Ah só, the old recognising revenue on a straight line basis trick eh
Printable View
10 days into 2023 and the tangled web of OCA's accounts remain no.1 ST topic......:sleep:
In light of timing, deferred income, depreciation, increases/decreases in property values, don't you just look at the cash? (Don't shoot me, I'm not an accountant)
Attachment 14412Attachment 14413
Sorry... I still have no idea of what you are talking about.
Instead of being a cry baby, why not just stay on topic.
Still under the disclaimer of understanding very little. Can you tell me under operating cashflow we have $214,188 "Receipts from new occupation right agreement" and $(69,998)Payments for outgoing occupation rights. These include both the Repayable portion and the Deferred Management Fee. Wouldn't the repayable portion be better shown under "Cashflow from Financing" I guess ultimately once receipts and payments are netted off you have the deferred mgmt fee but the operating cashflow looks overstated by the repayable portion, which is not actually income to OCA.
I am unsure I even have that right. My understanding is the right to occupy is sold and on the death/departure of the tenant a 20-30% mgmt fee is charged with the remaining 70-80% paid to the tenant or their estate. The value of the right to occupy does not change but if property prices are going gang busters like they have been then retirement villages are on a winner.
If tenants live a long time then the deferred mgmt fee may not be as profitable.
What does OCA charge for its deferred mgmt fee?
Doesn't make any difference. It's all about the markets, not OCA.
OCA is not a "Glamour" stock. Not on the radar. So the numbers don't matter. When the market picks up (death of Labour) OCA will pick up. But not before. Bless you guys for your financial analysis but it doesn't make any difference.
Peter - this is 100% incorrect as SL says. SL has pointed you to the notes which contain the answer. If you want details on where you have gone wrong, then read on.
That is incorrect. Yes it is a somewhat akin to rent, but the majority of DMF is not charged when the tenant dies. DMF is charged from when the tenant moves in. Total DMF is 30% assuming no early departure, and is charged over 3 years. ILU's and apartments are 10% p.a., whereas care suites are 15% in year 1, 10% in year 2 and 5% in year 3. So for ILUs and apartments, on average there is no charging of DMF when the tenant dies - on average that was completed some years ago.
That is incorrect. 'Tenure' in your quote relates to the time until the tenant dies given that is what preceded that part of the comment outside of the statement in the brackets. For OCA average tenure in ILUs was historically 7 years, apartments 5 years and care suites was less than 3 years. Average term for charging DMF is almost 3 years. Client tenure is completely independent of the profile for charging DMF.
That is incorrect. The DMF is charged to the client as noted above but held on the Balance Sheet, for now. That value is released to the P&L monthly on a straight line basis over the expected tenure of the client (being 3, 5 and 7 years for c/s, apartments and ILUs). So we have revenue from the DMF appearing in the P&L during the first 2 years, in addition to the various weekly charges etc. There is no loss per se.
This is also incorrect. The DMF is eventually deducted from the ORA payment made by the client when they purchased the c/suite, apartment or ILU. The client has already paid for the DMF via their ORA payment when they moved in. The money for the ORA is in the OCA bank account from day 1. Also, the DMF charged is not a loan on the books - the ORA is a loan on the books. The DMF charged to the client is actually a deduction from the ORA loan, so it is actually a negative loan for want of a better phrase. They call this 'Management Fee Receivable' in the AR under the notes for ORA liabilities.
Apologies for accounting speak bit it is (simplistically) a 4 step process:
1) Money in the bank upon sale: debit cash, credit ORA Loan (say $1m)
2) DMF is charged to the client over 3 years: debit ORA Mgmt Fee Receivable (the 'negative ORA loan'), credit Deferred Mgmt Fees on Balance Sheet (this is like income in advance that sits on credit side of the Balance Sheet) say $300k
3) DMF is released to the P&L monthly (typically over 3, 5 or 7 years): debit DMF on Balance Sheet, credit DMF Revenue in the P&L.
4) Client departs and ORA is paid out less the ORA Mgmt Fee Receivable: debit ORA Loan $1m, credit ORA Mgmt Fee Receivable $300k, credit bank $700k (assuming weekly fees are paid and not added to the tab - but here I am trying to illustrate the impact of DMF on the ORA payout & P&L).
For a single unit with an ORA of $1m where the client has departed, OCA have $300k in the bank and $300k in retained profits.
Note that in the cashflow report step 4 is compressed to $700k under the title 'ORA payments'. I believe OCA could help themselves by separately disclosing both components of $1m liability extinguished, but $300k was retained. IMO the $1m in and out are financing cash flows, the $300k retained is an operating cash inflow.
Incorrect for the reasons outlined above. DMFs have been received and fully taken to the P&L for clients that have since departed, versus DMF has been received in cash via the ORA but not yet fully taken to the P&L for resident clients as explained above.
Not correct either. First up there is no loss. Secondly, building and selling apartments results in realised development margins. These will be lost if there are no new builds. New builds hurt cashflows, not the P&L.
Lots of critics howl so I guess we can agree on this point.
Building something is an investment but the comments about the tenant being alive hence no DMF received is not correct as outlined above.
Makes sense?
I have left in depreciation, as I suspect it may be a allowable deductible expense - for tax purposes.
I may be wrong, but consider the Rest Home operation to be a commercial business operation.
I haven't researched as to deductibility - ie commercial buildings for which deduction was once again possibily
allowed V Residential rental properties for which depreciation in most cases deductibility went out the window on/around 2011
Yes, I think it is allowable deductible expense for tax purpose. I am more thinking about from evaluating the business point of view, depreciation of buildings seems like unrealized loss similar to capital gain (unrealized gain), thus I wonder if they should both be ignore if we want to look at the real profit/loss. The loss probably get cancelled out by capital gain in the long run? However, looking at it again I realize the depreciation of buildings is actually a small part of the depreciation loss, and other depreciations are likely to be real (e.g. they have to replace the chattels etc). So probably doesn't make much of a difference.
Also I wonder why care suites depreciation is so high (and included separately) but not other units?
Here's what Warren Buffet said about depreciation :
"Not thinking of depreciation as an expense is crazy. I can think of a few businesses where one could ignore depreciation charges, but not many. Even with our gas pipelines, depreciation is real — you have to maintain them and eventually they become worthless (though this may be 100 years).
It [depreciation] is reverse float — you lay out money before you get cash. Any management that doesn’t regards depreciation as an expense is living in a dream world, but they’re encouraged to do so by bankers. Many times, this comes close to a flim flam game.
People want to send me books with EBITDA and I say fine, as long as you pay cap ex. There are very few businesses that can spend a lot less than depreciation and maintain the health of the business.
This is nonsense. It couldn’t be worse. But a whole generation of investors have been taught this. It’s not a non-cash expense — it’s a cash expense but you spend it first. It’s a delayed recording of a cash expense.
We at Berkshire are going to spend more this year on cap ex than we depreciate."
Thanks for taking the time to give a good clear working example there Ferg.
Just waiting for the snow leopard to come out of his cave and see if you get a tick (lick) or a swipe from his paw! Lol
Thanks Ferg helpful and educational posts.
Yep well and good, but as with statistics, a lot of comments can be slanted to assert a biased agenda.
OCA revalues its assets each year, up or down, and the resultant increase or loss is attributed to earnings. I believe thats the case. Correct me if I am wrong. Tax depreciation is based on historical cost, and amortised to tax profit or loss. It is only when a development is sold, that the difference between the holding values, and the tax holding values get closer together. So in theory, there is an amount in a provision for deferred income taxation that is sitting there until sold.
So I think Warren Buffet's comment has been taken out of context. Depreciation can be based on many different values, ie Tax depreciation rates, financial depreciation rates of some sort, true value depreciation rates, or revaluation depreciation rates. Generally, Pland, Machinery, vehicles differ in depreciation policy than Buildings and property.
Cheers for a very patient and thorough explanation. Yes, I am sure this does make a lot of sense for accountants ... and I consider myself corrected!
I recon my mistake was to see the transaction from the other side (the resident) who just gives an interest free loan to OCA and receives later the principal back (obviously minus DMF) without considering all the black magic accounting is doing to the books.
Correct as well that the 3 years I used in the example are only applicable for the care suites. I was lazy not to mention that the DMF rules (and the average mortality) for ILU's and apartments are different. Having said that - it was just an example, and as far as I recall are they (the care suites) the main business of OCA (as beagle always used to remind us) :) ;
I do want to wade in at this point and firstly compliment Ferg on a very solid set of posts how some of the nuts and bolts work. Great job.
Secondly I must compliment BP on his mature acceptance of having his assumptions corrected without any of the usual pissing competition nonsense that would normally break out on these forums.
Really good to see the sharing of this info between some very good posters here.
Now to add something new with the DMF stuff squared away.
NZTX threw out the " rhetorical " question about any FY profit predictions.
This 2nd half is impossible to be accurate. Care, DMFs and even resales are trucking predictably and nicely.
It's the new sale's that are the problem child.
SUM result yesterday sheds no light ( I was hoping it would) as they should have completed about 380 and only sold 129( they usually have good presales with their villas) so maybe they are apartments that dont presell well, maybe they are care suits, same thing...or maybe the new sales are just dire. I just dont know from their announcement.
Next thing is OCA are sitting on a gold mine with solid presales of the soon the be delivered Helier. Will any appear this FY, I suspect not but just maybe some will.
Plus how will the extra care funding AND pay parity materialize.
So lots of substantial unknowns. My range of profit expectations for 23FY is up at worst 8% and at best 20%.
Both estimates dont include any Helier sales.
It is also pleasing to see OCA finally start to break out from its usual shadowing of the ARV shareprice. ( ie , they are treated like twins but they at very different chapters of development) .Good to see buyers reemerging and the selling of the last 14 months dry up. I suspect the analysts are now factoring in some pretty good news coming OCAs way shortly.
I'm away from my stuff and just posting from my crappy phone so I appoligize in advance for any bad grammar or spell check things.
totally agree ( under normal times numbers matter but we are not in normal times value investing is still not in vogue ) and hence why my theory on covid deaths to retirement stock relationship has proven the best method to play these stocks.
as my previous charts showed on this thread the relationship is strong with a 82% r factor and just recently the slow down in covid wave has lead to the temporary fall in stock prices right on que again.
On the re-sale figure's rising ( as i alluded to with my boiled cabbage joke ) this has proved correct. i continue to see perhaps even re-sales becoming the dominant sales factor in these stocks as covid evolves and takes its toll
( obviously the plan all along lol was to rid the world of old people to solve the world pension problem ) these stocks benefit from re-sales in this regard.
but in conclusion why the resales help it does not replace the fact property market direction and rising build costs outweigh this hence why stock prices wont recover till property market does.
Thanks for that analysis Mav, and I share your appreciation for Ferg's hard work and BP's response. I am not only learning a lot, but also enjoying the tone of the thread.
The Sector must have been one of the more profitable in 2022, based on the lavish reports issued
It also clocked up (I'm guessing) the most Tax losses of any of the sectors
and with that pulled off another prize - paid next to No Tax on those results
How long will the partying continue on those terms ? :)
Mav says 'It's the new sale's that are the problem child.'
Yep, a problem child and a real mystery
I'm not really on top of understanding which villages have had the new sales over the years - this probably is the story behind these new sales numbers which are pretty horrendous in the contest of the all the things they say in reports and presentations
For 12 months (2 half years) to November 2020 they had 250 new sales. The number had been grown from 50 as at November 2017
Roll on a couple of years for the 12 months to September 2022 they had 144 new sales
144 new sales is a long way down from 250 eh - and as Mav implies is the main reason why underlying earnings have been disappointing (not grown much)
As Mav says 'new sales a problem child ' - hope they are getting on top of it sooner than later.
Yeah, thank you everyone for the useful information, especially BP for replying to my question in the first place 🙂.
My feeling downtrend flattening out aand getting ready for more positive share price movements (yep, that random gibberish remark) might have been a good observation last week
Last week been pretty good ... holding over 80 and even reaching 82 at times
Looking good
Dump OCA and buy Auckland Airport. It's up 15 cents a share right now.
Phew, thought the world was off-kilter there for a while.
Just 3 days without an OCA post.....:mellow:
OCA appears to be on an uptrend now.
Hopefully it's onwards and upwards from now on.
Hopefully, increasing 1c a day
OCA thread is either quite or fireworks ...nothing in between ...lol
Hopefully W69 will say something encouraging soon ...I understand he thinks downtrend is getting over ...it's surely consolidating ...after that up or down ?
Curious fact that one of the most active threads on Sharetrader goes strangely silent when the on-market activity starts to show signs of incremental price increase. Will today confirm the much-anticipated uptrend?
Fair enough Ronaldson, Thought it was about time to say g'day. Basically I'm procrastinating today on other stuff I don't want to do.
It's very pleasing to see that OCA SP might have reached bottom after a brutal and relentless 15 months.
Ive been observing the SP seems to inversely track US10yr treasury / NZ 10yr bond graphs which are now suggesting we are past global inflation peaks. I figure these 2 measures are driving the global funds aversion ( ie selling) to all things property. Those peaks coincided the same time when OCA was 76c. This, coupled with a sharp drop off in turnover also at the same time, also suggests the offshore sellers are now packed up and gone. After watching RYM get some massive love out of nowhere this week it is looking like the tide against the whole retirement village sector has turned.
I am not a chartist by any stretch, I'll leave that to Baabaa and others, but even I can see sentiment has changed, as it was always going to at some point.
The other pleasing thing of note is that OCA`s SP has broken away from parroting and trailing ARV, % wise.
As of 2 weeks ago OCA has risen nicely ahead of ARV which is highly unusual as the markets have always treated these companies as twins. I certainly disagree with that idea as they are quite different models and offerings of which the market has possibly not recognized until now. This is not to disparage ARV but to me it suggests OCA is now receiving more scrutiny on its own unique merits. Particularly at this point in time of its development.
-Lately care suites are really coming into their own with successful market acceptance. ( IMO the running down of regular rest homes leaving nowhere else for those in need to go has played into OCAs hands) OCA has 972 care suites while ARV has 114.
-Then of course OCA has the Helier pre-selling down nicely at some eye watering prices. I note they changed their wording 1hy23 that deliveries will now be both this FY23 AND early FY24 . So slightly behind plan, but considering the year it's been ….. no biggie.
Where does this leave the math? ….Well the biggest question is new sales, what will they be?
FY22 they sold 92 new apartments . They should have sold even more than that this FY23 given their high available new stock but as we know first half sales were BAD, only 28.
After reading SUM sales were poor NOV and DEC, I have allowed for 65 sales FY23.
I have not allowed for any Helier or Windermere-Christchurch new sales being banked this FY23. ( it's always a possibility)
I get 4.95c EPS this 2HY23. To compare that to last 3 HY periods …3.9…4.15…3.9
So based on my expectations Mr Market is currently affording a PE of 8.6 at 85c. It is my expectation the company's annual profit will grow 10% YOY.
With the turbo boost of Helier and CHCH happening just around the corner 1HY24 and with the unfreezing of awful sentiment to the sector ( ie. RYM and SUM regaining some love) it is very difficult to not see MUCH happier days just ahead for OCA.
As a long term investor in OCA`s projects and model, the whiplash of the share price, despite clinging to the fundamentals of the company has still been most difficult. The market says each day what an awful company this is……The market is right , it is always right …but just like the last 3 years... Just you watch it change its mind yet again.
Good comments Maverick. And OCA has indeed closed today well bid at 87c, up from the low of 76c just 4 weeks ago, which is a significant increment in % terms. But ARV even better today, up 4c to $1.18. So the whole sector is benefitting from a change in sentiment and a generally oversold circumstance. I think the opportunity to enter really cheaply is quickly receding, and we may even see FOMO in play again before too long as folk start to reassess.
I know the property market has well and truly gone off the boil but the desire for security, the need for aged care services, and the availability of social facilities and amenities among a peer group, is well proven in this country as a powerful attractant for over 70's. And the current demographic tail wind is compelling and simply can't be "switched off ". Not to mention actually replicating the existing built environment of the NZX listed entities at current labour and materials costs would probably make a mockery of valuations attributed for the purpose of their financial statements.
An incoming tide waits for no one. So top up while it is still reasonable to do so.
OCA low was 72c on 20/12/22, so at 87c it's up 20.82% from that, a nice gain for anyone who got some. Still down a whopping 45% from the SP high, and 35% discount to NTA.
Technically OCA has made a potentially very significant breakout -up- through a very nasty long term down channel since the high back in August 2021 (!) .. no wonder it seems so long, because it has been. OCA is currently tapping on a minor price resistance at 87c but the basic indicators are now in oversold territory, so unless that FOMO you speak of kicks in, expect some profit taking from the savvy traders amongst us.
I'm still yet to breakeven on OCA.
Bought in Apr last year above $1 and again in May at 0.99
Bought more luckily at 0.73 in Dec at only 1c above its recent lows, bringing my average now down to 0.89, and I can't wait for it to breakeven. This is quite a volatile stock and I'm considering whether to just recover my losses, should the price rise to my breakeven point. If interest rates rise again in Feb, I suspect the sentiment will turn negative again for the whole sector ?
Winner called it, came on
here to say. Well done mate.
The best part about Winners call is when peat said it was gibberish lol
I was only joking about " Blowing your own trumpet " part but like always people see what they want to see ...well done mates :t_up:
Those bloated NTA values recorded on NZX across the sector certainly appear to be attracting
the punters in .. hopefully a few wild swings in Hipkins & Robbo's doctored goldfish bowl
of clueless uncertainty dont also turn around and deliver a dumping on all ;)
Steady progress to 89c today, which is well past Bull's breakout figure of 85c suggested earlier in the week. So all good for current holders.
Why ? .. they could easily deflate faster than a Leader's support in the right or wrong economic winds ;)
I didn't mention rising interest costs, staffing, other operating costs, slowing revaluations, staffing issues
and unfavourable political winds, changing demand for units etc .. which also may come into play :)
Let's face it -- the market aint exactly stupid if it's already factoring the extra yards between NTA
and SP with a cautious eye and wouldn't be without good reason :)
Why are you complaining if the noted differences are attracting a bit of buying attention ? ;)
I am going to borrow & doctor a clause from Recast's look at another Company:
"There is no doubt that capitalised REVALUATION income is not of the same quality as regular Retirement Care income."
:)
yes nice breakup for the whole sector which i put down too hipkins comments around property market and immigration reversing sentiment rather quickly towards the sector
but i stick to what i said oversold bounce or genuine buying only time will tell.
if its a oversold bounce might get a continuation next week before consolidation if its a genuine buying opp guess prices are still cheap for them all.
people need to decide which camp they are in , we will all know in time which camp was right.
The trend reversal does appear to be in. Approaching the 200ma and the weekly RSI is above 50. Fist time since about September 2021.
A bit of a retrace back up to where it was in mid Oct 22
From here - will it resume the back downhill slide or continue climbing to recover more lost ground ?
2 years ago at this time 2021 - $1.58
1 year ago at this time 2022 - $1.14
Past trend in each of 2 preceding years at this time is retreating
Oversold ? Under valued ? or sector previously well out favour hence slide ?
2021 FY Div 3.4c V 2021 FY Div 3.5c Reduction 0.1c
2022 FY Div 3.4c V 2021 FY Div 3.4c No change
2023 Int Div 1.9c V 2022 Int Div 2.1c Reduction 0.2c
No Imputation credits on any dividends
The answer to that could be net realisable value of the properties on the market, if a buyer can be found
possibly at fire sale levels - again dependent on what the market says
The market that is NZX with SP values isn't silly and may well be factoring in the forward risks,
as with the sector as well
Any better ideas ? :)
That's twice you've said that lately , you're respect for Mr NZX is worth reconsidering.
If your good mate said OCA was worth $1.30, 3 months later $0.38 , then not much later you`re both back at the pub and he says its worth $1.59....then at a Christmas catchup he says its $75c ....
Surely you'd say to him he is very silly indeed and to keep his nonsense opinions to himself.
It is most fortunate for us that Mr NZX is even sillier than we are.
Yes....yes I am calling the sellers very silly.
https://getyarn.io/yarn-clip/2e8f58c...4-1b66d50460fe
https://cmfg.co.uk/wp-content/upload...gotiations.jpg
Sorry, can never resist it :p
Its okay... OCA shareholders can continue selling their shares to me at silly prices.
You make with the loaded question above a number of wrong assumptions. Take an example: If you have a pub brawl with people beating each other up for no good reason, you can safely assume that a number of these "warriors" are intoxicated and behaving silly, but this does not mean all of them are. Same with the markets (no matter which stock exchange).
Just for clarity - I am not implying that most market participants are intoxicated, but there are many market situations where a material number of them behaves that way.
I assume you are aware of the formula Share Price = fundamental value + hype.
The silliness of markets comes from the hype component.
Have a look at securities without underlying value (like e.g. crypto currencies or NFT's) to better understand the impact of the hype component. You can observe otherwise seemingly reasonable people buying absolutely worthless securities for increasing amounts of money, just because they trust the bigger fool theory (or more likely because their reptile brain tells them that something which goes up always needs to keep going up - linear extrapolation) or because they fear to miss out.
These people might not be silly, but they do behave silly.
Obviously - this observation is strongest when your security has no underlying value, but it is as well observable for any stock where hype is just a part of the share price ... like e.g. OCA.
There was a time a couple of years ago where fear (one of the factors impacting on hype) brought the share price down to less than 40 cents, and short after that hype turned around (from negative to positive - FOMO) and the share price went up to $1.60 or so.
Absolutely silly behaviour, given that the underlying value of the investment didn't change during that time.
So - yes - markets (including he NZX) tend to behave silly, even if this does not mean that all market participants are silly. It is enough if a material number of market participants behave silly, as they do.
If you want to be successful as investor, you better learn to embrace this particular attribute of markets and learn how to exploit it.
Ah yes - and for your statement on "collective reasoning" above - behavioral sciences use for this the term "group think". Check this out, and you might find that this is clearly not a behaviour which should inspire confidence.
It's an ok formula, but perhaps not fully reflective of the real world? Let's refine it just a little....
Share Price = Fundamental value (+) Hype (-) Down-ramping.
in regards to market participants' 'silliness', it will operate in the sandpits where both the hyping and down-ramping crowds reside. ;)
but dissecting the nuts & bolts of the financials wasn't downramping .. it had already long hit the bottom
before that happened, along with the rest of the sector :)
The figures and how parts of them have been treated don't lie :)
Perhaps someone will blame one of the more obscure of Political parties next for what the Sector & OCA have traversed in SP movements to lower levels than seen earlier in the 2 years .. ;)
Obviously when share prices were going up in preceeding 2 years to most recent two, there wasn't a complaint, scream or whisper from some quarters :)
Hit .90 today. Definitely on the comeback.
Haha - mmmm. What actually is 'Fundamental Value'?
In terms of a formula: Fundamental Value = Share Price +/- market sentiment ?
Yes the buyer and the seller may have a different view on what it is, and yes sentiment will have a bearing on that view. But remember....those differing views don't necessarily preclude them from coming to agreement on PRICE.
It seems to me that if anything is illusory, then it it would be the market sentiment. Positive/negative sentiment can evaporate as quickly, or slowly, as it was created.
You're all wrong.
They're not silly, they are downright moronic.
I am presonally loving the oppertunity to transact with them and buy the better part of a billion dollar free loan for cents on the dollar and grab some of Miss Coutts hard cash for cents on her dollar, not to mention most of you as well (thanks).
Another place you're almost all wrong and displaying moronic behaviour is wanting this oppertunity to pass. I.e. wishing for the share price to rise/the morons to wisen up.
Didn't know there was such thing as white.
Have had;
Plantation Multi Vintage - product of Peru
Various Appeltons including some 1994, 21 year, 12 year and normal.
Flor De Cana 25 year old
Kraken black spiced
Old Monk
El Dordo 21 year aged
Bumbu Original and XO
Havana Club spiced
Interestingly some of the more expensive ones were given to me by people I had got into ARLP in 2020 where the current dividend has just exceeded the cost price of the shares.
The Bumbu Original is my favourite and far from the most expensive at $100 a litre.
Havana is incredible too for the price.
Glad you spell checked that one FM
Ya just gotta have a retirement village operator that offers continued care as one’s health circumstances change.
https://i.stuff.co.nz/business/prope...ement-villages
https://i.stuff.co.nz/business/prope...ement-villages
Interesting article. I do love it when people sign up to something and then blame the other party when it doesn’t go their way. Just like that article posted the other week about the Nelson family that are blaming the bank for high interest rates.
It’s clear change is coming. Not sure what that will mean, but what FBU are doing looks good
I got my wife to read that article to double check own reaction to it. She`s far , far more empathetic than I. But even she came to the same conclusion...what a dumb /misleading article.
The first lady has effectively paid $5k DMF fee for each year ( and reducing as she lives another year) to live in a gated community, presumably with a social calendar and with zero maintenance costs (saving a fortune over 20 years). Her financial advisor at the time of signing recommended she keep investing elsewhere as she aged which she obviously chose not to. Now she is grumpy and wants things sorted .....retrospectively!
Next poor soul is moaning basically because she bought a $2m unit which she now wishes she had bought the $1m one. She knew she had 90 days to withdraw but didn't.
The writer of this article is clearly trying to pull heartstrings of her readers. In reality things must be very well in RV land if this is all the fuss the author can conjure up...2 clients who want to blame others for their own choices and inactions.
What is of more interest to me is the words of Nick ( independent property expert from outside the RV space)...
Core Logic head of research, Nick Goodall, says retirement villages’ ORA model makes it difficult to measure the market, but, given the ageing population, he would not be surprised if values in the retirement sector held up better than the rest of the market.
“Especially as ‘buyers’ of these properties are likely to have equity built up from other property ownership and are therefore less affected by the affordability pressures faced by other owners/buyers due to increasing interest rates.”
This, coupled with multiple other sources indicate RV prices are not falling in fact the latest round of results show rises even as NZs average HPI has reduced 15% from peak. Brent also said recently "OCA are price setters not price takers". It is clear prices are not retreating nor looking like they will. The article also states the client pool is about to double in the next 20 years.
So while this article is obviously attempting to villainize the RV industry, all I see is more underscoring that's it a terrific place to invest with 98% happy residents.
I agree with you Mav, which is why I didn't bother to comment on the actual article, but to dubya's comments re continuity of care.
I do stand by what I said though - continuum of care is going to be a game changer in my opinion. People needing to move out of their home in their 80's are going to find the care suite model very attractive in more ways than one. They are the option that will provide the highest level of "peace of mind" both for the resident and their families.
If you had asked me five years ago, I would never have believed I would say this ... but if I was in the financial position to move into an RV at 80, I would choose a Care Suite without any hesitation whatsoever. Guaranteed home for life (barring the need for secure dementia care), continuum of care as my needs change, and a really pleasant/attractive suite with everything I could possibly need. OCA will be very well positioned.
As you say, the vast majority of people living in RVs (all levels of accommodation) are very happy. One should never underestimate the value of "peace of mind" in one's senior years. Its a damned shame the general public and media, are so quick to condemn. RVs are the future for Aged Care whether they like it or not, and I for one am happy about that, providing of course, those who need full government subsidisation, have access to care. As far as I am aware, OCA is the only provider that has committed to always providing that lower level of care.
Do any of the 'residents' in any RV, in any of the various types of accomodation, actually "own" their accomodation?
Always good to hear your perspective JAK, especially you working at the coal face. My mum has just gone to a RYM dementia and I cant speak highly enough of the care she`s getting.
Those care givers are angels with the patience of a saint, they really are.
UBS did some work on what influences the choice for an RV.
No 1 - Care
No 2- Price
No 3- Location
No 4- Weekly fees.
No 5- Brand
No 6-Ease of visitation
No 7- Amenities
No 8- DMF/refurb cost on exit
(the ist 3 factors where far more important than the rest)
You are totally right ( of course) that care is paramount. Fletchers can build all the gated communities they like and even share the capital gains......without full on serious care offerings they are dreaming.
Just making you aware that ZB has been running several shows on the retirement industry, these last two days. This afternoon Simon Barnett and the other guy after 1pm, last night after 10pm Nathan King, and also Francesca Rudkin yesterday afternoon.
I only heard a few snippets, none positive. In case you want to look it up
I can't see the review coming up with anything materially different.
It seems the more you moan the more you think you are going to get. The big bugbear of the elderly is getting a share of the capital gains on the sale of your unit "Lu ence to occupy".
Now there are some differences to owning a licence to occupy and actually buying a unit outright.
Cost - An outright purchase of a unit will cost (in the initial outlay) much more than a licence to occupy.
Maintenance - Will an elderly person have sufficient funds to carry out the required maintenance or in fact want to for the relatively short time of ownership. Can you imagine a new roof, leaky home, outside repaint, garden maintenance, new fences. I could see the condition of units deteriorating rapidly which would erode prices. Where will the capital gains be then. There would be covenants to make sure regular maintenance and upgrades are carried out in a timely manner and to standards set out, in regard to materials, colours, etc.
Capital loss- Currently if you owned your unit, you could be facing losses rather than capital gains.
Continued ownership - The next purchaser will be specified as to standards that fit in with the village. Age, state of health, number of occupiers, visitors, etc which will reduce the marketability of the property. This will further reduce demand and value.
Interior- There would also have to be covenants as to standards of interior maintenance and refurbishment, which residents may not be able to afford.
I think when it is all thought out, this would scare the derley more if things were changed.
After all RV's are not Government Departments ir charities and are not making money hand over fist.
She was in The Townhouse for 3 years the DMF was pro rated over 5 years at 20% of purchase price.
The Town house sold straight away went into each stage of care paying extra monthly care premium
There was a couple months lapse with settlement because of covid lockdowns at time but the difference for premium was done at settlement.Weekly fee of $100 that was to never increase for duration in townhouse ceased when she moved out.