Retirement village operators

[davflaws]

The sad fact is that there are a few folk who are in support of such a short-sighted & envious ideology. (State taxing & redistributing citizens wealth, savings and capital).

Capitalism is very good at generating wealth and lousy (unless regulated) at distributing it. Rather than labelling the notion of taxation as a short sighted and envious ideology, it might be more useful to accept that we currently have a mixed economy and (notwithstanding your labels) that that is unlikely to change anytime soon.

Then we might discuss how capitalism might be regulated to everyone's advantage, exploiting its wealth generating power, and ameliorating its tendency to produce and increase inequality.

I find Picketty's arguments that unregulated capitalism leads to inequality convincing, and Picket and Wilkinson's (Spirit Level) argument that in more equal societys, Everyone is healthier and happier. It doesn't seem to matter whether the equality is achieved through historical accident (Japan), or redistributive taxation.

The Scandinavians regularly score at the top of international surveys of health and happiness, and have done so by the taxation route - which is the only one available by way of conscious intention.

But perhaps that is a discussion for the "Elections" forum rather than this thread.

[Bjauck]

My apologies if I have incorrectly assumed, from your 'audacious' (and rhetorical?) statements, that you are in support of the State taxing & redistributing citizens wealth, savings and capital. The sad fact is that there are a few folk who are in support of such a short-sighted & envious ideology...

I was suggesting ways the tax base could be expanded to help pay for care costs. I don't see how redistributing wealth and/or capital gains is any more envious than the current redistribution of income or expenditure to others.

[FTG]

I was suggesting ways the tax base could be expanded to help pay for care costs.

Thank you for clarifying that my original 'assumption' re your opinion/position was actually correct.

IMV the financial pressures on the RV sector, will inevitably continue to build. Especially if we persist with the current State (taxpayer) funding model.

Expanding & deepening the tax base further only 'redistributes' the challenge elsewhere; for only a while. Expecting (and by some, demanding) non-users to pay even more towards those who wish to avail themselves of the services & products of any industry (including the RV sector) is sadly destined to fail and create even larger societal divisions.

[Bjauck]

Thank you for clarifying that my original 'assumption' re your opinion/position was actually correct.

IMV the financial pressures on the RV sector, will inevitably continue to build. Especially if we persist with the current State (taxpayer) funding model.

Expanding & deepening the tax base further only 'redistributes' the challenge elsewhere; for only a while. Expecting (and by some, demanding) non-users to pay even more towards those who wish to avail themselves of the services & products of any industry (including the RV sector) is sadly destined to fail and create even larger societal divisions.

I am relieved we agree on the meaning of “could” and that you presumably canvass various possible solutions to a developing crisis too. The current NZ taxation system is highly regressive and highly redistributive from income earners.

Under your “user pays”, for those who currently receive a care subsidy, what would be their future? Would you extend user pays to medical care too? If not, why not?

[FTG]

Under your “user pays”, for those who currently receive a care subsidy, what would be their future? Would you extend user pays to medical care too? If not, why not?

I can sense our discussion is starting to permeate into areas other than the subject matter of this thread = "Retirement Village Operators". I would invite you to ask these questions on a more suitable thread, so that we don't brass off other thread participants?

It does seem that we do have some common ground in regards to recognising the growing challenges that society generally, and of course RV operators themselves, are going to have to confront. When it comes to having a sustainable funding model (whilst maintaining an acceptable quality level of service/product), IMV we seem to keep 'kicking the can down the road'. Hoping that either the growing challenge will magically disappear, or that we will just keep throwing (indebted) monies at it and 'future taxpayers' will happily pick up the tab.

[Bjauck]

I can sense our discussion is starting to permeate into areas other than the subject matter of this thread = "Retirement Village Operators". I would invite you to ask these questions on a more suitable thread, so that we don't brass off other thread participants?

It does seem that we do have some common ground in regards to recognising the growing challenges that society generally, and of course RV operators themselves, are going to have to confront. When it comes to having a sustainable funding model (whilst maintaining an acceptable quality level of service/product), IMV we seem to keep 'kicking the can down the road'. Hoping that either the growing challenge will magically disappear, or that we will just keep throwing (indebted) monies at it and 'future taxpayers' will happily pick up the tab.

I would have thought responsibility for and level of funding of hospital level and of rest-home level care would be most definitely on topic. However this particular discussion has probably run its course.

[justakiwi]

You are the one that took it way off course.

I can sense our discussion is starting to permeate into areas other than the subject matter of this thread = "Retirement Village Operators".

Way to late for that.

I would invite you to ask these questions on a more suitable thread, so that we don't brass off other thread participants?

[Greekwatchdog]

Column in the NZ Herald today list of 10 unfair practices. https://www.nzherald.co.nz/business/ Comments from the big 5 and I am happy with their response. So I am not worried about Govt Review.

[Greekwatchdog]

Montgomerie-Ibbotson Aged Care Pricing Index (ex For Bar)


Another tough month for the aged care stocks, down between -10% and -15%, has likely been driven to a significant degree by Ryman Healthcare's (RYM) capital raise. We think the sector represents good value at current prices, but what could act as a catalyst? RYM addressing its balance sheet and Summerset (SUM) reporting a strong full year result, along with guiding to a strong start to 2023, has clearly not been enough. In order for a meaningful re-rating to occur we probably need to see the bottom of the housing market in nominal terms, something that could be a while away. Our latest Montgomerie-Ibbotson (MI) aged care pricing index points to continued flat pricing on a monthly basis, while year over year unit price inflation has declined to ~+3%. We estimate that the incremental buffers built up during the strong house price inflation in 2020 and 2021 has been consumed. Looking ahead, we expect the aged care operators will be able to hold prices largely stable despite likely continued falls in house prices. The key thing to look out for will be a pick up in housing turnover.


Our MI index remains flat
The deceleration of growth in our MI index has continued. Year-on-year growth for our MI-aged care pricing index to February has fallen to only +3% and the index has been flat over the last six months. Over the last year our index has RYM and SUM's unit price inflation at +3% and +2% respectively, and both flat year-to-date, with similar price stability seen for both serviced apartments and independent living units. SUM has historically implemented biannual pricing increases, however, as we expected, no substantial changes were observed over the last three months as would have been under a continual biannual increase. Our index now utilises nearly 5,500 data points, giving us confidence in understanding the pricing strategies of the large operators.


Pricing buffers consumed by falling house prices
The fall in New Zealand house prices over the last year has erased our 'COVID pricing buffer', which represented the gap between growth in the REINZ local House Price Index (HPI) and the increase in our MI index since January 2020. The latest REINZ data for February showed Auckland house prices have fallen -22% from the November 2021 peak, and prices for the rest of New Zealand and New Zealand as a whole have fallen -12% and -16% from their respective peaks. With aged care operators moderately increasing prices through this period our incremental pricing buffer has entered negative territory for both RYM (-1%) and SUM (-4%). Strong demand, as indicated by SUM at its FY22 result, should make it possible for operators to keep prices largely flat.


Low turnover and elevated days to sell are no signs of a "proper" bottom in house prices
While the REINZ HPI indicated New Zealand house prices rose +0.1% in February versus January, sales volume (down -31% year over year) and days to sell (currently 54 days versus its long run average of 38 days) deteriorated further. We do not believe this recent small house price increase is a sign of a bottom in the New Zealand housing market. As shown in Figures 8 and 9, days to sell and number of houses sold have historically led house price movements. We wait for a turnaround in these metrics before looking more favourably on an HPI increase.


They all rate "Outperform with 12 month target as follows...



OCA = $1.30
ARV = $1.80
SUM = $11.10
RYM = $7.85

[percy]

Thanks for posting Greekwatchdog.Very interesting.
A lot of possible upside in this sector.
I have put the % upside from current share price for each company.
OCA = $1.30............78%
ARV = $1.80.............74.75%
SUM = $11.10...........29.06%
RYM = $7.85.............55.44%