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  1. #7771
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    Quote Originally Posted by mondograss View Post
    I guess you'd just work it that they pay a lower purchase for the ORA but a higher monthly fee. If it's a choice between that and having a unit empty for years, then yes I can see the argument being reasonably compelling. Time was that local councils had retirement units that they offered out to the low income community, but a lot have been sold off now (at least in Auckland, probably smaller provincial councils still do it).
    That would be a good compromise. I am not sure if they should take up the role of the provision of social retirement housing.

    A hybrid Ora/lease arrangement could be the way to make a retirement village affordable or more appealing to a wider market. I think the retirement villages would be well placed to meet and surpass NZ’s rental housing obligations/regime.
    Last edited by Bjauck; 07-05-2019 at 04:45 PM.

  2. #7772
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    Quote Originally Posted by Bjauck View Post
    I think there is room for the retirement village operators to offer units for rental. There would be group of people who may not necessarily be able to afford, or perhaps want to make the outlay for an ora but who could pay rent out of retirement savings and the sale of a cheaper house.

    .
    It is not the role of private rest home / aged care to provide services for those who cant afford those services. Thats why we encourage people to save for their retirement years.

  3. #7773
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    Quote Originally Posted by Bjauck View Post
    That would be a good compromise. I am not sure if they should take up the role of the provision of social retirement housing.

    A hybrid Ora/lease arrangement could be the way to make a retirement village affordable or more appealing to a wider market. I think the retirement villages would be well placed to meet and surpass NZ’s rental housing obligations/regime.
    I know a lot about rental housing in New Zealand, current and proposed rules. I would be alarmed if any company I owned shares in decided to enter that market. Check out the Residential Tenancies Act, Labour and Greens rental housing policies (and the current consultations under way), and try a sampling of the tens of thousands of Tenancy Tribunal cases every year. Almost all brought by landlords for rent arrears and damage.

    Best for the villages to stick to their knitting and leave rentals to the ever shrinking pool of landlords, and the taxpayer.

    As a general thing, I expect that those planning to buy into a retirement village will have homes at the more attractive end. Attractive to buyers, that is, because more likely to be standalone houses than say high rise studios. So most won't need a hybrid option, though their heirs might!

  4. #7774
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    Quote Originally Posted by artemis View Post
    I know a lot about rental housing in New Zealand, current and proposed rules. I would be alarmed if any company I owned shares in decided to enter that market. Check out the Residential Tenancies Act, Labour and Greens rental housing policies (and the current consultations under way), and try a sampling of the tens of thousands of Tenancy Tribunal cases every year. Almost all brought by landlords for rent arrears and damage.

    Best for the villages to stick to their knitting and leave rentals to the ever shrinking pool of landlords, and the taxpayer.

    As a general thing, I expect that those planning to buy into a retirement village will have homes at the more attractive end. Attractive to buyers, that is, because more likely to be standalone houses than say high rise studios. So most won't need a hybrid option, though their heirs might!
    Well said artemis.

  5. #7775
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    Reviewing all the economic stuff that impacts the housing market and putting them all into a matrix and assessing what usually happens to the housing market when an indicator changes I reckon we could see the number of house sales over the next year increase by more than 10% and that prices on the average could will be 5% or more higher in a years time

    Good for Summerset I reckon .......as long as Julian stirs up his sales people and doesn’t accept that non existent longer days to sell as an excuse for the sales people to finalise sales.
    Last edited by winner69; 08-05-2019 at 08:39 PM.
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  6. #7776
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    Quote Originally Posted by winner69 View Post
    Good for Summerset I reckon .......as long as Julian stirs up his sales people and doesn’t accept that non existent longer days to sell as an excuse for the sales people to finalise sales.
    For sure, didn't miss the elephant in the room, but an inadequate response to arresting the multiyear declining % of sales vs total product available and longer times to sell the ones that actually got sold. I wouldn't want to be the sales manager, I bet they're having a few sleepless nights trying to figure out how to reverse the trend without manipulating other things like slowing the builds, that's just fudging the numbers. I want to see them push on with the build programme and fix their sales performance.

  7. #7777
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    Quote Originally Posted by winner69 View Post
    Reviewing all the economic stuff that impacts the housing market and putting them all into a matrix and assessing what usually happens to the housing market when an indicator changes I reckon we could see the number of house sales over the next year increase by more than 10% and that prices on the average could will be 5% or more higher in a years time

    Good for Summerset I reckon .......as long as Julian stirs up his sales people and doesn’t accept that non existent longer days to sell as an excuse for the sales people to finalise sales.
    No argument from me

    Quote Originally Posted by Baa_Baa View Post
    For sure, didn't miss the elephant in the room, but an inadequate response to arresting the multiyear declining % of sales vs total product available and longer times to sell the ones that actually got sold. I wouldn't want to be the sales manager, I bet they're having a few sleepless nights trying to figure out how to reverse the trend without manipulating other things like slowing the builds, that's just fudging the numbers. I want to see them push on with the build programme and fix their sales performance.
    Rome wasn't built in a day. SUM's track record of profit growth speaks for itself.
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  8. #7778
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    Quote Originally Posted by Beagle View Post
    No argument from me

    Rome wasn't built in a day. SUM's track record of profit growth speaks for itself.
    I know you're not making excuses for the multiyear decline in sales performance and I think I understand your motivations for backing out to the macro metrics of 'record profit growth' (I share the motivation but not the response), but even you have alluded to/acknowledged the sales performance issue.

    It is unavoidable, it is the elephant in the room with SUM. As a shareholder I'd prefer that they confronted that and shared a convincing plan to avoid a continuation of the sales under-performance. Without fudging the numbers by slowing development growth, just fix the root cause sales under-performance.

  9. #7779
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    Quote Originally Posted by Baa_Baa View Post
    For sure, didn't miss the elephant in the room, but an inadequate response to arresting the multiyear declining % of sales vs total product available and longer times to sell the ones that actually got sold. I wouldn't want to be the sales manager, I bet they're having a few sleepless nights trying to figure out how to reverse the trend without manipulating other things like slowing the builds, that's just fudging the numbers. I want to see them push on with the build programme and fix their sales performance.
    They are doing mystery shopping to help sales along ....thats good

    But maybe thats a sign that prospective buyers turn have reasons to turn cold on Summerset and Summerset are trying to find out.
    Last edited by winner69; 08-05-2019 at 09:08 PM.
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  10. #7780
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    Quote Originally Posted by Baa_Baa View Post
    I know you're not making excuses for the multiyear decline in sales performance and I think I understand your motivations for backing out to the macro metrics of 'record profit growth' (I share the motivation but not the response), but even you have alluded to/acknowledged the sales performance issue.

    It is unavoidable, it is the elephant in the room with SUM. As a shareholder I'd prefer that they confronted that and shared a convincing plan to avoid a continuation of the sales under-performance. Without fudging the numbers by slowing development growth, just fix the root cause sales under-performance.
    Over the last two years I have been bending Julian's ear a heck of a LOT about moving to fixed weekly fee's for life. I have followed him up in a very "dogged" way.
    I gathered the sense that I might finally be getting through to him after following him up yet again about this matter last week....watch this space.
    This won't be a panacea for all the reasons some of their units are slow sellers but it will help if they finally do this.
    No butts, hold no mutts, (unless they're the furry variety).

  11. #7781
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    Quote Originally Posted by Beagle View Post
    Over the last two years I have been bending Julian's ear a heck of a LOT about moving to fixed weekly fee's for life. I have followed him up in a very "dogged" way.
    I gathered the sense that I might finally be getting through to him after following him up yet again about this matter last week....watch this space.
    This won't be a panacea for all the reasons some of their units are slow sellers but it will help if they finally do this.
    There's no doubt SUM are a successful company and should continue to be so, and there's also no doubt they know how to back land and build properties, heck they're doing an amazing job with that! I'm glad that you acknowledge albeit obliquely a sale performance issue (by not refuting it) that has been emerging for some years now. It's reported in their FY results way down the bottom in the sales table, but it's just that they don't spell out the % of sales versus units available for sale, which has declined year on year for quite some time.

    So their development programme has got well ahead of their ability to sell the properties. I think it's fudging the numbers by reducing development, as it will of course make sales look better as a % of units available for sale. I reckon if I was a Board member I'd be making life difficult by asking what they're doing about selling what they have and why should I have confidence that they can sell what's in the development pipeline, without arresting the developments which are going so well.

    Yes, I'd be all over the the sales manager like a rash and asking all sorts of awkward questions. I wouldn't immediately support a non-disclosure of developments (as they said recently "not headlining"), I'd be grinding on their sales strategy and methods and what they're doing about fixing their sales under-performance.

    If that's helped by having 'fixed fees for life', then bring it on, it's a sales motivation (at least part of), and that's what we want to see, a coherent plan to fixing sales underperformance, a sustainable pathway to unloading all the properties that are vacated and that they so capably can develop.

  12. #7782
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    Quote Originally Posted by Baa_Baa View Post
    There's no doubt SUM are a successful company and should continue to be so, and there's also no doubt they know how to back land and build properties, heck they're doing an amazing job with that! I'm glad that you acknowledge albeit obliquely a sale performance issue (by not refuting it) that has been emerging for some years now. It's reported in their FY results way down the bottom in the sales table, but it's just that they don't spell out the % of sales versus units available for sale, which has declined year on year for quite some time.

    So their development programme has got well ahead of their ability to sell the properties. I think it's fudging the numbers by reducing development, as it will of course make sales look better as a % of units available for sale. I reckon if I was a Board member I'd be making life difficult by asking what they're doing about selling what they have and why should I have confidence that they can sell what's in the development pipeline, without arresting the developments which are going so well.

    Yes, I'd be all over the the sales manager like a rash and asking all sorts of awkward questions. I wouldn't immediately support a non-disclosure of developments (as they said recently "not headlining"), I'd be grinding on their sales strategy and methods and what they're doing about fixing their sales under-performance.

    If that's helped by having 'fixed fees for life', then bring it on, it's a sales motivation (at least part of), and that's what we want to see, a coherent plan to fixing sales underperformance, a sustainable pathway to unloading all the properties that are vacated and that they so capably can develop.
    If you keep pushing staff to increase sales in the face of a declining market then sooner or later you will suffer in some way from "innovative" methods devised by the staff that will turn and bite you later on. This has been well proven in the Australian banking industry recently and also in the USA.

  13. #7783
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    Quote Originally Posted by Beagle View Post
    Client of mine is doing a development in Auckland and Bayley's have been appointed. Had a good chat with John Bayley the owner yesterday and without any prompting or question from me he brought up the national days to settle matter which has jumped quite considerably, (so Julian is a straight shooter as I have come to know he is). Anyone who thinks this will not affect RYM is deluding themselves or more likely hasn't thought it through. RYM also have plenty of exposure to the Australian property market which really is tanking. Discussed quite a few other things with him. Interest rates are at unprecedented lows that neither I or he has ever seen before as are capitalisation rates for industrial property. Many rental properties around N.Z. with appropriate gearing and sub 4% interest rates are now cash flow positive and where are all the 60,000 new immigrants arriving each year going to live ? N.Z. and Australian residential property dynamics are quite different.
    I think all the "text book" experts or here and the other forum predicting a property crash in N.Z. are simply fearmongering with absolutely no date to support their viewpoint and little understanding of the basic laws of supply and demand. The real experts I talk to see things quite differently.
    Posted 4/5/19. You should have come along to the annual meeting Baa Baa...sluggish sales was discussed at quite some length during the Q&A and I am not saying its not an issue, it is !
    Lots of factors...new village units built but without the main facilities at present are a bit of a turn off for buyers...people want to see the main recreational / common area building up and running, slow settlement times definitely a big factor as confirmed with my discussion with John Bayley last Friday.
    People unsure what they will get for their home because of uncertainty hanging over the market created by the Government with their endless prevarication with CGT and the change to the foreign buyer eligibility on 22 October 2018 meaning people are reluctant to sign contracts at villages until they have sold their home. Banks making it tougher to get finance for buyers slowing down the house sales process...the list goes on and on and on and on...no one single factor or silver bullet either.

    No point in them building more this year than they can sell with already having high stock level's. Fixed fees for life...I think I am starting to win Julian over but its like turning the Titanic around with super small rudders. Believe me, I have tried to get it into his head that old people crave the certainty that fixed fees for life gives them. He acknowledged last week that everyone else is now doing it and they have been looking at it. Everyone on here knows I can be relied upon to be dogmatic when necessary and I won't give up.
    Last edited by Beagle; 08-05-2019 at 10:28 PM.
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  14. #7784
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    Quote Originally Posted by Baa_Baa View Post
    There's no doubt SUM are a successful company and should continue to be so, and there's also no doubt they know how to back land and build properties, heck they're doing an amazing job with that! I'm glad that you acknowledge albeit obliquely a sale performance issue (by not refuting it) that has been emerging for some years now. It's reported in their FY results way down the bottom in the sales table, but it's just that they don't spell out the % of sales versus units available for sale, which has declined year on year for quite some time.

    So their development programme has got well ahead of their ability to sell the properties. I think it's fudging the numbers by reducing development, as it will of course make sales look better as a % of units available for sale. I reckon if I was a Board member I'd be making life difficult by asking what they're doing about selling what they have and why should I have confidence that they can sell what's in the development pipeline, without arresting the developments which are going so well.

    Yes, I'd be all over the the sales manager like a rash and asking all sorts of awkward questions. I wouldn't immediately support a non-disclosure of developments (as they said recently "not headlining"), I'd be grinding on their sales strategy and methods and what they're doing about fixing their sales under-performance.

    If that's helped by having 'fixed fees for life', then bring it on, it's a sales motivation (at least part of), and that's what we want to see, a coherent plan to fixing sales underperformance, a sustainable pathway to unloading all the properties that are vacated and that they so capably can develop.
    Not so sure whether flogging the sales people is the best strategy. Never a good idea to flood the market with more product that the market wants to take. Never good to find the maximum you can sell (because this kills margins), they need to search for the optimum: sell as many units as they can at still healthy margins. That's where the sweet spot sits.

    I think its ok to reduce production for some time if the market can't take all the units. Even if they stop building new units (what they don't plan) they still will make nice money with resales.

    But I am sure, the problem will be very temporary. We have a housing shortage, we have still healthy immigration numbers, we have a government inept of increasing the (ways too low) build rate and we just had a reduction in the interest rate ... the market will sort it. Retirement units are probably the best way for the government to address the still deteriorating housing crisis.
    ----
    "Prediction is very difficult, especially about the future" (Niels Bohr)

  15. #7785
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    Quote Originally Posted by artemis View Post
    I know a lot about rental housing in New Zealand, current and proposed rules. I would be alarmed if any company I owned shares in decided to enter that market. Check out the Residential Tenancies Act, Labour and Greens rental housing policies (and the current consultations under way), and try a sampling of the tens of thousands of Tenancy Tribunal cases every year. Almost all brought by landlords for rent arrears and damage....
    With the suggestion of a mixture of ORA and lease, The upfront ORA payment would provide a security, against which damage or non-payment of lease could be deducted.

    In addition, of the tenancy tribunal cases for arrears and damage, how many were as a result of actions brought against tenants of retirement age?

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