KPG - Kiwi Property Group Limited

[Habits]

I'm not a chart / TA guy, but KPG closing at 1.27 after hitting 1.28 earlier today seems quite bullish - highest levels in 10 weeks.

Was watching.... suddenly took off mid avo and volume went up by 500k. FY2021 due in a month, will be a good result

[X-men]

My understanding.....full year AFFO will be 5.50 to 5.6 cents...oct 2020 to March 2021...?

Or completely full year from April 2020 till March 2021?

[epower]

Property values (thus cap rates) and interest rates are the opposite ends of a see-saw. That is why the best time to buy real estate, particularly housing, is when interest rates are high.

Hi Fungus Pudding,

Can you elaborate on this please. Few questions;

- If interest rates are high people can afford less house so house prices less?
- How have interest rates affected REITs over the past 10-20 years compared to wider stock market?
- If the case is interest rates are low now and REITs over valued/low yield what’s the alternative investment option?
- When in the interest rate cycle would you invest in stocks in companies (eg mainfreight, Auckland airport) opposed to REITs
- Do you borrow via residential loads to invest in REITs and how would this affect your timings of debt pay down or investments?

Anything else I’m missing?

[fungus pudding]

Hi Fungus Pudding,

Can you elaborate on this please. Few questions;

- If interest rates are high people can afford less house so house prices less?
- How have interest rates affected REITs over the past 10-20 years compared to wider stock market?
- If the case is interest rates are low now and REITs over valued/low yield what’s the alternative investment option?
- When in the interest rate cycle would you invest in stocks in companies (eg mainfreight, Auckland airport) opposed to REITs
- Do you borrow via residential loads to invest in REITs and how would this affect your timings of debt pay down or investments?

Anything else I’m missing?

Asset prices will rise and fall with the cost of money. Prices and interest rates are the opposite ends of a see-saw. If you buy a property when interest rates are 2% it will be cheap to own and buyers will compete for it. Then if interest rates rise to 24% - the same buyers will simply not be able to afford the price they once could. Result is price will fall. That's the range of mortgage interest rates rates we've seen in NZ since the late eighties. IOW the price is one factor in owning an asett - interst rate is the other. That's the first point. Second question is not one I can answer as I know nothing about the stock market. I do hold a reasonable quantity of REIT shares but nothing else apart from funds in Milford assets - just to see what happens.
I'm not much use with your questions, sorry to say. I'm just a burnt out old real estate investor, who, having got sick of tenants has bought into REITs aand property syndications asI have got rid of most of my investment properties. I don't borrow at all, although that's generally not a sensible policy, but I've been there and done that and somehow can't be bothered anymore. Your last point about borrowing on residential to invest elsewhere - I think the govt. has put that one to bed with deciding to apply income tax to an outgoing (mtge-interest) which is about as dopey as Bill Rowling's speculation tax. I hope that provides some answers but feel free to ask more about any point.

[Habits]

Hi Bull... would you mind doing an analysis on KPG. I see a breakout at 1.25 from flag formation. However there is no flag pole (gap up) and the price has been in a rut/trading range for 6 months between 1.32 and 1.12. I would love to hear your TA thoughts.

[epower]

Asset prices will rise and fall with the cost of money. Prices and interest rates are the opposite ends of a see-saw. If you buy a property when interest rates are 2% it will be cheap to own and buyers will compete for it. Then if interest rates rise to 24% - the same buyers will simply not be able to afford the price they once could. Result is price will fall. That's the range of mortgage interest rates rates we've seen in NZ since the late eighties. IOW the price is one factor in owning an asett - interst rate is the other. That's the first point. Second question is not one I can answer as I know nothing about the stock market. I do hold a reasonable quantity of REIT shares but nothing else apart from funds in Milford assets - just to see what happens.
I'm not much use with your questions, sorry to say. I'm just a burnt out old real estate investor, who, having got sick of tenants has bought into REITs aand property syndications asI have got rid of most of my investment properties. I don't borrow at all, although that's generally not a sensible policy, but I've been there and done that and somehow can't be bothered anymore. Your last point about borrowing on residential to invest elsewhere - I think the govt. has put thsat one to bed withj deciding to apply income tax to a outgoing (mtge-interest) which is about as dopey as Bill Rowling's speculation tax. I hope that provides some answers but feel freet to ask more about any point.

Great thanks for reply much appreciated

Did you own residential or commercial?

What do you now do with your cash pile from dividends? Do you buy on the dips? Do you buy just NZX REITs or overseas ones too?

[fungus pudding]

Great thanks for reply much appreciated

Did you own residential or commercial?

What do you now do with your cash pile from dividends? Do you buy on the dips? Do you buy just NZX REITs or overseas ones too?

I started with residential in the early 70s. By mid 80s I was right out of residential* - and into commercial and industrial - never in a big way, as I had no income other than my rental stuff right through. Lots of fun but it meant restricted ability to 'tick everything up to the eyeballs' as they say. It also meant learning how to live on next to nothing for a few years. Very educational. Nowadays as I said I just buy into syndicated props. e.g. Augusta, MacKersy properties etc. and REITs. I don't worry about buying the dips (I should but don't watch them closely enough to spot them), I have nothing overseas. As far as spending dividends go - I have a good surplus which I can't really burn up on travel that I had intended for the next few years, I have no debt to reduce, so I suppose I'll put a bit more into REITs. although I do have a special reason for buying into more syndicates. There's quite a few on offer. I like some of the syndicated offerings, but it's all horses for courses; meaning there's a benfit in the REITs as they are PIES. And the difference in taxation between the pies at 28% is worth having as the new top marginal rate is 39% (thanks Labour) Also, because I'm slack, I like the 'set and forget' nature of PIES - no paperwork at all. But no doubt I'll cling to my guiding adage 'keep stacking up income'
While I'm burbling away I'll add the special appeal of syndicated properties for me. That is my estate. Like most of us, I have my fair share of dead-beat beneficiaries to whom I would rather leave a proportional title or two, than too many REITs. The syndicated stuff is far less liquid and I would rather leave someone a bit of income than a bunch of shares they can flog off and blow in six months. Your other question - nowaday I only own one commercial building. It's a retail store with a national franchise tenant which is so easy to manage that the only reminder is a healthy pile of money in my account every month.


*I was young and green when I had a few flats and houses. The trick in those days was to find a vendor who was prepared to leave a bit owing on 2cnd or 3rd mtge - then wind a valuer up to a bit more then the purchase price (that was my equity) and bingo - on to the next one. It was fun. But I was too dam soft on tenants and realised commercial stuff is a different game as far as management goes.
Overall I've done okay out of R.E investing. I have a bit more money than I should ever need, and have avoided the horror of normal employment, having a boss and being told what to do - which never really appealed to me. :-)

[epower]

Good on you Fungus Pudding sounds like you’ve done well for yourself.

Once again appreciate the comprehensive reply

[bull....]

Hi Bull... would you mind doing an analysis on KPG. I see a breakout at 1.25 from flag formation. However there is no flag pole (gap up) and the price has been in a rut/trading range for 6 months between 1.32 and 1.12. I would love to hear your TA thoughts.

hi habit , i agree with you on the range trading. i dont see any flag though. heres a pic of the daily chart


Screen-Hunter-674-Apr-29-03-42.jpg


heres a pic of the 4 hourly shows a nice uptrend from covid lows


Screen-Hunter-672-Apr-29-03-37.jpg


heres a pic of 30 min chart showing the trading range


Screen-Hunter-673-Apr-29-03-42.jpg

short term traders be trading the range
long term holders will be just holding riding the uptrend
if/when the range breaks will entice more buyers/sellers into the stock. direction of the break is to be decided but the slow uptrend favours up at the moment.
fundamentally interest rates going forward and wall st will dictate long term outcomes for price.

good luck

[Habits]

Great thank you, what software do you use.