Watch developers pile into Kiwibuild... They just raised their price limits to $865,000 and govt guarantees the sale of the whole development (i.e if no one applies, govt buys it)
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That's untrue regarding sale of the whole development.
The underwrite is agreed on specific homes which most of the time are only a portion of the total delivery in a development that must be sold to KiwiBuild eligible buyers and the agreed buy price is at a discount.
Unsure what the market is going to be like as market values meet parity with price caps but all homes for the last 18 months have sold out in ballots as buying off the plans.
Apologies, i didn't word that well. Yea they guarantee the sale of the Kiwibuild and Kainga Ora portion of the development
This was at the old $650,000 price cap, They don't look like such great value anymore at $865,000
I agree, it will be interesting to see how many applicants there are to the new ones just released.
Anyway... back to OCA
I live in West Auckland. Almost every edition of the NZ Herald, Sunday Star and our local Western Leader newspaper delivered to our home comes with a glossy leaflet/brochure from one or other of the (many) retirement villages in our wider area touting the availability of villas, apartments, serviced apartments etc. In more than a decade I have never known such a cumulative blizzard of advertising, and I am seriously starting to wonder if sales have got much harder to achieve despite the demographic tailwind. The build rate of the larger players is at least as high as it has ever been, but the general housing market has clearly entered a price decline/lower sales volume phase not encountered in NZ for quite a long time and it could be showing!
and summerset doing specials on there units all add's up to competition is heating up in a slowing market
And todays NZ Herald says the Bupa business is under review for divestment, with falling profits from a squeeze in margins. This Government has definitely not invested in the aged care sector so not surprising really. Regular reports of smaller owner operated rest homes all over NZ closing because can't find staff and care subsidies inadequate. Another Andrew Little failure.
The current government have totally lost the plot. They have raised caregivers wages in the aged care sector and it was necessary, now do the same for doctors, nurses and specialists in the aged care sector for better longterm incentives for companies to build more villages.
The bigger the entity, the bigger the rewards for the directors and managers.
Bupa is an excellent opportunity for a relatively smaller player like Oceania or Arvida to bulk up.
A heavily discounted rights issue (as long as it is pro-rata) would allow a player like Oceania to raise the necessary capital.
Trying to build up facilities is a much longer road to take.