Welcome back bull. Smart move riding the breakout higher again...although it could easily be argued it was even smarter to simply hold and be patient and save on the brokerage of selling and buying back ;)
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Welcome back bull. Smart move riding the breakout higher again...although it could easily be argued it was even smarter to simply hold and be patient and save on the brokerage of selling and buying back ;)
OCA - someone is bullish,,, price up and up.. MR B was right... we are to late but thankfully we got a few at 1.09..
Waltz still has a bit more to run I feel. :)
no plans to sell this unless the PL looks very poor.... assets look to good.
Depending on the mix of other policies, With a comprehensive wealth tax You may end up paying less in GST and income tax - plus real estate may become cheaper and affordable in line with the average of the OECD. Plus fiscal stimulus from increased minimum incomes may stimulate some commerce improving profitability and dividend payments? Environmental policies may mean long term environmental sustainability for future generations reducing weather extremes, bush fires and diseases and pestilence? Gosh I am sounding like a greenie now! So I would say swings and roundabouts for the target market for OCA ORA's with minimal effect on Oceania's business.
Given that it won't come anyway, even if we have a Labor / Green government after the election probably not worthwhile to check out the fine print.
However - given the the first million dollars per person is free anyway and - if any - only the repayment would be taxable ... how many of these retirement apartments are more than 3 million dollars or so (1 million per spouse minus DMF)?
So - even for a top luxury apartment no wealth tax to pay which would force you to downgrade ... take a deep breath and sleep easy :):
Boy, I sure hope not, bonkers scheme, given the Auckland median is about $1m, its a peculiar definition of "wealth". Spare a thought for any care home nurses who are unlucky in love and bought a little Auckland house ages ago. Even their term deposits earning 1.1% before tax will get taxed.
I am not sure if that is socialism or welfarism to which you refer...however of course it depends on the actual tax rates and any threshold before the tax applies. But true left of centre tend to have higher rates with transfers to public services and the poorer whereas right of centre tend to reduce rates with cuts especially for the wealthier. However the effect on net income after gst and income tax depends in the effect of any fiscal stimulus from their policies.
However as BP referred the chance of their policy on this point being implemented is next to nil even in a coalition.
I am not sure why Wealth should not be taxed (with a threshold), it makes as much sense as taxing income and more sense than taxing the income needed merely for an individual to subsist.
Its nice to see the market starting to show some appreciation for OCA's outstanding long term growth prospects.
Maybe the drunk Monkey's are just starting to wake / sober up and catching the whiff of a feed ahead ;)
I'm committed for the long haul.
" They need more money to give away and it never is enough."
... adjusted ... it may well be some truth in that...the true followers may not see it that way but.....
OCA will certainly be starting to provide some nice capital gains at last esp for those who bought and held from the 50 o 70's...
DISC: we banked some but now only holding a small allotment. not selling.
Personally, as a salary earner, dividend and interest earner, that income is all taxed. On that account I am privileged to pay a good chunk of tax every year.
As an owner of a house and investment assets, the capital appreciation on those is wholly untaxed. In a good year I can earn well above the average wage with no tax deducted, and it is legal. Perhaps on that account I might accept there is a contribution to society that owning those assets might allow me to afford.
Just to be clear, Labour Party tax policy for at least this next term is, NO NEW taxes (so that rules out a wealth tax)
& only a new 39% tax rate on (an individual's) income over $180,000. (so a couple bringing in $300,000 with each earning $150,000 would not be affected).
Like many, concerned about a wealth tax on assets so thought better check it out.
With Labour on track for a very comfortable win, better they govern alone without the Greens in terms of tax.
How about you all take your politics and tax discussion to the appropriate off market threads.
They will maintain a relationship with the greens, they may need them for a third term even if they don't need them this time around.
Moved from FSF ex div (till recently was a supplier) to OCA and I want to tell everyone. Now my biggest holding and this time around I feel I timed OCA well. Been a very good few weeks. I like the information I find here. Thanks
Welcome on the train Mike
There are some excellent and long suffering posters who have contributed some really good stuff on this thread. I agree that you think you have timed your entry right. Without another major disruption ahead I personally believe the story gets easier and easier to see from here on.
Guys here who have done awesome and difficult analysis over the years are about to become redundant when the bottom line is now poised to take over the talking.
It is already (re)taxed if it earns income, not if it earns capital gains. Hence why Kiwis tend to invest in land for capital appreciation, and not into capital that boosts the productivity of labour. However the current system is unlikely to be changed by any likely government, so Oceania's ORAs prices are likely to continue to increase at rates faster than the increase in incomes...imo (DYOR)
Hear Hear ! I've had more than enough of it too.
Even the drunk monkeys will be able to start seeing the wood for the trees when OCA's announces its shockingly good half year results in late January and that Credit Swiss analyst who has a $1.30 price target will get a major wake up call too and have to upgrade substantially to avoid egg on his face.
Just want to reassure you, this was a clarification regarding a tax policy which just like rising or falling real estate values would generally affect sales of Retirement units, i.e. if retirees are faced with a brand new large tax bill on selling the family home, this will affect both their thoughts around & purchase of Retirement units.
Definitely not being political, just a neutral clarification.
Potential political policies have flow on affects which should not be ignored.
Like sailing, we're all looking upwind to see what (or potentially) we're sailing into.
agree some people tend to be a bit narrow in there overview of things which can effect investments , tax does and always will effect peoples behaviour in regards to investments and as i pointed out the greens policy would mean the occupational rights in retirement villages would be taxable and could not be deferred
I have started a new thread regarding what tax changes the various political parties are proposing to implement after the election here and there's a good press article about it, to help continue the conversation for those interested. https://www.sharetrader.co.nz/showth...690#post848690
Oceania got their $125m at 2.3% pa
Easy peasy ....spend it wisely guys
not to be a glass half full trustee but i expect the next DIV to be paid from cash flow please..
DISC; dont hold much at the moment. But if they pay from cashflow we will buy some more in a portfolio.
There is still plenty here of development and share price reval for the next 10 years.. No point holding or any time frame less unless it all turns to sour puddings. Unless your dutch of course in which case sour yoghurt on the bosbaan rowing course sunday afternoon is yummy...
Agree 100% that we are on for a very exciting and prosperous decade of growth ahead.
Just a quick note. Operating cash flow was up 11.3% last year to $99.4m. I am expecting strong growth in underlying profit and operating cash flow this year.
Their dividend policy is to pay out 50-60% of underlying profit so I expect strong growth in dividends in the years ahead too.
And weve arrived at $1.30! geez that was quick! thanks to the hound for barking at this one for so long. I must admit dropping the falling knife that was ATM and catching this one before it shot up was a lesson in Blind faith vs undervalued fundamentals.
........ duplicate
What are the thoughts on getting to 1.40 next week? Or are we going to pause at 1.30 for a while?
TA on ATM showed a possible step down unless FA showed some upward trends which could still happen. OCA TA showed a solid base and you can continue to whatch and invest in for a long time to come if the FA shows an incremental trend up and they start to pay dividends from cash flow. If there model works then you could still buy in under 1.50 or more and hold for 5 to 10 years.
https://www.nzherald.co.nz/business/...PUTOHONKQ6AFU/ Paywalled article about St Heliers OCA development site from the Herald last weekend.
I was out St Heliers way today so stopped by to see the Waimarie site. Earthworks are well and truly underway and security fencing was up so nosy dogs could not get a sneak peak other than from the road. Its about 1 Km to the east of the main St Heliers café and shops area, mostly a flat easy walk or drive by motorised cart. From the road I looked to the northwest and the views of the Waitemata harbor and cityscape are breathtaking.
It will be a breathtaking development with stunning panoramic views of the city, inner harbour and the Hauraki gulf. A nice park in front of it means those views will be unimpeded in the future and there's even a nice area for off the leash walking of one's dog. St Heliers, (for those that don't know Auckland) is one of the oldest most established eastern suburbs full of very upmarket homes. I am sure this development will meet strong demand from locals of the right age. Two other cars with older folks stopped to look just in the few minutes we were there. Mrs B also thought it was a stunning site.
I'll leave the really short term share price movement thing to others if you don't mind Old mate as I'm in for the long run. Very short term share price predictions are a crapshoot, might as well toss a coin. That said, over the next few months there will be a huge amount of money coming out of term deposits so it wouldn't surprise me to see this somewhere around $1.50, (possibly even higher), before the interim report in late January 2021. Once that report comes out and the analysts and professional investors do their revised calculations, that's when the fun will really start....but who knows, often momentum creates momentum and it could be $2 by Christmas. Time will tell.
Fundamentally, I still think its very, very cheap at $1.30...by my own estimates only on a forward PE of 11, (which is a no growth PE in this market) which makes no sense whatsoever for a company that's reached the point of inflection and about to start on years of solid growth. The sector average PE is 18 and I think this is where OCA will rerate too, over time. Over what period of time I do not know and that will depend upon OCA garnering the respect and trust of the investment community as a growth company. This respect and trust needs to be earned and is never given freely. The future is very promising but like all things about the future, time will tell.
P.S. I note this development creates 76 independent living apartments and just 31 care suites, (a very high proportion of independent living units for an OCA development). Its quite probably well worth noting for the potential of how good this development could be for shareholders that the upmarket luxury apartment market in Auckland is white hot at present. https://www.oneroof.co.nz/news/38510
Quick update on the chart, weekly log scale, 17MA & 43MA (approximates 50/200 day MA's) golden cross follow through nicely with a big bolt up from low $1 range. Solid close on weekly high SP speaks to strong demand. RSI toppy but can absorb more upside. Resistance above including ATH could slow things down a bit, leading to some consolidation around the mid/high $1.30. That said, a breakout and close above ATH $1.39 could see a run up into blue sky (ref SUM chart this week). Possible channel forming, upper line currently at ~$1.60, lower $1.15.
GLTAH
https://www.nzherald.co.nz/nz/politi...Z7MUGF4RKAQQE/
Cindy is absolutely adamant no wealth tax is coming and no new taxes in her second term apart from the 39 % rate for people making over $180K so I think we can all relax about tax issues. Need to get some growth back into the economy so the way I see it interest rates are going even lower and are likely to stay at ultra low level's for the foreseeable future so that's very supportive of the underlying fundamental's in this sector. The 2020's, a rich golden decade of prosperity for the retirement sector ?
Certainly the golden age for real estate investors looks like it will continue - covid level one (while Europe and the USA spikes), low interest rates, no stamp duties, no CGT.
When travel restrictions ease further, will returning kiwis and safe haven seekers flood into Aotearoa demanding a little patch of land to call haven? Has the property investment environment been sweeter?
Definitely a golden circle location in a top suburb. Still cannot believe they got planning permission. I used to occasionally jog along the waterfront as a student and had my snack and drink at Cliff Road/Glover Park. A nice little shopping area at St Heliers, it used have that coastal village vibe.
A Jewel of a spot and probably the units will be out of my price range when I become eligible to live there. I will press my nose against the fence and have whine from outside sometime too!
Yes...I know quite a lot, (more than I want to know but unfortunately I have too as a Trustee), about how extraordinarily difficult that can be. Residential development consenting on volcanic cones is best described as an exceptionally challenging process. Makes Boulcott street for another company look like short walk in in the park on a warm spring day. Highlights a key difference between the capabilities of the respective experts employed by the two companies and is something I haven't really thought a lot about until quite recently.
Mrs B and I did have a wee bit of a chat speculating about the pricing of the best apartments and what price they might command. Hard to put a figure on it...but...just for fun lets take a wild guess. OCA are reported to be spending $130m..lets allow for a contingency, (I know they would have already allowed for contingency's in the $130m figure) and suggest its $140m so if their development margin is 30% that suggests gross sale proceeds of ~$200m.
76 apartments and 31 care suites. Lets assume a care suite is on average about half the size and cost of an apartment so that suggests an average of approx $2.2m per apartment = $167m and $1.1m per care suite = $34m. Those numbers on an average basis for that area appear quite commercially feasible to me and suggests the premium north facing apartments with the most commanding views will be in the mid-late $3m range.
What's very cool is this whole development from beginning to end is effectively being financed at just 2.30% fixed for 7 years.
It certainly points to a a crack team behind the consenting process.
I thought a similar pricing for the apartments, if not a bit more if they are tempted to add a premium on to their normal margins. It would be a jump up from my South Auckland spot, but my locale is not its targeted market - although my holding in Oceania is on its way currently to boosting what I can afford when the time gets closer :)
with SUM blasting up i think SUM of us missed the boat on that one as to think we were holders a few years back and moved to this slower moving train... if MR B is right again it may be time to take some more. But SUM has really show where prices might go if this stock starts to fire up.
$4 million for the best views , a friend bought a property 20 years ago down the coast from moon bay and is now sitting well positioned and a view of the entire harbour out and across from rangi..
i think he paid , well but not much.
If SUM do $110m underlying this year that's eps of 48 cents so at $9.74 that's a forward PE of 20.2 which is not unreasonable for the current market dynamics.
Once OCA build the trust and respect of the investment community that they're also a growth company and their different business model works ostensibly in a very similar manner I think we will see OCA rerated to a similar ratio. If they can do 10 cps in the 10 months of FY21, (annualized 12cps) that suggests 12 x 20 = $2.40 is plausible sometime in 2021 or 2022.
"sorry i should be zooming sweden about now i could not resist"
When MR B moves into his luxury apartment and settle down to write a "Beagles Best Dividend investor Guide" or some such and from where ever i am residing i will order my copy.
The PE is high but im not going to argue as valuing commercial property is not my area but i was surprised we did not get more for our commercial partnership property last year. The other partners did not seem to take my view that rental commercial property for professional practises should attract a premium.
These suites are a mix of private and commercial as they are attached to a health care service and as such should attract a premium price due to their locations.
By now some may have read the article on lock downs from WHO.
Right - no more tax / politics talk on this tread
So back on topic
With a booming property market (even the RBNZ wants it to keep going up) and low interest rates and with Oceania's plans coming to fruition the future is bright
For believers in relativity theory OCA share price at least $2.40 next year
YOU CAN'T HAVE TOO MANY OCA
I believe the exact phrase we coined is "You can't have too many" Got to get in early and let the next 22 years of compounding growth fuel our ability to buy the best apartment at St Heliers so we can move into Eagles Nest...opps sorry, Beagles Nest when we're 80 and write that book. Could be called "Being a Dividend Hound"...taking a dogged approach to investment returns...does have a nice ring to it :)
If you could please write just a three or four page whitepaper now you'd probably help ~30% of the contributors to this board make a significant difference to their net wealth over the next few years!
Very happy with my OCA hold, bought about a third of my holding around 70c and another two thirds around 95c - might be buying a property near the end of the year and I'll be damned disappointed if I need to cash these up to do that! Alas, I now can't really afford to accumulate any more...
always leave 20% in cash
tj once played a game with me ....who’ll get to 140 first, ARV or HGH
Need to play another game now ....who’ll get to 140 first - OCA or HGH
I am well positioned either way but possibly worth noting that HGH did get to $1.40 last week.
We need a proper game, which will get to $2 first ?...oh wait...that's no good either...the old Heartland already been to $2.14, ask me how I know ;)
Okay, here we go then, which one gets to $2.20 first ? My guess is OCA.
pull back to 125 possible maybe even 120 ..but not for long. double top and could push higher simple because the market is starting to party up...
weeks away from vaccine trial news starting to heat up...
market could really take off on the Regen vaccine after all it took out ebola
At 1.29, OCA premium to FY20 NTA is 35%, still lowest of the five retirement stocks. RYM 227%, MET 74%, SUM 97%, ARV 41%.
Not bad, especially given quality of management and strategy, development pipeline and shift towards profitability all contributing towards possible inflection point for OCA as indicated by Maverick / Beagle and others previously. Not to mention macro support from RBNZ fuelling property market and possible redistribution of MET funds within sector, plus longer term tailwinds from demographic changes.
Also of note for me is that yield from OCA is historically a sustainable once, with net operating cashflow comfortably covering dividends (FY20 being $0.04 dividend, and $0.08 OCF / share). Good management of capital, and balancing of return vs re-investment, in my books.
Long story short, $1.29 could look very cheap in medium - long term
Great for those of us haves that are invested in property in one respect or another, but man haven't the COL's intentions around home ownership seriously backfired and now seemingly all brakes are off for the next 3 years. Glad I'm not trying to get on the ladder, while disappointed I can't find another big pile of cash to throw at OCA and the like...one thing's for sure, I aint selling what I've got.
Just like our thoughts on acceptable yield are having to be realigned for today's low interest rate environment, I think the good old 20% cash thing also needs a look at in many cases. 20% cash (assuming we are talking investment portfolio here) back in the day was fine when it was earning money in the bank, but with the market running hot, how much are you losing? I think I'd rather have some of that 20% in a relatively liquid bricks and mortar stock, like say OCA for argument's sake ;) . The market has been such that if I'd had 20% of my portfolio in cash a month ago, it would be worth less than 15% now. Of course your %$ in cash vs stocks should change according to the market, but that's the tricky bit...like obviously if there was an incoming pandemic, you'd want to be cashed up ~80%...easy peasy, right? ;) Just my 2C's of course.
"good old 20%"
for taking advantage of that best buy day...
with 80% of your cash working hard and presumable going up up and away
you should always have some liquid funds.
its not a perfect world.
In fact we did not sell all our stocks in time and had to hold. Some of them wont come back to profit to several years yet.
Your rain day fund could go to bonds if you want .
Your so called loss of money is not in fact loss when balanced for GDP and country by country advantages.
In this case your NZ dollars is holding its value.
Looks like Heartland bank is offering sub 2% mortgages...
Latest REINZ statistics are out and volumes and prices are VERY strong https://www.reinz.co.nz/Media/Defaul...ber%202020.pdf
National medium price up a remarkable 14.7% year on year and highest number of property sales for 42 months. The market is on fire and with interest rates from as low as 1.99% it would seem its only going to go one way https://reinz.co.nz/residential-property-data-gallery
The lovely Bindi, CEO of REINZ says Auckland sales were the strongest in 52 months ! https://www.nzherald.co.nz/business/...3R3MSSNPX4FF4/
prices up in the central North Island. The new road system lets me leave botany in the late evening and before i know it im in hamilton. Need to get an auto driving car. No point driving now with the 2 lane each way being extended to south of central north island towns by late 2021.
You could own a house well out of auckland and sit back and have your car drive you to town.
Cheap loans add your self driving electric car to your new house mortgage.
Should be a finance bundle.
Just want to say I'm a young (22) investor, and the group on this thread has supplied me with a wealth of information over the time that I've been watching in the shadows. An incredible broad range of insight on this thread, thanks guys. I picked up Oceania on its fundamentals a while back, exciting future.
is this moving back to tax? just saying ...
Bottom line is owning houses works well for everyone, regardless which major party they vote for. No Party wants to introduce a capital gains tax stronger than the bright line tax system on houses. It is unfair, but hey who wants to change that?? We all have it in us to minimise the taxes we have to pay.
Tax...YAWN...lets get back to the lovely Bindi from REINZ and those extraordinary real estate statistics. Volume and price are important for companies in this sector and its great to see the market is really performing well in both respects.
hey Beagle - don't concentrate on annual increases (like v Sept 19)
You need to look at whats happening NOW
Like HPI for Auckland up 2.4% in last month and 6.4% over last 3 months (June to Sept)
That's nearly a 30% annualised increase
Aren't Oceania selling a few in Auckland at the moment
Cool eh
Very good point mate and most of that over winter and before the 1.99% mortgage rate !
Yes big development sales in Meadowbank and the Sands.
Nelson - Brand new facility just opened and look at the sales volumes there
Nelson: +66.2% (from 65 to 108 – 43 more houses) – the highest for the month of
September in 17 years
Nelson values up 14.5% in the last year...BUT
Compared to August 2020
• Median Price up 8.6%
Heck mate, Nelson up 8.6% in just the last month that's an annual rate of 103% per annum !!
When one takes close focus on what's happening in the real estate market NOW as me ol mate Winner has very astutely mentioned, the future does indeed look extremely promising.
Stephens from Westpac is the most useless of the bank economists in this country
His team surprised how strong market currently is but at least he’s getting back to some sort reality when they say ‘Westpac's economists think the current housing boom will continue well into next year...’
https://www.interest.co.nz/property/...-and-wonder-if
What did CBRE or whoever revise their property price movements down to?
The article mainly talks about the RBNZ's stimulus by way of the OCR, but I don't know that they have a lot of options here as kinda need to follow our trading partners to keep a cap on the NZD. What isn't mentioned in the article is the influence the culling of the LVR requirements has had, which I reckon has opened the flood gates in a big way, although you'd hope the banks have started to apply some caution in this respect.
"...strongest September sales volumes in 14 years..." Hmm, back to pre GFC... Will be really interesting to see what (if anything) the RBNZ do to put the brakes on. Doesn't sound like any help is coming by way of Cindy.
Expect to see fairly strict LVR's re-introduced once the election is out of the way.
Two guys chatting loudly in cafe were going about how the second term of a Labour government always sees property prices rocket ahead ..and investors (I’d call them speculators) love it.
Retirement sector = long term unless housing is replaced as a base asset class by something else.?
Global crisis are buying time events for this sector surely?
Notice Mr B's large investment in this sector.
A ten year investment?
Yes I am looking at this as a ten year investment or more.
Julian Cook of Summerset once told me you don't make the real money out of retirement villages until the ten year point.
To understand what he means by this is to understand this sector.
In SUM's case their average resident stay's about 9 years. (In OCA's case its going to be a lot less, but I digress).
Its one thing to develop a village and get a development margin on units sold, (which actually isn't much when you consider that a lot of common area buildings and facilities have to be built at the same time which don't really give much of a return at all)
What's he's talking about is the real money, not the 25% development margin.
For example John and Jenny buy a lovely unit at say Ellerslie for say $650K. Nine years later when they pass away their estate gets back about $450K after deductions but the unit is resold for $1,450K with nine years compound capital growth in value and the company makes $1m tax free on resale which is obviously vastly more than the 25% development margin when the $650K unit was first sold = $162K which was taxable.
The secret sauce that very few people are understanding with OCA is that the churn will be much faster...clipping the ticket for 30% every few years.
We will see tremendous gains in the next decade or two, and in OCA's case their dividend yield is the highest in the sector and dividends will grow really strongly in the future so its the perfect retirement stock for me.
Take SUM as an example to help understand what sort of returns compound tax free growth produces. They listed in November 2011 at $1.30, now just on $10 and not quite 9 years old. Check out the returns on RYM shares since they listed and you start to understand the power of compound tax free growth.
I think with this post I might have talked myself into getting even more...it wouldn't be the first time that in putting my thoughts down on paper, (so too speak) I've realized the full extent of the opportunity and bought more.
Thank you MR B and im sure all investors are interested in the OCA model to provide an opportunity to add balance to their portfolios.
Yes we have had a small order in for a few days now in holding company to add to our allotment in sector and expect to add more over the coming 2 years.
Beagle,
Why will the churn be faster for OCA compared to the other retirement stocks?
Also these were the DMF fees for OCA about 18 months ago. I don't think they've changed.
Individual accommodation: 30% over three years. (10% per year accrued and apportioned on a monthly basis)
Care Suites: 30% over three years. (First year fixed at 15% - irrespective of whether a person stays one week or eleven months. Second year 10% and third year 5%. Second and third years accrued and apportioned on a monthly basis)
Thank you @ 1.29 for holding company today.
DISC: Bought back at 1.09 privately. Traded at ranges .70 - 1.30.
now holding long term or until model fails to work.
Crazy how quickly it's come up really...only recently we were talking OCA must surely ride the rising tide with the rest of the sector. I look back to when it was around the 70c mark, trying to talk my parents into getting into it with their expiring TD's, conservatively telling them that if you don't double your money from these levels in 5 years, then I'll eat my hat. Of course we're not quite there yet, but something tells me my hat's safe lol.
Then at about the 80c mark asking my bank manager if I could borrow against the house to buy a few more...unfortunately it was against their policy...should have changed banks! Anyways, well positioned with this making up about 70% of current portfolio at an average of 79c..in it for the long term. Can't sell cos of tax, can't buy anymore as I need to diversify!