Agreed.
Yes but whatever their needs are they have to be able to sell their houses first, something that's getting harder for people in Auckland.
Agreed 100%. I wish KW would come back...
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I believe house price inflation is THE most important outside factor for Summerset, they can at least control build rate. House price inflation affects, development margin, resale margin and deferred management fees.
If you have taken the time to create a crude model (I have), you will see the huge affects.
I agree. That said I think their development model has matured quite nicely over the last couple of years. The extent to which a possible major correction in housing would impact development margins and the extent to which it would affect resale gains on existing units is what the market is currently grappling with. Who knows what new policies Bill English and his new team will have around housing and immigration and what effect rising interest rates will have on housing ?
A lot of unknowns at present and the market hates uncertainty. I am taking the approach that its best to play the technical factors and ignore what appears to be a solid supporting valuation (for this sector) from a fundamental valuation perspective for the foreseeable future. I'll buy three trading days after a confirmed break up through the 100 day MA and am quite happy to bide my time till then.
... and you well might be right couta with your prediction ... or you might be not. If I am buying below the MA200 I have typically quite tight stops ... and they have been triggered.
You are right - the fundamentals (for all retirement villages) look still rather healthy, but one of the reasons for the nice growth we enjoyed so far might be now gone: interest rates are now rising (thanks as well to the outcome of the US elections). Markets expect the housing market to stagnate or go down (at least in Auckland) and valuation gains might be for some time a thing of the past. As well home sellers might not have unlimited funds anymore to buy themselves into these quite expensive units.
Not sure either that the SP will increase following a fantastic EoY result - just look at what happened with the SP after Sums earnings announcement end of October.
But again - you might well be right - I can't see the future, but it feels that the odds are pointing to a bit more caution.
No need to worry yet
For medium to long term holders all within normal limits
Sometimes people get too clever thinking about the future and guessing what a new government might do and all that sort of stuff
If the Linear Regression Channel (LRC) is plotted from the Low to the High, the SP has already broken down through the lower channel boundary, which also happens to be around the 200DMA and the rising support trend line.
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