SUM - Summerset Group

[minimoke]

- they have not been able to sell one single section since July 2018!

Any reasons given for the lack of sales?

[Balance]

well, your cyristal ball regarding mPg was pretty bad. Are you still buy mpg?
btw, nobody can predict future right? that's what i learned from this forum.
"when the price goes down everyone predict it go down further, and vice versa."

I am very relaxed about my MPG holding (given my entry price and the story I am following through on) just as I have been with my Serko.

Nobody can predict the future - up to each person to forecast and predict, and plan their investments accordingly. Some will be right, some will be wrong - takes place everyday with some investors buying and some selling depending on their views.

[BlackPeter]

Believe you me - an interest rate cut is the best indication you can ever get that the property sector is in big trouble.

Banks pull the plug on developers because they cannot top up with equity to maintain acceptable leverage ratio and/or pay interest due to lack of sales.

If you want an example of how quickly things can turn in the real estate market for developers, there's a huge multi-billion dollar housing project (incorporating a massive retirement village) in South Auckland (developer has spent over $350m so far developing the infrastructure and sections for sale according to NZ Herald) - they have not been able to sell one single section since July 2018! Fortunately for the developers, there is no bank debt so they are okay and will survive. The billion dollar profit will not be there anymore however.

Well, it worked last time with QE and negative interest rates. Not really great for the economy, but property (as well as stock-) prices went through the roof.

You are saying - this time will be different - aren't you?

Why?

[Balance]

Any reasons given for the lack of sales?

Despite the BS about lack of supply, there's a massive oversupply of sections and new houses in some parts of Auckland - Takanini, Flatbush, Karaka, Pokeno, Papatoetoe etc etc.

So there's no appetite for developers to buy new sections.

Prices are going to have to drop some way on the existing stock before the demand kicks in.

[Balance]

Well, it worked last time with QE and negative interest rates. Not really great for the economy, but property (as well as stock-) prices went through the roof.

You are saying - this time will be different - aren't you?

Why?

Overseas buyers are not going to be around this time round.

Then, there's Kiwibuild.

[winner69]

Overseas buyers are not going to be around this time round.

Then, there's Kiwibuild.

Are Kiwibuild branching out into building affordable retirement villages

Would get thr oldies out of existing homes and free them up for younger first home buyers

[Brain]

All those places (Takanini etc )are way out in the Sticks comparatively speaking.They should be cheap to compensate for the cost of getting to work.

[Balance]

People dont like the message so are shooting the messenger.
I was trivialised too Balance, when i pointed out this possibility last year, with comments like" SUM or OCA is not a property company".

Really appreciate you sharing from your field of knowledge and experience with your finger on the pulse.

I dont know how to verify 3 to 5 years or how far the property cycle will drop though, but i believe drop it will.
Cant see it dropping like australia though as the housing stock is in oversupply there is my understanding plus many other metrics.
I plan to maintain my holding in OCA through this cycle atp having a low 79c entrypoint (for you know who.

Another thing that concerns mea little is how the Govt can keep funding the care villages with this avalanche of elderly people coming, will margins drop/tighten for the care facilities for one, getting enough trained quality staff another.

Sadly, one cannot give one's views it seems without being branded as a scaremonger, downramper, with ulterior motives, working for the competitors etc these days.

Information is so crucial to making good decisions and I for one, always look for opinions which are out of sync with the general flow - 8 times out of 10, they will be incorrect but the 2 times they are correct, they are extremely correct!

The property cycle in NZ is typically 10 years - 5 on the up, and 5 on the down. No need to believe me - just check with any good property observers. This up cycle one has lasted a little longer than previous up cycle - 6 .5 years (by my estimate) so expect at least 3.5 years down cycle imo.

Like you with your OCA, I have Metlife which I am happy to keep - entry price $2.15. No panic here.

[Balance]

Are Kiwibuild branching out into building affordable retirement villages

Would get thr oldies out of existing homes and free them up for younger first home buyers

Now, isn't that a jolly good idea!

If Labour wins another term, you could well be prophetic!

[BlackPeter]

Overseas buyers are not going to be around this time round.

Then, there's Kiwibuild.

You sure the 30 houses Labour might be building per year will make such a big difference ?

Overseas buyers - lets see. Kiwi dollar still pretty strong (which is an indication that overseas buyers are still in).

As well - what to you think is going to happen with all the Kiwisaver funds which will get a big boost with increased minimum wages et all? Are the respective managers putting these funds under their mattresses or are they going to invest them? Hmm - difficult.

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