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07-10-2014, 06:14 PM
#2481
Here is a suggestion, why dont Newguy and Roger write a weekly newsletter for residents. Im sure their negative and depressing tomes would soon have residents losing the will to live, taking years off the average tenure
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07-10-2014, 06:54 PM
#2482
You really wonder about some people
Originally Posted by NewGuy
Got a pathetic response to my email, which I directly replied to with the following:
Thanks for the response.
As you can hopefully appreciate, the resale numbers do not make sense to anyone that understand the industry well, which I do. Villages generally reach maturity by about 10 years, and provide a fairly constant supply of resales thereafter. Since you have several villages, volatility should largely even out. I have modelled the expected resales for your portfolio of villages (using models that I built as evidence before the high court) and reach an estimate of about 46 per quarter for 2014. 31 is significantly lower than this, and the only rational explanation is that tenure is increasing. Can you please therefore confirm the current and past average tenure of residents? Surely this is not commercially sensitive information.
Many thanks
xxxxxx
I guess the Summerset residents have not looked at your models and thus have not agreed upon a roster for when they move on.
Best Wishes
Paper Tiger
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07-10-2014, 06:56 PM
#2483
Originally Posted by forest
777 or is it possible because of a lack of dementia facilities (the hard part of running retirement villages) the older people (and their families) prefer to look for villages where they have those options. Remember if it looks that only one half of a couple might need dementia care in the future, the family is likely to appreciate specialised dementia care.
Consequently the units still get occupied but the average entry age in a SUM village could be lower then say RYM.
There is no guarantee that dementia will happen, so unless it is starting to show before deciding to purchase I believe people will just deal with it when and if it happens. Both my parents always said they wanted care(not necessarily dementia) facilities when they moved into a village, but one died before moving and the other lasted until 88 yrs and didn't need it. I have heard the figure that only about 15% of old people will need such care. Personally I would decide what village I wanted on the best place to live while fit and able. You can always find somewhere to go if and when the need arises. Both my inlaw's needed dementia care and that was found without too much difficulty. And they where good facilities luckily.
Not sure whether I have answered your question. Early dementia probably.
Last edited by 777; 07-10-2014 at 07:34 PM.
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07-10-2014, 07:18 PM
#2484
Originally Posted by 777
There is no guarantee that dementia will happen, so unless it is starting to show before deciding to purchase I believe people will just deal with it when and if it happens. .
I agree that by far the majority wont make use of and might not even take it seriously into account when choosing a place to stay for retirement.
However there are also very independent and pride elderly who stay in the community for as long as possible. The day arrive that family realises something needs to be done because one of the couple is showing signs of dementia and this will be taken into consideration. The average age of those cases is likely higher than the average age of entry into retirement villages.
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07-10-2014, 07:36 PM
#2485
Originally Posted by forest
I agree that by far the majority wont make use of and might not even take it seriously into account when choosing a place to stay for retirement.
However there are also very independent and pride elderly who stay in the community for as long as possible. The day arrive that family realises something needs to be done because one of the couple is showing signs of dementia and this will be taken into consideration. The average age of those cases is likely higher than the average age of entry into retirement villages.
You are right and that would help balance out some of those going in earlier.
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07-10-2014, 07:56 PM
#2486
Originally Posted by NewGuy
1. No resales within the first four years and a 1/6th chance of resale over the next 6 years (so that each village fully turns over once in the first 10 years, with an average age of 7.5 years)
2. From year 11 onward, each unit has a 1/8th chance of being resold.
Applying this to the historic rate of development gives me an expected resale figure in 2014 of 185, or about 46 per quarter. 31 is a lot lower than this, and very hard to explain IMHO.
Average over the last 4 quarters has been 43 9including the 31 number). The 31 stuffed the trend because the prior 4 quarters averaged 47.75.
Since achieving 50 and 51 in the last 2 quarters of last year the numbers have been rather weak, averaging only 39 per quarter this year
Seems something has happened in 2014 after looking so promising in 2013
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07-10-2014, 08:16 PM
#2487
Member
Originally Posted by Harvey Specter
My understanding was the average 7 year term would include those going to higher care facilities so you cant add in that extra 14.
Another factor for a operator growing the number of units they have, you cant expect many resales from villages built in the last (say) 4 years so calculating 1855/7 will be misleading - you need to look at the weighted age of the villages.
Yep bang on HS.
Here's the total number of units for the last 7 years (2007 - 2013)
921, 983, 1109, 1272, 1364, 1486, 1855
So over this period:
921 have been available for 7 years
62 have been available for 6 years
126 have been available for 5 years
163 have been available for 4 years
92 have been available for 3 years
122 have been available for 2 years
369 have been available for 1 year
So the expected number of deaths this year should be
(7/7)x921/7 + (6/7)x62/7 + (5/7)x126/7 + (4/7)x163/7 + (3/7)x92/7 + (2/7)x122/7 + (1/7)x369/7 = 183
So in a quarter we should expect 183/4 = 46
We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12
This gives a figure of 38 re-sales in a quarter based on their current stock.
The figure they have is 31 so yes a bit down (18%) on what one would expect. However, the next quarter could easily be higher.
If I had the time I would compare the quarterly results going back to the weigthed average above. That would tell you if there has been a step change.
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07-10-2014, 08:57 PM
#2488
Member
Originally Posted by NewGuy
that's exactly the problem, though. They've already told us that the stock available for resale at the beginning of this quarter is even less than at the start (27 vs 31/32), so there is definitely some sort of underlying trend playing out here.
I'm more concerned about ordinal - not specific cardinal - trends. Doesn't feel right to me.
NG, that's how population statistics work. They have low stock because not so many people have died. In 2013 more people died (bad flu year, who knows), meaning lots of stock, leading to high re-sales. But now there are a lot of relatively young tenants holding things up as it were. If the re-sales were continually going up without an ebb and flow (barring increased units) then there would possibly be something criminal going on.
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07-10-2014, 09:30 PM
#2489
Goldie, I not thinking very straight so forgive me if a stupid question
When you say 'We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12' wouldn't those 2/12ths you knocked just roll into the next year .....so no need to discount?
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07-10-2014, 09:40 PM
#2490
Member
Originally Posted by winner69
Goldie, I not thinking very straight so forgive me if a stupid question
When you say 'We should knock a few off for the renovation and marketing required between occupants - I'm going to say a month for renovations and a month for marketing the resale. So let's multiply this very roughly by 10/12' wouldn't those 2/12ths you knocked just roll into the next year .....so no need to discount?
'
The logic is we have a death rate per year based on current stock. However the death rate is not converted 1 to 1 into re-sales rate for a given year (due to the times spent renovating and marketing).
The following year we recalculate the 7 year weighted average based on stock numbers, find the expected death rate, and then again apply the 10/12 conversion rate.
We are only applying this 10/12 to the expected deaths in a year. Next year - different deaths.
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