NZ Herald: Falling house prices and rising building costs have prompted a $2 billion developer to stall plans for a controversial new eight-building $300 million high-rise Auckland retirement village.
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NZ Herald: Falling house prices and rising building costs have prompted a $2 billion developer to stall plans for a controversial new eight-building $300 million high-rise Auckland retirement village.
Not so much values coming down, but costs rising exponentially. $300 mill now going to cost $450 mill. Must have a flow on effect into existing building value.
Value only drops if you are a desperate seller, or new stock easy to replace at low values. I would really be concerned if costs of building and land was going down. So I say hang in there.
Sure way to drop SP, is to have a capital raise in uncertain times. I feel they will either use borrowings or reduce dividends temporarily. Watch care prices start to increase.
Only stupid management will be like possums caught in headlights, instead of being proactive in covering costs and reasonable profit.
Escalating land prices have been the single biggest contributor to rising property prices, easily outpacing rising construction & building costs.
Land prices are now falling rapidly - 35% down in some parts of Auckland and there are now mortgagee sales taking place.
Factor that into ‘replacement’ costs.
Meanwhile …
https://www.nzherald.co.nz/business/...HQOJMNZOHFQQ4/
A long-awaited review of the much-complained-about Retirement Villages Act is underway, potentially improving the lives of more than 40,000 residents, overhauling the financial model and demanding places meet healthy homes standards.
Te Tūāpapa Kura Kāinga The Ministry of Housing and Urban Development announced the law probe this week into the multi-billion dollar sector following widespread calls for change from Consumer NZ, the Retirement Commissioner, the Retirement Village Residents Association,
Owner/operators keeping 20 to 30 per cent of retirees’ capital via deferred management fees will be one area under the spotlight.
Pretty prescient October 2020 rant from me. I obviously missed my career calling. I should have been a chief bank economist.
bull is continuing to stir
And having had their retirement sector investments (and house buying ambitions?) 'beaten up', investors have regrouped into generational cohorts, turning on each other.
I am feeling a bit smug, having never understood the fundamentals behind the retirement sector enough to be brave enough to invest in it. Of course that has seen me miss out on the massive gains over the last 20 years, so I don't know why I am feeling smug. Being scared of Ryman has cost me big time! However, my ignorance and foolishness' for not investing in this sector has seen me today as an 'independent observer' watching the train wreck from the side of the tracks. One of the principal reasons keeping me out was that I did not see a similar ramp up in retirement village shares in Australia, a country with similar demographics to NZ, and I wondered why. I came to the conclusion that the retirement village sector in NZ, from an investor perspective, was just an extension of the kiwi fascination with the domestic property ponzi. And maybe I will be proved right about that. Those thoughts didn't help me get rich though.
I wrote this post thinking I would call for some Christmas cheer and an least a season hiatus to the investor wars. However, I think I have probably just stirred up a bit more trouble but putting my own oar in where it wasn't wanted. Sorry about that. Merry Christmas to all retirement sector investors anyway.
SNOOPY
Wow Snoopy, impressive stuff. Oracle of Sharetrader?