Yup - there is a direct correlation between general house prices and retirement village prices (adjusted for locality obviously).
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I don't see that will happen. As interest in record low...a lot of investors have cash.....shares are scary.....so... property will be the safe haven as u can see the assets....
No doubt - real estate prices will dip a bit in the months to come. Question is however - how will they look in say 3 or 5 years from now? Assuming NZ gets better through this crisis than others (and so far it looks like that), there are some million Kiwi Expats, some 20 million Australians and a handful of NZ permanent residents living abroad who all might want to consider moving (or moving back) to safe and healthy NZ.
Let just 1% of these move to NZ over the next year - this would be already 250,000 more residents (or something like 100,000 additional houses required. I wonder how this would impact on our property prices?
I don't think long term investors can lose at these prices.
You will be joining the NZ resident investors with term deposits of $171 billion and saving deposits of $82 billion (total $253 billion*) when risk aversion post the lockdown switch over to yield enhancement.
Imagine what will happen to stock prices when the bank depositors attempt to get better yield - if just 10% of the term deposits ($25 billion) attempt to get better yields via the stock-markets!
* RBNZ - https://www.rbnz.govt.nz/statistics/...sits-by-sector
Fair value though? Sure let's hope people don't realise that NTAs will drop as property values drop as people become unemployed and the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.
If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on optimism regarding the state of NZ's economy and ability to sustain real estate valuations.
Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.
Of course this also applies to the other retirement village companies, perhaps to a greater extent.