SUM - Summerset Group

[Beagle]

Pretty happy having put all my available cash(small amount) to work in SUM at $4,96 today. Time will tell if I jumped too early but I am content

Nice timing mate, I squeezed a few more into my portfolio at $5 the other day, didn't do quite as well as you.

[Ggcc]

I was too late. I was waiting for just 10 cents lower. $4.80 was my hoping point....... I just did not want to catch the falling knife further. Bought some more a couple of weeks back at $5.15, so still happy and sitting good.

[iceman]

I was too late. I was waiting for just 10 cents lower. $4.80 was my hoping point....... I just did not want to catch the falling knife further. Bought some more a couple of weeks back at $5.15, so still happy and sitting good.

Good buying at these levels I reckon

[oldtech]

I squeezed a few in at $4.95 on Monday ... watched a little nervously on Tuesday as the price continued to head down briefly, but now that it's at $5.16 I'm smiling.

No more spare money to invest at this stage, hoping to sit back and enjoy the climb.

[couta1]

No end to house price growth according to Trade Me. National average asking price up 10.2% year on year to $644600. The elderly will still have plenty of money to buy a lovely retirement unit with spare change. Last months figures that contributed to SP drop just an anomaly due to Easter and school holidays, as you were people, it's business as usual for SUM.

[Beagle]

No end to house price growth according to Trade Me. National average asking price up 10.2% year on year to $644600. The elderly will still have plenty of money to buy a lovely retirement unit with spare change. Last months figures that contributed to SP drop just an anomaly due to Easter and school holidays, as you were people, it's business as usual for SUM.

You make an excellent point about the national average price mate. There's been a fixation of late about the increased building costs and real estate prices in Auckland but the fact of the matter is SUM have 21 villages in total, currently completed or in development. Of those only 4 are in Auckland. In total including villages completed, currently in development and proposed sites currently bare land, (27 in total), 6 are in Auckland and 21 spread throughout the country. We need to be mindful that Auckland's problems don't dominate our focus and take a wider perspective.

[sb9]

http://www.interest.co.nz/property/8...-five-auckland

Another viewpoint on house prices.

[Bjauck]

Back in January...

"The other main urban centres are also classified as severely unaffordable - Hamilton at 6.2, Christchurch 5.9, Wellington 5.8, and Dunedin 5.4."
"Overall, housing in New Zealand is rated as severely unaffordable, with a median multiple of 5.9."

http://www.radionz.co.nz/news/busine...y-unaffordable'

Although Auckland is extremely unaffordable, it is not just an Auckland problem. Housing has been allowed to rise to such historically high multiples on the back of high immigration, foreign investor interest and historically low interest rates. The higher it was/is allowed to get; the more susceptible to a steep correction when factors turn imo.

[dela47]

First time poster - long time follower. Really appreciate the remarkable contribution many of you make and the improvement of knowledge for all that comes with such great discussion.

I think the majority of us here can agree that, long term SUM are a growth story that will continue to serve the increasing need for aged care.

Apologies if this has already been discussed, but what are our thoughts on the effect on the SP of a slight correction in the market (flat line growth for 2-3 years, then a period of average house price rises). One would think this risk is being factored in to an extent, but how many loose hands will we have if this levelling off of prices begins to occur?

I back SUM long term, my question is really around the practical effects on profits, growth and the SP in a downturn/flat line of property prices.

I appreciate the business model (to an extent) in the fact that SUM don’t ‘lose’ per se if prices are to drop (in terms of resale of units), they should still have a reasonable development margin / ability to buy more land to meet future demand, and they are purchasing and building units for long term hold which will inevitably catch the next cycle and meet the growing demand. But could some of the better minds here explain what a low/negative price growth environment will mean financially and how the market might react to this?

Appreciate no one has a crystal ball but would be interested to hear views / learn a bit more.

[percy]

Welcome dela47.
Reading both RYM and SUM reports, you will note both companies have clearly stated,
The property market has NO affect,effect or defect on them.
Both have been through a number of property cycles over the past 20 years,so I would expect they would know.