SUM - Summerset Group

[iceman]

A great matter of fact type post Percy. I agree with you.

[Lewylewylewy]

I'm this authors opinion, the factors that affect this SP are property price, ability to make money without capital gains from property, future demand and market sentiment.

Obvious.

The questions we should be asking are also therefore obvious.

1. Projections for future of property market. Helps value company.
2. How much would they make in a stagnant property market? How would this affect the PE? Helps value company.
3. What is the future demand, given the changing spectrum of age range of the populace vs population growth of nz. Helps value future of the company (which reflects current value, somewhat).
4. How will this effects market sentiment? Helps predict loss and profit opportunities.

Hope that helps anyone feeling confused. At least something good had come from all this carnage, it's ended the discussion about whether house price effects the value of the share.

Personally, I'm watching House prices like a hawk, doing my sums (help / opinions would be great), researching she ranges and growth stats (which also affect property market predictions) and keeping an eye on the news and forums for opinions.

[percy]

I think the people who go on about the affect of property prices on this sector have never had to put Nana into care.
Nana's health has never been affected by property prices.Never will.So watch Nana's health and her friends'.They are getting older every day.
Then to confirm this, read what SUM and RYM say about the affect property cycle prices have had on their earnings during the past 20 years,NONE,bearing in mind the huge increases of late of people reaching the age of 70.This is set to further increase over the next 20 years.This sector is the sector that has the biggest tailwinds,which will reach hurricane force in a few years.No stopping it.

[Lewylewylewy]

But when prices go up, they make more money and the business is worth more. No?

[percy]

They make money clipping the ticket.Each part of the ticket just keeps getting bigger.
More villages,more development margin,more villages more resales etc.
RYM are now issuing big tickets in Aussie.I expect SUM will too at some stage.
Think about the biggest legal ponzi scheme,and you will come up with SUM and RYM.Both will most probably double within the next 5 to 6 years.
Go and look at a RYM or SUM village and then think about resales.There will be resales going on, long after you and I are dead.

[BlackPeter]

I think the people who go on about the affect of property prices on this sector have never had to put Nana into care.
Nana's health has never been affected by property prices.Never will.So watch Nana's health and her friends'.They are getting older every day.
Then to confirm this, read what SUM and RYM say about the affect property cycle prices have had on their earnings during the past 20 years,NONE,bearing in mind the huge increases of late of people reaching the age of 70.This is set to further increase over the next 20 years.This sector is the sector that has the biggest tailwinds,which will reach hurricane force in a few years.No stopping it.

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.

[percy]

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.

Forget property prices.Just think of falling off a mountain.Your decent may be slowed down if you hit a bluff,but just slowed down ,not stopped.
RYM and SUM at present have strong tailwinds which I said were developing into hurricane forces.Any slow down, such as another GFC, or the price of fish in Zanzibar, will be just "the lull before the storm."

[winner69]

Percy, you are absolutely correct related to underlying earnings. However - if you look at e.g. RYM share price after the GFC - it dropped, and this was (in my view) due to stagnating property prices (these annual revaluation gains have been smaller or even negative).

So - yes - none of these companies will suffer due to lack of demand if property prices go down, but their valuation on the balance sheet might - i.e. it is possible the SP comes down together with property prices. What we see at the moment is just markets unsure how the property market will develop.

Discl: holding and happy to sit that one out.

It was market sentiment that caused the RYM share price to fall after the GFC - their ongoing profitability was rewarded with a lower PE by the market.

RYM, SUM et al will continue to build new units and resell older units and make heaps of money - it's just a matter of what punters want to pay for those earnings.

Over the last 3 years we have seen indecent rises in property prices .....and RYM share price gone nowhere. Could one say RYM share price doesn't move with property prices? Or could one say RYM is a dog stock?

Spose moral of story is either trade (short to medium term) the market sentiment or just put your RYM shares in the bottom drawer and don't fret about the ups and downs of the market and get rich over time.

[Bjauck]

...I should also point out the idea of offfering help to people to stay in their own home sounds great,but any one who has experienced this, will know that Nana spends her time talking to the cleaner/care giver,and making him/her a cup of tea and so the work does not get done.Then relations are left to worry whether Nana left the front door open, and the stove on when she went to bed,!...

Interesting to hear your experiences. Much depends on individual circumstances. How much social and familial support, the degree of public and/or private support that would be available (or that they could afford) should the Senior stay in their own home. I know of many (without serious conditions) who have wanted and have been able to stay comfortably (afaik) at home until the end.

However many kiwi seniors do have skype families - families who have migrated for higher wages, prospects or affordable housing. So this could also limit their options.

[percy]

Interesting to hear your experiences. Much depends on individual circumstances. How much social and familial support, the degree of public and/or private support that would be available (or that they could afford) should the Senior stay in their own home. I know of many (without serious conditions) who have wanted and have been able to stay comfortably (afaik) at home until the end.

However many kiwi seniors do have skype families - families who have migrated for higher wages, prospects or affordable housing. So this could also limit their options.

My mother lived in a retirement unit in Buderim north of Brisbane.My brother lives in Hobart,while I live in ChCh.
As per most oldies she told huge lies.
Yes I shower every day......lie .shower had dust on the floor.
Yes I cook myself meals..... lie,fridge only contained food past its use by date
Yes I clean my unit.It is spotless.lie,Vaccum needed emptying twice.Small unit.
We have had similar experiences with my wife's mother and her aunt and uncle.
They tell you and assessors every thing is fine,but unless you visit them, and check it out for yourself it is all lies.
Then the worry is about their safety,oven left on,heaters left on,doors unlocked,falls etc conmen handymen.
Better not mention how she nearly collected cyclists when driving, because she had poor vision in her left eye.
It is exactly the same for people living in Auckland, who have old parents living out of Auckland.
ps.Mate of mine found over 50 pair of his mother's undies in the wardrobe,before he put her into care.She just used to throw them in there and go out and buy new ones.!
I am talking about nice respectable people who lived in good houses,who just happened to grow old.