Retirement Sector Stocks

[BlackPeter]

Interesting chart ... in some periods it seems to be RV to lead and in others the HPI. As well - offset seems to be quite variable between plus 2 and minus 3 years. As well, even if we ignore the variations in offset - the correlation is clearly ways below 100%, but yes - 1/3rd might well be true in average for the given chart - however i doubt that this is any help in predicting future RV development based on assumptions about the development of the HPI.

Whatever it is - no doubt that the expectations about the development of the HPI do have some impact on the RV ... however, what your chart clearly shows is that it is basically impossible to predict at any given point in time the future development of the RV based on the development of the HPI ... and I guess this is what the posters try to do who try to ramp RV based on HPI horror crash scenarios.

[winner (n)]

It's very complicated isn't it BP.... a bit like the question of whether a 5 Year CAGR actually means anything eh.

But whatever I suppose we can conclude (with out being precise about it) that if HPI declines then RV share prices will likely decline or may have already declined ,,,,, good summary

[Basil]

Agree to disagree based on my 20+ years boating experience.
Useful article for anyone into paddleboarding  https://watersportspro.co.uk/best-tide-for-paddleboarding/#:~:text=At%20high%20or%20low%20tide%20the%20water%20is,and%20mid-tide%20will%20be%20between%20these%20two%20times.

I guess the point of this analogy is when the real estate market turns it usually turns gradually as it changes from being a sellers market into a buyers market.  Today the Herald reported that there was an unprecedented glut of houses on the market, or words to that effect and not many buyers.  I think we all know what that means going forward.  https://www.nzherald.co.nz/business/nz-awash-with-houses-for-sale-national-inventory-jumps-895pc-auckland-more-than-doubles/VLL4ZWGGWU66SCW7UC6Z2CRMW4/

As for the correlation between house prices and retirement sector stocks, I think its pretty good but obviously there's other factors to consider like for example the unprecedented ~ 20% construction cost inflation hitting the sector's development margins and the extraordinary way the Government are systemically taxing the sector by heavily underfunding care costs.  These issues aren't going away anytime soon.

[Plata]

I wonder if there is useful link between the amount of positive/negative news stories about house prices and retirement stocks. With the degree of retail participation in names like OCA I imagine sentiment in the news would actually have some impact.

I hold OCA, ARV and RYM in this sector and have paid the price for it in recent times. The real questions for me is will any political party solve the care crisis? Are care-less villages less attractive? Is it easy to convert a care facility to independent living? On that last note, will be very interesting to see how many OCA/ARV care rooms are converted to ILUs, especially OCA as they seem to have given up on the care premium dream.

[Retread]

PS-In nearly all the areas where OCA have facilities the avg house sale price in the given area easily exceeds the cost of an apartment/villa.

Ahem, I am not so sure about that claim Kasper, any facts to prove it. You're also comparing houses that one owns with an apartment that one has a LTO

[Ferg]

Ahem, I am not so sure about that claim Kasper, any facts to prove it. You're also comparing houses that one owns with an apartment that one has a LTO

This is a well known and documented fact.  For example page 17 of the presentation for the year ended March 2021 states "Average sales prices for Oceania units and care suites are significantly below the median houses in their respective surrounding catchments - this provides some buffer from a cooling housing market".

"Units" refers to villas and apartments per the OCA reports.

[kasper]

This is a well known and documented fact.  For example page 17 of the presentation for the year ended March 2021 states "Average sales prices for Oceania units and care suites are significantly below the median houses in their respective surrounding catchments - this provides some buffer from a cooling housing market".

"Units" refers to villas and apartments per the OCA reports.

I was a bit slow to answer so thanks for doing so, roughly a 250k difference on avg (As an example avg house price in my area is currently about 850k, OCA 2 bed Apartment goes for about 600k and a similar pattern exists in most other locations.

[Retread]

This is a well known and documented fact.  For example page 17 of the presentation for the year ended March 2021 states "Average sales prices for Oceania units and care suites are significantly below the median houses in their respective surrounding catchments - this provides some buffer from a cooling housing market".

"Units" refers to villas and apartments per the OCA reports.

Apart from the OCA spin have you got some actual numbers Ferg?

Try this. Awatere apartments in Hamilton. 2 plus study apt 870k. That is higher than the brand new standalone houses I looked at in the city.

In the email from OCA they told me about the weekly charges $125 pw (fixed for life woop de do) and the price of the unit. But said NOTHING about the DMF. For that cost I had to go digging. The DMF is capped at 30 percent after three years. Do those numbers Ferg and Kasper aka couta... 87k per year ie 10 percent of the 870k buy in cost

Yea 870k buy in cost is lower than many villages obviously. Though all you get for the money is a right of occupation not much different to a tenancy. I give my tenants a decent offering that costs them 20k per year not 87k per year. I liken the RV 'purchase price' similar to a bond that a resi tenant would pay except for the fact it's about 400 times higher.

I wont be surprised to get criticized for my views but you have to admit that the retirement industry has done very very well out of the pensioners.

[kasper]

Apart from the OCA spin have you got some actual numbers Ferg?

Try this. Awatere apartments in Hamilton. 2 plus study apt 870k. That is higher than the brand new standalone houses I looked at in the city.

In the email from OCA they told me about the weekly charges $125 pw (fixed for life woop de do) and the price of the unit. But said NOTHING about the DMF. For that cost I had to go digging. The DMF is capped at 30 percent after three years. Do those numbers Ferg and Kasper aka couta... 87k per year ie 10 percent of the 870k buy in cost

Yea 870k buy in cost is lower than many villages obviously. Though all you get for the money is a right of occupation not much different to a tenancy. I give my tenants a decent offering that costs them 20k per year not 87k per year. I liken the RV 'purchase price' similar to a bond that a resi tenant would pay except for the fact it's about 400 times higher.

I wont be surprised to get criticized for my views but you have to admit that the retirement industry has done very very well out of the pensioners.

And what is your aka Retread? The fact that you highlighted mine for some reason tells me you have an axe to grind.

[Retread]

And what is your aka Retread? The fact that you highlighted mine for some reason tells me you have an axe to grind.

I love your old name it had plenty of bite. There is more to you than a friendly ghost

[BlackPeter]

Apart from the OCA spin have you got some actual numbers Ferg?

Try this. Awatere apartments in Hamilton. 2 plus study apt 870k. That is higher than the brand new standalone houses I looked at in the city.

In the email from OCA they told me about the weekly charges $125 pw (fixed for life woop de do) and the price of the unit. But said NOTHING about the DMF. For that cost I had to go digging. The DMF is capped at 30 percent after three years. Do those numbers Ferg and Kasper aka couta... 87k per year ie 10 percent of the 870k buy in cost

Yea 870k buy in cost is lower than many villages obviously. Though all you get for the money is a right of occupation not much different to a tenancy. I give my tenants a decent offering that costs them 20k per year not 87k per year. I liken the RV 'purchase price' similar to a bond that a resi tenant would pay except for the fact it's about 400 times higher.

I wont be surprised to get criticized for my views but you have to admit that the retirement industry has done very very well out of the pensioners.

Oops - just to help us understand - do you offer your tenants for $20k per year for the first three years a lifelong right to stay in your premises and do you stop charging them after three years?

Do you offer your tenants the free use of a bowling green, a gym and a swimming pool in front of their door? Do you offer them social facilities, entertainment and security / protection not just in case of e.g. a pandemic?

I assume the answer to all questions above is no - so, why do you spread this garbish comparison all over this thread? It is not comparing apples with pears, it is comparing the price of a 1 kg dog roll (or Kiwi luncheon) with the price of a licence to eat for the rest of your life in a fine restaurant.

And yes, attacking other posters based on their previous history without even revealing your previous penname tells us a lot about you. Anything you have to be ashamed of?

[Ferg]

Retread: anecdotes don't trump facts.  I know nothing about your anecdote and whether you were in the same "catchment" as the Awatere facility and if the property you looked at had the same facilities, neighbourhood and outlook etc.  If you want to see an anecdote that goes the other way, check out the OCA St Heliers development.  Let's put anecdotes aside and I recommend you read the presentations that accompany the periodic reports.  There is a lot of useful information.  OCA have published affordability stats previously and there were often gripes on the other forum about OCA prices being too cheap.

Also, if you think residents have an issue with the DMF then you don't understand why residents choose this option.  I recommend you research it some more.  Yes it might not make financial sense compared to various alternatives, but everyone has their reasons and thousands of such aged residents around the country have chosen this option.  And as you have found out the DMF is a very attractive reason for investing in RV stocks; there is a snowball effect as properties turn over at higher prices on an expanding development base.  This provides an increasing revenue base to cover costs with the added benefit the capital is recycled into new developments.  Yeah not so financially good for the tenant but that is their choice.  RV companies have done well out of these arrangements, but the residents also get something for their money - it is not a one way street.

[Retread]

Oops - just to help us understand - do you offer your tenants for $20k per year for the first three years a lifelong right to stay in your premises and do you stop charging them after three years?

Do you offer your tenants the free use of a bowling green, a gym and a swimming pool in front of their door? Do you offer them social facilities, entertainment and security / protection not just in case of e.g. a pandemic?

I assume the answer to all questions above is no - so, why do you spread this garbish comparison all over this thread? It is not comparing apples with pears, it is comparing the price of a 1 kg dog roll (or Kiwi luncheon) with the price of a licence to eat for the rest of your life in a fine restaurant.

And yes, attacking other posters based on their previous history without even revealing your previous penname tells us a lot about you. Anything you have to be ashamed of?

"I assume the answer to all questions above is no - so, why do you spread this garbish comparison all over this thread?"

Good morning to you too BP I did not expect so much spite from you.

Does this help?

https://www.trademe.co.nz/property/residential-property-to-rent/auction-3680230334.htm

Perhaps you could back up some of your own assertions

"

[Basil]

^^^^   Looks okay to me except the no pets part.  (Its no deal if I can't have a Beagle).

No question the squeeze has started to happen, (the price difference between what people can sell their homes for after real estate agents commission and legal fees and the cost of an independent living unit in a high quality retirement village.

The squeeze is being fueled by rampant construction cost inflation running at ~ 20% per annum and real estate down by about 10% in the last 7-8 months.  If these trends continue like I think they will this issue will become more of a problem.

RYM with their notoriously high priced units are most exposed in my opinion, see earlier post #21 in this thread.

[Whome]

BP - UBS says HPI explains 34% of retirement of share price performance .... but you already knew that it wasn't a one to one relationship

Over time the relationship shown inYou cannot view this attachment.  chart below

If too much 'noise' for ypur liking just ignore it

You cannot view this attachment.

Great graph Winner. Similar co-relation to how net migration figures used to track house prices. But influence factors change. Yours now more relevant. After all what we seek is a co-related confirmation that we are tracking in the right direction -unrealistic for both to track exactly the same.. enough for me to say the trend is my friend.