October 2021 share price was 140/150 when 10 and 20 EMA last crossed …been downhill sincere
Hope history doesn’t repeat
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This time will be different..OCR paused.. property market reached the button... gearing will be down after the sales on some assets
Its crossing back up
Wax on, wax off. Don't sweat the technique.
"Don't Sweat the Technique" by Eric B. & Rakim promotes the idea of mastery and originality in art. The song emphasizes the importance of staying true to one's artistic vision and not allowing others to dictate the creative process.
Yeah , I chewed that over for a while too, Jagger. It does indeed seem an extreme number to take as the “ new normal.”
Here's my rationale. Firstly; the sequences of 6 month new apartment margins for the last 5 years since 2018 (%)...
36…31…30…43…36…30…25…25…26…30…32…40
OCA has been clear they get lower margins in the provinces. The lower margins above in the mid twenties are when they sold down Nelson and Christchurch. The higher margins above are firstly from Browns bay and Meadow bank and the last number sets have Eden , so Auckland centric.
Current stocks are weighted towards Auckland with obviously The Helier “wagging the dog” and probably a few left at Eden.
The thing that makes this absurd margin reality (for now) is that apartment building construction also always has 3-5 years of capital gains baked in at the sell down phase. OCA has also been clear to tell us that until now all construction contracts have been held at rates before the rampant construction price rises of the last few years. So we are getting new retail sales prices now on stuff built at 2019 build prices. And we know how significant building cost increases have been the last 2 years.
What has been the achilles heel of OCAs slow highrise building programme is now currently a boon. Villas of course all happen in a flash from foundation to handover hence about 15% margin or so Arv generally get.
So given the factors above I have concluded it is fair to assume these 35-40% margins, although almost unbelievable, will hold another 1-2 years before settling back to your 25-30% .
That's my thinking but I have given you my workings in the earlier post so you are right to use whatever margin you think is more appropriate. Im curious if you think 39% is still a bit too optimistic Jagger?