Today's property stats are a stark reminder about how tough the current market is out there. That's why I think that the interest shown in recent days in retirement stocks will run out of puff pretty quickly.
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Today's property stats are a stark reminder about how tough the current market is out there. That's why I think that the interest shown in recent days in retirement stocks will run out of puff pretty quickly.
Don't U see the article??? When the oldies need to go to the rest home....they will need to go ..no matter whether the property market is down or not
Maybe so X-men ….in some cases that’s probably due
But why do Oceania and others ‘blame’ a sluggish property market for sales not meeting expectations?
And that’s why even though have an abundance of units to see new sales numbers are currently a lot less than they were 3 to 4 years ago.
The correlation to REINZ 'property' sales data is over stated imo, for one thing it doesn't include RV sales. Sure there's an effect on people needing to sell their home in order to buy an ORA, that's is acknowledged, but the effect on RV ORA sales is more muted than the REINZ data implies.
Scott Scouller from Summerset said this a couple of weeks ago, I think it's a fair reflection of the market conditions vs RV sales:
"2Q24 METRICS – SALES OF OCCUPATION RIGHTS AND HY PROFIT GUIDANCEThe wider property market in NZ has been softer than anticipated to start 2024, restrained by high interest rates, weak consumer confidence and cost of living pressures.Despite these conditions, Summerset Group reported 333 sales for the quarter ending 30 June 2024, comprising 156 new sales and 177 resales.Total sales for the first half of the year were the highest first half the company has recorded, with resales being particularly strong, resale pricing was up 0.3%. Sales for the six months to 30 June were the second highest ever behind 2H23.Summerset CEO Scott Scoullar said the result was pleasing. “Settlements were strong for the second quarter of the year, up 31% on the first quarter and up 22% year-on-year.“Our residents’ motivation to buy continues to be driven by life events, such as their health or desire for more community, these factors don’t change in a constrained economy. While our prospective residents are still highly motivated the sluggish property market is restricting them from selling their home as quickly as they would like which is slowing some moves to our villages.“In spite of this it’s been very pleasing that Summerset has now achieved total sales volumes of 1,200 units over the past 12 months against challenging market conditions.”"
Effect yes, direct correlation to RV sales, no. 'Time to sell' is the effect.
It may be true that there is some element of people delaying their move into retirement villages due to the soft general housing market right now. But I think it is worth noting that for most potential ORA purchasers this effect will be a delay rather than a cancellation of plans. what this means to the RV operator is that on average those people will occupy their retirement unit for less time in total - hence for any given client the actual return to the village operator is actually pretty much unaffected. Except that the RV operator actually carries less opex in relation to each of those clients (due to their shorter overall stay)
ie the delayed sales will lead to a shorter average occupation time and hence a faster turnover of units.
Appreciate that ORA sales are not included …. Private sales, estate transfers etc etc aren’t included as well. Discussed this with Maverick a few months back and we both agreed that irrespective whether you use Stats NZ data (Maverick uses) or REINZ data property sales trends (ie growth or otherwise) gives a pretty good indicator how RV sales are going. Good enough for me anyway.
Interest.co.nz headline today on the REINZ data was Housing sales crashed to GFC levels in June
Jeez hope Oceania and the other RV sales don’t crash over the next few months
Inflation...high interest rate environment... recession ...
Wed CPI report is due soon...
Its winter. Housing market is already dire and winter is traditionally a slow period anyway so who cares. Its all about sentiment going forward.
Don't need a boom but a functioning property market is all we need. Quite a few private development sites in my area that have been on ice for 18-24 months are now well underway.
This one is flying up and they aren't even marketing it properly just yet:
https://www.faisandier.group/projects/342-waiwhetu-road
They must have confidence in their timing, they kicked off about 3 months or so ago.