber up at the local
policemakers in Palmersan North and in seven dollars an hour
and doing that. So I think clearly that understanding of
having to work for money and earn money to spend
was something that was really understood in that kind of
(06:18):
later teen years.
Speaker 2 (06:20):
Yeah, I mean, was there was there anything you were
you know, at that stage where you're saving for staff
or you're spending it each week.
Speaker 3 (06:26):
I was always a saver.
Speaker 1 (06:28):
I was always I don't know what I was saving for,
But again I guess I went back to that intrinsic Well,
I guess what was taught into me from my family,
just just protecting that as a very valuable asset and saving.
Speaker 3 (06:41):
For what that might what that might be.
Speaker 2 (06:43):
Yeah, clearly you got interested in property and real estate
at a young age, right, Like I understand that you
you sort of met Bailey himself.
Speaker 1 (06:55):
Yeah, so I was applying for a few scholarships, so
talk about money, right, so we valued Yah, are you
scholarships leaving high school and going into university. Money is
incredibly important student loans and books and fees and all
the things. And I met John Bailey, who was our chairman.
He's still involved in the company to today, some fifty
(07:17):
years later. And I met him at a function and
I was fortunate enough to be speaking about the scholarship
and what I would potentially do with my career. And
I walked off the stage and John Bailey came and
shoosed himself to me and said, you work.
Speaker 3 (07:34):
For me now. I said, okay, that's great, thank you,
Thank you John.
Speaker 1 (07:39):
Looking at his business card and I said, what do
you do and he says, well, I'm the chairman of Bailey's.
Speaker 3 (07:45):
And I said, oh, that's fantastic. What did they do? Yeah?
Speaker 1 (07:50):
Yeah, Well here I am, at seventeen years old, no
clue of real estate to even know, yeah, you know,
a brand such as the Bailey.
Speaker 2 (07:58):
Well, I mean there isn't you know, There isn't that
much of a reason unless you you know, I don't
know what your parents were doing, but unless you grow
up on it to know how that whole property sector works, right, correct?
Speaker 1 (08:08):
And I think it's something we talked about financial literacy,
and I think we do learn about demand and supply
and schools, we do learn a lot about the basics
of that. But you know, properties people's biggest purchase that
they may be maybe the biggest decision they'll make in
their lives, and generally we're not preparing people well enough
Foard as they go in to make those decisions.
Speaker 3 (08:29):
Yeah.
Speaker 1 (08:29):
I mean you're talking to an expert here, but you know,
the number of New Zealanders that own their homes is
declining every year, right, Yeah, I think your last stats
had them at fifty six percent of New Zealander's own
a home. I'd love to have more literacy and more
planning to help people get that pathway towards home ownership. Sure.
Speaker 2 (08:48):
Yeah, So when you're standing on the stage and doing speech,
what you know before hit met John Bailey, what were
you thinking of doing and what we're talking about at
that point?
Speaker 3 (08:56):
Honestly, I just don't know. I mean, you're seventeen years older.
Speaker 1 (08:59):
I mean, there was definitely an attraction towards a sales
or marketing or career where you could use those skills,
and obviously the real estate opportunity is one that meets
sales and marketing with puts all that to the tests
in front of a customer every day.
Speaker 2 (09:18):
Yeah, sure, I mean did you take them up on it?
Did you start working for them that early?
Speaker 3 (09:23):
I literally did land?
Speaker 1 (09:23):
Yea, literally, this would have been November or December in
the year two thousand and I started working January two
thousand and one.
Speaker 3 (09:32):
Wow.
Speaker 2 (09:32):
And did you go straight in as an actual You've
got a train of bit for a real estate agent,
But how did you go in? Did you go in
and start selling?
Speaker 3 (09:40):
Yeah?
Speaker 1 (09:40):
So I was still studying, So I was doing my
degree while I was working for family, So you can't
actually conduct real estate sales and those sort of things.
But within our company, we had a research department, and
my very first job, I'm looking around the Auckland CBD,
just pointing outside at the moment, one point two million
(10:01):
square meters of real estate in the Oakland CB now,
and my first job was to walk every single floor
in every single building with a clipboard in hand and
write down who was in there, whether it was vacant, well,
what they did know, whether it was media for ends
in me or accounting for video upstairs, whatever it was,
(10:21):
and then put all that information into an Excel sheet
and analyze it for our agents to see the trends, so.
Speaker 2 (10:29):
They could see what they've sold, what they potentially could
I guess.
Speaker 1 (10:32):
Dirrecton, we would look at things like absorption rates, what
sector we're taking the most amount of space and that
would lead us towards having conversations with that sector as
a target for perhaps new officers.
Speaker 2 (10:45):
Yeah, I mean it sounds like things took off there.
But did you did you finish the degree? Did you
go right through?
Speaker 1 (10:50):
So?
Speaker 2 (10:50):
What was what was your studying?
Speaker 3 (10:52):
Yeah? Finished the degree.
Speaker 1 (10:54):
I was actually at stayed on at MASSI in Palmerston
North after I finished Army Boys, and it was a
Bachelor of Business Studies right and through the Massy curriculum
you do a property major, but I also did a
business a management major as well, right Yeah, yeah, so
quite different to say Auckland University that's purely a property
(11:17):
focused course that doctor debraleeve he runs here.
Speaker 2 (11:20):
Yeah, and it sounds like you're quite into sports. Where
did you keep playing rugby and keep the sports going
through that?
Speaker 3 (11:27):
No, that's a short answer.
Speaker 1 (11:29):
Look, I think you know we're on Money Talks podcast
and that was the answer for me. I was never
as talented as others in my class. I was never
as talented as others in my family. My brother went
on to captain Italy and the Rugby World Cup in
Japan and twenty nineteen old man captain North Auckland back
in the eighties.
Speaker 3 (11:49):
So no, it was never the.
Speaker 1 (11:52):
Most talented in my family by any stretch. But I
think the money talks the appeal of getting into a career,
and I guess doing the applying the same discipline or
training or constant improvement in my career was something that
I chose to focus on instead.
Speaker 2 (12:12):
Yeah, and I mean I guess you know, everybody can
get the head around the idea of getting rich or
getting wealthy, But it was money the driver, or was
it you know, what was driving you to sort of
go down that at that business path?
Speaker 1 (12:24):
Do you think it never has been money the driver?
And I still don't think it is now. I think
it was about, you know, seeing that you could no
different to sports or no different to so many other things,
that you could set a goal and be able to
control or try to corral a whole bunch of independent
(12:46):
resources to achieve a common outcome. And I think there's
that satisfaction in being able to.
Speaker 2 (12:54):
Do that put it all together.
Speaker 1 (12:55):
Yeah, And the outcome might happen to be that we're
in a commission. The outcome may be that someone gets
a fantastic result for selling their property. But the pathway
or the customer journey to get there is what really
excited me. Yeah, that's fascinating to think, isn't it to
sell one property? How many touch points, how many resources?
(13:16):
How many things have to go right?
Speaker 2 (13:19):
Yeah for that and the right order and yeah yeah,
and and and I guess things that can go wrong,
but yeah, yeah, yeah, and so did you? Did you
start selling as soon as you could? And I mean
you become a qualified real estate agents soon as you
got out.
Speaker 1 (13:34):
Yeah, so back in those days, once you had your degree, yep,
that gave you the ability to sell real estate. We
was pre the days of the of the r A.
So had the degree and went into project sales and
marketing with Bailey. So transferred that research peace into into
sales and marketing, and we were working on some phenomenal
(13:56):
properties back in those days.
Speaker 3 (13:58):
Yeah.
Speaker 1 (13:58):
I think you got to think two thousand three, two
thousand and four, it's a huge rush on coastal property
dealing with some of the New Zealand's wealthiest people on
sites and Breamtail and mung Afi.
Speaker 2 (14:10):
Or yeah, and international money sort of came in around
then too, right because the post Lord of the Rings
New Zealand sort of started humming.
Speaker 1 (14:16):
Team New Zealand around that time. Absolutely spot on and
that was fun. It was again for a young guy
into that. It was probably a little bit surreal to
see some of that we're talking about money. To see
some of that wealth was mind blowing and I think
that that might have been part of the inspiration to
try and push a bit harder and work a bit
(14:37):
harder to see it one day.
Speaker 3 (14:39):
Yeah, sure, sort of be up at those levels.
Speaker 2 (14:49):
Did you focus on getting your own property earlier? You're
not one of those. You know, we have the stories
in the Herald every now and then, you know the
kid who's got their first house together at nineteen or
something like that.
Speaker 3 (15:00):
It wasn't quite nineteen, but it was definitely a goal
of mine.
Speaker 1 (15:03):
In fact, my first home was up in Fungday, so
as I said, born and bred up north, and it
was an opportunity through work that had taken me to
have a lot of interest up in Fungday and I
bought my first home for around about I think it
was three hundred and twenty seven thousand dollars. Well, yeah,
in two thousand and five, I want to say, and
(15:26):
you know, it seems mind blowing to think of those
numbers now with where medium house prices are and what's
going on.
Speaker 2 (15:32):
Yeah, I mean, I'm old enough to remember when four
hundred thousand suddenly it seemed like a big amount for
an Auckland house. That's like I remember living in a
house on Williams and Avene Pontsanbe gray Lin and hearing
that the place I was living in was worth four
hundred thousand and thinking, gee, it's probably worth ten times.
It's probably with four million.
Speaker 1 (15:52):
Now keep in mind also, Liam, that you know, two
thousand and five, I was probably paying close to nine percent.
Speaker 2 (15:59):
Yeah, that was rough, right until the GFC kind of
pulled the carpet out, and then it was rough for
other reasons.
Speaker 1 (16:04):
That's right, And I'm hearing rates now, you know, stabilizing.
I think some of the main banks got rates around
six percent for long term money at the moment, and
I think we probably have to adjust our expectations on
what sustainable interest rates are in terms of supporting that market.
Speaker 2 (16:19):
Yeah, yeah, absolutely, So how did you go through the
GFC then, because you would have been, you know, all
go and then there was a big crash in two
thousand and seven eight nine.
Speaker 1 (16:28):
So through more good luck than good management, I happen
to sell a business interest I had in a Bailey's
franchise in two thousand and seven, right, and got a
one way ticket to d BAI.
Speaker 3 (16:43):
Yeah.
Speaker 2 (16:43):
So, just to jump back a little bit, you already
had a stake in a franchise pretty early on, that's right. Yeah,
I was when I was talking about that interest back
and fun at eight yep. I was fortunate enough to
have a forty five percent share yep of Bailey's in
the North. I was twenty three at the time, which
there must be It's got to be some sort of record.
Speaker 3 (17:06):
Yeah, I'm not sure that.
Speaker 1 (17:11):
So no, through as I say, more good luck than
good management, my business partner and I saw a different future.
And I remember speaking with John Bailey jb our chairman,
and I love the company. I've obviously worked here literally
since the day I left school. I wouldn't mind hitting
(17:33):
overseas for twelve months just to MYI most people do
it before that they start their career, and yeah, so
fortunate for me. I was actually in Dubai when the
GFC had.
Speaker 2 (17:45):
Yeah, and I guess that was a little bit buffer
that was that was sort of booming right through to
something extent.
Speaker 1 (17:49):
Absolutely spot on, and Dubai changed a lot on the
back of the GFC because it was different money that
came in afterwards. But as you say, because of the
diversity of people there where the wealth was coming from
all over the literally all over the world, it sustained
(18:10):
a pretty good momentum through that eighth nine period and
ended up being a great place to grow your career.
Speaker 2 (18:16):
Yeah, so you were selling property there as well.
Speaker 1 (18:20):
Actually went on the development side for a look under
the hood to see what the development world was like.
I was an incredible sort of random story on maybe
not so much money talks, but I was in.
Speaker 3 (18:34):
One of my projects was in Syria. Wow. And back
in those days, we had the BlackBerry.
Speaker 1 (18:42):
And they had an app on their equity sos And
one day this thing starts beeping and it turns out
that our sales center was quite liked by the rebels
who were looking to attack Damascus. Wow. And they turned
up one day and took over our sales center. So
part of my real estate career, of part of my
job was to help relocate about a dozen or so
(19:05):
families from Syria into other parts of the Middle East.
Speaker 3 (19:09):
Wow, yeah, highakes stuff the spring and twenty eleven.
Speaker 2 (19:13):
Yeah, so you were there. You're obviously there for a while.
Speaker 1 (19:16):
In the end ended up Yeah, my twelve month oughe
lasted about five and a half years. I always stayed
in touch with the family, the Bailey family back here,
but I think that that career opportunity and the scale
of what the Middle East offered was something that I
was really appealing to me. And it was one of
(19:38):
those things that I never ever planned for. You never
ever said you'd be here for that long or or
do that, But as the opportunities presented themselves, it was
the right thing for us to to stay and make
the most of them.
Speaker 3 (19:51):
Yeah.
Speaker 2 (19:51):
Yeah, and you so you came back to around twenty
twelve or.
Speaker 3 (19:55):
So, were with about six years. So twenty fifteen, twenty fifteen,
we came back.
Speaker 1 (20:00):
My wife and I we got married in New Zealand.
But while we were away, my daughter was actually born
in the American hospital in Dubai in twenty thirteen.
Speaker 3 (20:09):
So yeah, we had huge life changing experience in Middle Least.
Speaker 2 (20:14):
So it was a little bit that lifestyle that you
missed coming back to New Zealand looking for the Kiwi life.
Speaker 3 (20:19):
Absolutely spot on.
Speaker 1 (20:20):
You know, we talk about it a lot around you know,
it's getting in the boat, it's going to spend time
with family, it's the I think there's something really special
about that New Zealand lifestyle that ultimately we all has
been as much time as we can on a beachure
on a boat or and that was a huge appeal
for us.
Speaker 3 (20:39):
Yeah.
Speaker 2 (20:39):
Yeah, Okay, before I ask you a few of our
quick fire questions, I'm keen to dig a bit more
into the whole the property thing, because you know, it
is a fascinating topic, and it is in a way
it is a kind of a national obsession. Maybe after
rugby it might be the biggest national obsession. You talked
about trying to get those home ownership numbers up, you
know other things when you look at it, I guess
(21:00):
I'm thinking about tips or advice for the way people
should approach getting on the property ladder and also some
of the pitfalls to watch out for.
Speaker 1 (21:09):
Yeah, it's something we obviously get asked a lot, and
I go back to that confidence and that momentum piece.
I think we can all get lost in the noise
over what a Rhyan's index has done over one month,
for particularly what our price is doing hovering around plus
two minus two percent here or there. I think the
(21:31):
biggest tip for buyers is what can you afford? Have
a really sensible look at a long term rate, five
year money. What can you afford to which will set
yourself up for not only your own future, but literally
generations to come. And then when you're comfortable at that level,
make the decision. Be confident because you're not there to
(21:53):
buy and sell in a twelve month real estate cycle
that might drop from where we are today by two percent.
I'll ultimately you would have gained more by the money
you've saved from not paying rent or the pride you
take in your property, and therefore you look after things
a bit better and make smarter decisions around your career
and your family and things like that. So the biggest
(22:16):
tip is going, let's let's get out of this kind
of short termism. We're not a liquid stock market, we're
not a tradable stock We're buying for generations. And if
you think that way, and particularly where we are right now,
no one can ever tell you if we're at the
bottom or near or whatever. Anyone who says they can
is making that up. But what we can say is
(22:37):
there is going to be great opportunity as the interest rate,
the main driver of value comes back in the next
six to nine months, that it's only going to see
that investment get more and more valuable as you set up. Yeah,
so be confident, but maybe make some tough decisions.
Speaker 3 (22:53):
You know.
Speaker 1 (22:53):
I'm not going to sit here and preach and have
a cardo on toast, but I think sometimes we just
have to say, what are the sacrifice is that we
can make now that in five or ten years time
we can bear the rewards of we can be enjoying
to then go and by the sparple or extend the
room for the new edition and the family or whatever
(23:14):
those things may be.
Speaker 2 (23:15):
Yeah, yeah, I mean I guess that it goes to
the pitfalls as well. I mean, there are a few
horror stories that we're hearing, you know, like the people
saw the two point five percent interest rates is almost
as if they were normal, and they weren't right. So
so you know, again it's it's extending that time frame
and seeing what's realistic over many years rather than basically
(23:36):
what's happening right now, which we're all focused on.
Speaker 1 (23:39):
Correct And I use the word sustainable in the sense
of ongoing rather than necessarily green factors, but having that
sustainable look and you know, as I say it might
it might be really appealing to save fifty BIPs or
one hundred BIPs by going for that short term money,
but there's a reason why that's there. So so again
I would advise, what what can you afford knowing you
(24:01):
can that's sort of 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 yeah, you know, some sort of lotto windfall or
financial windfall. What is the bit that you can honestly
sit there and say I can afford this every two
weeks out of my mortgage.
Speaker 3 (24:22):
And once you do that, I don't think you'll ever
look back. Yeah.
Speaker 2 (24:25):
Sure, I mean people will always talk about the affordability
of houses and it's got really tough. And so you know,
does that when you look at it, does it mean
maybe moving around the country that kind of thing, because
Auckland is pretty daunting for a lot of people. I
guess unless you know, unless you're looking at other options,
so you've got choices around, maybe apartments, that kind of thing.
Speaker 3 (24:45):
Do you think. I'm probably more on the latter.
Speaker 1 (24:48):
I think the luxury of moving around the country isn't
there for everybody, particularly younger professionals starting up. There may
not be the depth of job market. So I think
looking with in the Auckland stock it's actually maybe looking
at those other opportunities. It may mean a slightly longer
commute and may mean needing to use some of the
(25:08):
public transport. Hopefully that eventually improves over the next few years.
But I think looking at those different typologies of homes
will give you some reach in Auckland and just again
getting in. It's not your forever home, it's not you
don't have to think, oh, I'm not going to be in.
It's fine, but start on the ladder to get things moving.
Speaker 2 (25:28):
Yeah, I guess there's a trap and looking at the
home that you want to end up and going oh,
that's just far too expensive. I can't imagine ef you're
getting there right, So you've got to get started.
Speaker 1 (25:39):
I think so, And I think about my own personal
situation as well. I don't think you should always going
to be wanting something different. And maybe the kids are
left home, maybe there's a new addition to the family.
All these things will naturally change what you'll look for
in a home. So don't try and second guess your
(25:59):
own self five years time. Yeah, I think as I say,
as long as you are as long as you can
afford it, and I mean to afford out of your
out of your current salary or your family income. That's
what we're looking for, not going, oh if this year
we do this in this Yeah, that's the pitfall. I
think we're gonnall stay clear.
Speaker 3 (26:16):
Well.
Speaker 2 (26:16):
One of one of the things I always think is,
you know, a marker of the very wealthy and the
people who are successful in business is actually acting. I mean,
you know, actually doing the thing. Because we spend a
lot of time talking about it and thinking about it,
but at some point you have to just get out
there and do it. I suppose is it to some people?
It might even be daunting just just the very process.
(26:38):
I mean, does Baileys and real estate agents sort of
open to just talking to people and get explaining how
the because the paperwork and all that sort of stuff
can be quite daunting.
Speaker 3 (26:49):
Of course it can.
Speaker 1 (26:49):
And as we said, it's the biggest decision that someone
will ever make in their life. So we like to
get alongside people early, and we sort of talk about
it as match fatter. I seem to have a lot
of sports references. But you know, we will take someone
along to an auction that the property they're not interested in,
but just to go and sit in the room and go, hey, hey,
(27:11):
this is what's happening.
Speaker 3 (27:12):
This is the vendor. The auctioneer now is calling for
an opening.
Speaker 1 (27:15):
But this is what that means, you know, this is
this is the process that that guy there, he's on
the phone to someone betting that they're watching online, and
these are the documents that they're going through to set
a reserve or to to maybe change terms for a
slightly little maybe a delay the deposit by two weeks
or subject to some other term. And as you do that,
(27:38):
more and more they gain confidence in the process, which
then means they're match fit to buy when their ideal
property is there. Yeah, and there's nothing worse than seeing
that property and not being ready, haven't spoken to the bank,
haven't got a valiation, haven't got your ducks in a row, because.
Speaker 2 (27:57):
You might it's going to take your two weeks or
something and you might miss it.
Speaker 3 (28:00):
That'spot on absolutely spot only.
Speaker 2 (28:08):
Let's move on to our quick fire questions. I know
you've you've you've listened to the podcast before, so it
won't be too surprising. But what's the poorest you've ever been?
A student at Massive University?
Speaker 1 (28:19):
Yeah, sitting in a five bedroom flat on Ada Street,
struggling to avoid forward baked beans from back and save
to get through the week.
Speaker 2 (28:27):
It is so often it's it's it is the experience.
But was it valuable to you? Do you think to
be that poor?
Speaker 1 (28:33):
Absolutely? Yeah, again, I think you appreciate the value of money.
I actually talk to someone about the value of money.
I actually worked in a student bar alongside Anni moobray
re billionaire, and you know, we both worked as hard
as each other to get that they'd be able to
afford that drink at the end of the week or
(28:53):
that cannon bake beans.
Speaker 3 (28:54):
So I think the value of being poor, or the
value of understanding money is hue. Yeah.
Speaker 2 (29:00):
Absolutely. On the flip side of that when you finally
got a bit of money together, had a few paychecks
in your pocket, was there something that you splashed out
on to sort of let yourself know that you made
it to a certain level.
Speaker 3 (29:14):
There's one confession that's a bit of a watch guy. Oh.
Speaker 1 (29:17):
Yes, when there's a nice significant milestone, I've tend to
have celebrated by buying a watch.
Speaker 3 (29:26):
So each watch will have a story behind And.
Speaker 2 (29:30):
I ask what you're wearing right now?
Speaker 3 (29:32):
Sure? This is the Cerolic sub Mariner. Yeah.
Speaker 1 (29:35):
I actually bought this when we moved back from Dubai
to New Zealand. So it was that point in my
life where I was decided to invest in one of these.
Speaker 2 (29:44):
Yeah, because you know it's a passion and it's a hobby,
but it's actually they are an investment, right, so in
some ways probably even compared to a car, is it.
Speaker 3 (29:53):
Yeah?
Speaker 1 (29:53):
I got another one for my fortieth from my wife
and she said, oh, maybe we should look at you
got enough watches, you know what I mean. I said, well,
let's come and give them. I'll give them service and
we'll actually get evaluation. And then after we left she said, well, okay, no,
you can definitely get another one. Because you make more
one off watches than you have off off a bunch
of other things.
Speaker 2 (30:12):
I guess it's much like you know, some people would
be out whatever, But yeah, it's very cool. Do you
still imagine winning lotto or do you buy lotto tickets?
Speaker 1 (30:22):
This is a little bit of a cidbar. Loto cracks
me out right now. People won't buy a ticket to
win six million dollars, but they will to thirty. I mean,
I don't understand that.
Speaker 3 (30:31):
And now you know, I do a lot of game
theory and then sometimes get driven down a rabbit hole
with it.
Speaker 1 (30:37):
But it's amazing to think that for that, you know,
that twenty four dollars ticket or whatever it is, someone's
happy with a thirty million dollars return, but they're not
happy with a six million dollar return.
Speaker 2 (30:47):
And there's still these minuscule odds regardless.
Speaker 1 (30:49):
Yeah, so no, I occasionally will buy a ticket when
it's a thirty million dollar jackpot, But no, I think
we've got to work hard and pretty more sustainable ways
to deliver that.
Speaker 2 (31:01):
Put your twenty backs a week and a fund for
correct you can afford deposit on the house. Yeah, we
touched on this earlier. Actually, but just how important money
is to you or is it more of a by
product of success? I mean, what drives you now?
Speaker 1 (31:17):
I still think it's particularly within our team, within our culture,
it's still the success of that transaction. I recently was
involved in a deal. It was a lease in christ
Church for a car company. The fee, by the time
(31:38):
it's split and divided up between the agents and the company,
the number would be absolutely nominal. But the excitement to
do that deal, to have a happy landlord and a
happy tenant was something that still drives me and our
team every day.
Speaker 2 (31:55):
I think it's something that's misunderstood by a lot of
New Zealanders when they look at wealthy and successes for people,
particularly in business, that they think it is just everyone
I've talked to it is it's almost always that the
doing the deal or doing the thing, making the thing happen.
And some people it's it's whatever, you know, climbing a mountain,
(32:15):
and some people it's business right.
Speaker 3 (32:17):
Well, it's it all comes back to the customer, you know.
Speaker 1 (32:20):
I think that for us, we don't have widgets, we
don't have a product we've but but seeing that seeing
someone give the keys to their new home or to
you know that someone that's been able to achieve some
financial freedom by selling an asset. Those things truly do
drive you to want to do it more and more.
Speaker 2 (32:38):
Yeah, look we're bumping up against time. The last sort
of question I have is kind of a big one,
and and it's it's that one about you know, when
you look at wealth and equality out there, people who
are just never going to afford a home. If we
could make your prime minister for a day, what's the
what's the policy, or what's the thing you'd like to
do most? That might might shift the dial there.
Speaker 1 (33:00):
I think you've got to take it back to real
estate because I am there and that's my game. We
need to build more homes right now. Obviously QUI bill
these days is a bit of a bad word. But
if we were able to deliver a successful key we build,
I think that will change more lives and deliver more
value for our country than anything else, whether whether you
(33:23):
own it or whether you rent it, or whether you
are unfortunate enough to be just living in there because
that's your accommodation. I think there's real pride in having
your own place to call home. People work harder on
community they work harder to send their kids to school
and get educated. They feel a belonging to be a
(33:44):
part of something bigger than themselves. So if you could
waive that magic wand and deliver that policy, I think
that would change New Zealand for the better.
Speaker 2 (33:53):
I mean, do you think there's a way to get
You know, we've seen some progress in the last year
or so on affordability, but the risk is, you know,
you don't want a dead market. It's no good for anyone.
Is there a way to sort of keep house prices
sort of relatively subdued so that affordability comes back, but
without without you know, from your guys perspective, you want
(34:15):
you need to turn over and you need need people
to be confident about the market, right I do.
Speaker 3 (34:20):
And Housing Minister, Honorable Bishop and co.
Speaker 1 (34:23):
Might disagree with me on this, but I think supply
is just one hundred percent the key in that affordable bracket.
Speaker 3 (34:31):
Yeah. I don't think it's going to change the pricing
over here.
Speaker 2 (34:35):
Yeah for for a villa and pons Bill and we
in New.
Speaker 1 (34:38):
Zealand very quick to talk about I mean, I'm in
the game, so I get asked the question a dozen
times a day, how's the market?
Speaker 3 (34:44):
Yeah, which market are you talking about? Yeah?
Speaker 1 (34:47):
Because I think the three or four million dollar home
and rimy era has a different answer than the nine
hundred thousand dollars unit at Hobsonville. Yeah, it has a
different answer to a apartment in the CBD. So I think,
just by increasing supply in an affordable market, is it
necessarily going to skew the entire New Genumy State market? Yeah,
(35:10):
but it will create more opportunities for people.
Speaker 3 (35:13):
To own their own homes.
Speaker 2 (35:14):
And it does feel like maybe that with you know,
signs of progress perhaps so that we could get something
rolling with.
Speaker 1 (35:21):
I think there's a whole other podcast there on that.
But look, the macro economics are right. Land has come off,
building costs have come off, interest rates are trending down.
Speaker 3 (35:35):
So if there's a time to buy land and build houses,
it's now.
Speaker 1 (35:38):
Yeah, you know, it's got to be a time where
we invest in again, as I said before, stop thinking
in these quarterly or these twelve monthly cycles.
Speaker 3 (35:48):
We need to get a long term vision on delivering supply.
Speaker 2 (35:52):
And that does come back to some of that long
term thinking. So then, how do you feel about you know,
all the debate about on that demand side, you know, taxing,
capital gains tax, you know, all the things that people
sort of see as ways to sort of, I guess,
subdue the market demand.
Speaker 3 (36:10):
Yeah, I guess.
Speaker 1 (36:11):
I guess we're tax will deal with demand. I think,
you know, obviously we're obviously we're talking increasing supplies the
other way. I'm not against seeing taxes around real estate.
I don't know that capital gains tax is the right
way to go about it. We can look across the
ditch at our colleagues in Australia. Obviously there is a
stamp duty there, there is a foreign buyers tax there.
(36:34):
These are things that have been debated around the last
election cycle, and I do think there is an opportunity there,
and particularly if we can ring fence that and see
that going into housing supply. Yeah, perhaps a stamp duty
isn't a bad thing for us to look at introducing
over time.
Speaker 2 (36:53):
Sure, that's brilliant. Lloyd, going to leave it there. Thank
you very much for talking.
Speaker 3 (36:57):
Thank you, Lim appreciate it. Cheers.
Speaker 2 (37:00):
Thanks for listening to this episode of Money Talks. If
you want to get in touch, drop me a line
Liam dot Dan at zed me dot co dot nz
and you can read more from me at inzidherld dot
co dot nz. Thanks to my producer Ethan Sills and
sound engineer Lianne mac donald. Follow Money Talks on iHeartRadio
(37:21):
or wherever you get your podcasts, with new episodes available
every Thursday
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