It seems to be a frequent presumption by some that there is some magical correlation between the property market and the aged care retirement market.
Sure elderly people sell property to buy aged care and security, but that aged care and security is a different service based market.
We don’t value SKL on the property value of their factories, nor AIA on the property value of their runways. Sure swings and round abouts in property valuation will alter book values, but not necessarily the market cap significantly. This is the reason why aged care retirement stocks are listed by the NZX in the ‘service sector’ and not in the ‘property sector’.
The respectful oldies will still require aged care and/or will still require security in knowing they have access to aged care if the property market takes a dip. The demand doesn’t evaporate and the surplus between the average house price and the cost of an aged care contract is quite large.
If an elderly person gets a lower price for their property it is much more likely they would continue their care and security plan, and then perhaps reallocate the surplus accordingly. Health, wellbeing and security in knowing they are going to be cared for is always going to be the top priority for the elderly.