SUM - Summerset Group

[Beagle]

^^^^ What you've suggested above is certainly an aspect of this. They have been building more multi level units at Hobsonville and Ellerslie and its a tough sell when development is going on all around you. SUM's holding costs are not huge as their recent 7 year bond offer clearly showed pitched at just 4.2% per annum. They'd probably rather sell units at premium prices when the multi level construction is complete than discount them to shift units in the middle of a Sahara sandstorm.

On another topic its good to see them buying a decent chunk of land in the fast growing Papamoa area. I for one am happy to see them buy there rather than expanding in Australia at present what with their falling real estate market over there and Royal commission of enquiry ongoing. https://www.nzx.com/announcements/324901

One thing you have to take your hat off to SUM is when they say they are going to build XYZ units in any given year they do exactly that, they have never once failed to meet a build number target since listing nearly 7 years ago. That's no easy feat in this construction market and their development margin has shown excellent growth over the years. I think I will hang in here and trust management know what they're doing. I think they have earned my trust over the years.

[Gecko]

One possible explanation is that management are not concerned that there are a few more empty units given the very high development margins. They could probably knock 10% off the price and fill the units but choose not to?

Knocking 20K off for Casebrook Village Christchurch for sign up by 23rd October. Average unit price 520-550K.

[Beagle]

Knocking 20K off for Casebrook Village Christchurch for sign up by 23rd October. Average unit price 520-550K.

Interesting. Client told me yesterday Fletcher residential knocked $30K off an already modestly priced unit $610K down to $580K because that was all the bank would lend his son.

As we saw on the block auctions the other night the market is definitely a bit tighter than it was. A few years ago I made enquiries of the REINZ and found out that the average difference between asking price and buy price of homes nationwide was 6%, i.e. 6% negotiation margin. Now days with so many homes sold by auction and so many listed without a price its harder to gauge but I think we could be headed back into a more normal environment where buyers and sellers need to negotiate more to find common ground. Perhaps the days of retirement villages naming their own terms in regard to price and take it or leave it are over ?

[artemis]

..... A few years ago I made enquiries of the REINZ and found out that the average difference between asking price and buy price of homes nationwide was 6%, i.e. 6% negotiation margin. Now days with so many homes sold by auction and so many listed without a price its harder to gauge but I think we could be headed back into a more normal environment where buyers and sellers need to negotiate more to find common ground. Perhaps the days of retirement villages naming their own terms in regard to price and take it or leave it are over ?

TradeMe Property Price Index includes average asking prices and we also have data on REINZ median actual selling prices, nicely presented on interest.co.nz. Interesting but not apples and apples. (TradeMe could probably provide median listing prices but don't as far as I could see.)

A quick comparison. Because of the time lag between listing and selling I have used May listings as the first number and August selling as the second number. Note that they are indicative only as average and median are different, obviously actual is better than listed, and IMO median is better than average.

There's a lot more info in each of the reports, including many more locations.

Auckland $918650 $852000 (big difference)
Wellington $589,600 $590000 (no difference)
Christchurch $366550 $425000 (but note the median is for Canterbury not just Christchurch)

(This is displacement activity, supposed to be doing the GST return.)

[minimoke]

On another topic its good to see them buying a decent chunk of land in the fast growing Papamoa area. I for one am happy to see them buy there rather than expanding in Australia at present what with their falling real estate market over there and Royal commission of enquiry ongoing. https://www.nzx.com/announcements/324901

I've got some tough choices in the future. Retire to Papamoa or Napier. Both get a tick as a village location from me.

[winner69]

Knocking 20K off for Casebrook Village Christchurch for sign up by 23rd October. Average unit price 520-550K.

H1 report says they made about $150k underlying profit per sale (on average over new and resales)

If that is typical that $20k could affect ongoing uderlying profit would by 13%

[Gecko]

Hi Winner, they were definitely discounting new units at Wigram Christchurch last year but from memory it was not quite to this level. Still have sales material, but not to hand, so will seek it out and confirm.

Update: Can confirm that the 20K discount offer seems to be a regular promo. Sales material from this time last year and for period 23 May to 31 July this year.

[minimoke]

H1 report says they made about $150k underlying profit per sale (on average over new and resales)

Profit is the gain made when a deal between willing seller and buyer is complete.

We dont necessarily know starting / advertised / first offer price.

[Beagle]

I've got some tough choices in the future. Retire to Papamoa or Napier. Both get a tick as a village location from me.

I have about 20+ years to make up my mind, plenty of time to mull it over but the north facing waterfront homes at Hobsonville are very nice...and you'd want them to be at $1.6m 132 sq metres and a double garage...not too shabby I tell ya !

[iceman]

Start of a new week and hopefully the mood on this thread will lighten up a little and people become more positive again.

I´ve just read an article on lack of funding for Alzheimer´s research and liked this bit " the World spends more on boob jobs and Viagra than on Alzheimers research. So in 2040, the elderly will have perky tits and stiff cocks buty no fu..ing idea why"

Couta1 I hope your industry is adjusting plans for different accommodation requirements for that eventuality. I´m looking forward to being there in 2040 :-)