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  1. #7786
    Gnawing on Bones Beagle's Avatar
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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.
    No butts, hold no mutts, (unless they're the furry variety).

  2. #7787
    always learning ... BlackPeter's Avatar
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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.
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  3. #7788
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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?

  4. #7789
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    In case it has been missed


    "Today's Reserve Bank interest rate cut - taking the OCR to record low of 1.5 per cent - will reignite New Zealand's housing market, Westpac chief economist Dominick Stephens says,"Mortgage rates have plunged over the past two months, and today's OCR cut will cause them to fall further," Stephens said.
    "We think the consequence will be an upturn in the housing market, starting in the second half of 2019."

  5. #7790
    Gnawing on Bones Beagle's Avatar
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    Quote Originally Posted by minimoke View Post
    In case it has been missed


    "[FONT="]Today's [/FONT]Reserve Bank interest rate cut[FONT="] - taking the OCR to record low of 1.5 per cent - will reignite New Zealand's housing market, Westpac chief economist Dominick Stephens says,[/FONT][FONT="]"Mortgage rates have plunged over the past two months, and today's OCR cut will cause them to fall further," Stephens said.[/FONT]
    "We think the consequence will be an upturn in the housing market, starting in the second half of 2019."
    No we can't have that !! Almost everyone tells me the game is up and the real estate dream run is over lol
    No butts, hold no mutts, (unless they're the furry variety).

  6. #7791
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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.
    Even more confident of increased number of house sales and higher prices in next year after the misguided OCR cut yesterday

    If only Julian and his team would stop looking for excuses and just get on with selling units Summerset should be OK

    Volunteered my services as a mystery shopper .....wonder what it entails but must be important if mentioned as a key component of their sales strategy
    ”You can't cross the sea merely by standing and staring at the water.” -Rabindranath Tagore

  7. #7792
    Gnawing on Bones Beagle's Avatar
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    More good news. The chronic Nurses shortage has finally been recognised by this Government without even the need for a 2 year long working party study lol
    http://www.scoop.co.nz/stories/BU190...-on-nurses.htm
    No butts, hold no mutts, (unless they're the furry variety).

  8. #7793
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    Quote Originally Posted by winner69 View Post
    Even more confident of increased number of house sales and higher prices in next year after the misguided OCR cut yesterday

    If only Julian and his team would stop looking for excuses and just get on with selling units Summerset should be OK

    Volunteered my services as a mystery shopper .....wonder what it entails but must be important if mentioned as a key component of their sales strategy
    Maybe Julian should contact Twyford and see if we can sell a few through Kiwibuid, bearing in mind that he needs 99,916 more to build/claim to meet his soon to be abandoned target !!

  9. #7794
    always learning ... BlackPeter's Avatar
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    Looks like Fisher funds using the current SP weakness to accumulate: They increased their holding by nearly 2.5 million shares over the last 4 weeks! Clever ...

    http://nzx-prod-s7fsd7f98s.s3-websit...318/299578.pdf
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  10. #7795
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    Quote Originally Posted by BlackPeter View Post
    Looks like Fisher funds using the current SP weakness to accumulate: They increased their holding by nearly 2.5 million shares over the last 4 weeks! Clever ...

    http://nzx-prod-s7fsd7f98s.s3-websit...318/299578.pdf
    Trying to make up for lost ground as April not good for them -


    A drag on performance was retirement village provider Summerset (-15%) after releasing a weak quarterly new sales figure, citing that increased settlement times in the residential property market are impacting settlement of its units. Following our recent site visit in March, we nonetheless believe that the company remains well positioned despite this short-term market-related weakness.


    It looks like fisher also bought more Ryman as well ....and even more XRO
    Last edited by winner69; 09-05-2019 at 02:34 PM.
    ”You can't cross the sea merely by standing and staring at the water.” -Rabindranath Tagore

  11. #7796
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    Quote Originally Posted by Beagle View Post
    More good news. The chronic Nurses shortage has finally been recognised by this Government without even the need for a 2 year long working party study lol
    http://www.scoop.co.nz/stories/BU190...-on-nurses.htm
    That’s good. Why was the shortage allowed to grow for so long?

  12. #7797
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    Quote Originally Posted by Bjauck View Post
    That’s good. Why was the shortage allowed to grow for so long?
    Ask the Govt that question and I'm sure they will come up with some well spun political answer for you..

  13. #7798
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    Quote Originally Posted by BlackPeter View Post
    Looks like Fisher funds using the current SP weakness to accumulate: They increased their holding by nearly 2.5 million shares over the last 4 weeks! Clever ...

    http://nzx-prod-s7fsd7f98s.s3-websit...318/299578.pdf
    What is clever about holding a company in their portfolio while it falls from 800c to 550c? So they were averaging down in the past few weeks?

  14. #7799
    always learning ... BlackPeter's Avatar
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    Quote Originally Posted by SilverBack View Post
    What is clever about holding a company in their portfolio while it falls from 800c to 550c? So they were averaging down in the past few weeks?
    Clever is to use the current weakness to increase their holding. But - by the way - they only returned to substantial shareholder status in April 2019. I don't know, how many (if any) they did hold on the way down, given that they sold some end of Feb 2018 (after an upspike) and dropped at that stage below 5% - but if they did, it was a smaller parcel.

    I guess one thing we need to understand as well is that the investment rules for big investors look a bit different. Assume you think a share has peaked, than as a small investor you might run for the exit. As a big investor you are already too late because any sale of a big parcel would just crash the market.

    Big funds need to think a bit more long term unless they want to create havoc on the markets.

    But anyway - I do have my Kiwisaver account with Fisher funds and am quite pleased about their information as well as performance. Good company.
    Last edited by BlackPeter; 10-05-2019 at 08:44 AM.
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  15. #7800
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    Quote Originally Posted by BlackPeter View Post
    Clever is to use the current weakness to increase their holding. But - by the way - they only returned to substantial shareholder status in April 2019. I don't know, how many (if any) they did hold on the way down, given that they sold some end of Feb 2018 (after an upspike) and dropped at that stage below 5% - but if they did, it was a smaller parcel.

    I guess one thing we need to understand as well is that the investment rules for big investors look a bit different. Assume you think a share has peaked, than as a small investor you might run for the exit. As a big investor you are already too late because any sale of a big parcel would just crash the market.

    Big funds need to think a bit more long term unless they want to create havoc on the markets.

    But anyway - I do have my Kiwisaver account with Fisher funds and am quite pleased about their information as well as performance. Good company.
    SUM generally about 5% to 6% of that Fishers portfolio (a bit less than Ryman) which shows some conviction

    Buys and sells over time probably because of investing new money and rebalancing portfolio activities.....that’s the clever bit
    Last edited by winner69; 10-05-2019 at 09:00 AM.
    ”You can't cross the sea merely by standing and staring at the water.” -Rabindranath Tagore

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