Originally Posted by
Maverick
Bingo Sailor...its all about turnover returning to normal.
Here some math's to help with this logic.
The selling prices and margin figures stated for the full year mask the even more impressive HY2 figures . By this I mean the 2HY figures are even stronger than presented as the figures in the full year are an average of 1HY and 2HY. When the 1HY prices ( already up nicely) are removed OCAs HY2 are almost unbelievably strong.
OCA new build margins in HY2 23 was 39%.(I jest you not).
Here's the new sales prices 2HY23 compared to PCP
Villas +8.5%
Apartments + 14.5%
Care suites +16%
Resales of villas and apartments continue with a margin of 28%
and cares suits around the usual 14%.
Compared to PCP 2hy they are up;
Villas -1%
Apartments +65% (misleading growth here as they now lump new and resales together- but regardless - its impressive)
Care suites +7%
So the concoction of high Margins x high prices and now as we migrate to NORMAL turnover then that effect on profit is substantial. The holy trinity.
Rawz and RTM, the banks dont have to be right, but the all important mood set by them and the media are what got us into this deeply depressed property market and their reversing of this now is what will take us out. For fun, just look at the property headlines making news today compared to those just 2 months ago.
I'm not only talking only about investors sentiment per se, but also ( perhaps even more importantly) the hunkering down mentality that made house buyers and sellers to sit on their hands to " see what happens"....causing the depressed turnover.
I can clearly see through my workings that OCA as in the prime spot of the RVs to reap the most reward from turnover normalizing. You can see above the apartments are enjoying substantial gains while villas not so much. OCA are sitting on a powder keg of finished apartments ready to go.
...and then there's the Helier...