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  1. #5091
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    Quote Originally Posted by Beagle View Post
    Summerset is flat out building as fast as it can across a wide range of sites and believe me, they have no trouble selling them often well before they're built !
    Absolutely
    What counts is what you can see is happening
    How can the market be oversupplied when this is happening and the retirement population is increasing.
    Additionally we have the Americas cup and this will increase housing demand

  2. #5092
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    I was going to reply to a good post from hardt (I think it was) but it has been deleted. Shame as it must have taken a while to write.

    Always good to hear the quant's view
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  3. #5093
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    Quote Originally Posted by fish View Post
    Absolutely
    What counts is what you can see is happening
    How can the market be oversupplied when this is happening and the retirement population is increasing.
    Additionally we have the Americas cup and this will increase housing demand
    Allow me to explain to you. The proportion of retirees entering villages is increasing. For one thing this can't occur forever. Is this offset by the rate of eligible retirees coming "online" increasing (note I said rate not number) or are we on the steep part of the curve already?

    Secondly all operators seem to be increasing their build rate. Requiring more retirees to come "online" than the last year.

    As for the Americas cup, can't see that raising the number of people looking to live in a village.

    Let me know if you need further explanation regarding the above.

  4. #5094
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    Quote Originally Posted by percy View Post
    All the time the Tsunami of ageing grows.
    At present time 50 aged a week, are making a retirement village their home.
    So next milestone 100 a week,and then 200 a week.
    Pity the sector's build rate will steadily fall behind demand.
    Current penetration rate is just over 12%. This could easily grow into the mid-late teens as a percentage of retiree's wanting to live in a caring supportive community.
    I agree with you 100%. There could be a real shortage.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  5. #5095
    percy
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    Quote Originally Posted by Beagle View Post
    Current penetration rate is just over 12%. This could easily grow into the mid-late teens as a percentage of retiree's wanting to live in a caring supportive community.
    I agree with you 100%. There could be a real shortage.
    Yes a real shortage unless the build rate is substantially increased.
    The size of the ageing population Tsunami is expected to peak in twenty five to thirty years
    time.
    ps I wonder whether we will see Australian retirees, deciding to move to NZ,so as they may enjoy their golden years in a SUM village?
    Last edited by percy; 29-06-2017 at 12:19 PM.

  6. #5096
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    Default Let me add balance

    I read this thread and all I see is the positives,,, and one large positive is increasing numbers of weathy (thanks to the 40year property boom cycle) baby boomers entering their retirement years and one negative (possible property crash)...

    There is a "perception" that the retirement village sector will see good times like it is now for the next 30 years so we all will use this sector as our very long term (superannuation type) investment....But..is this perception valid?..Is this created perception based around the current environment?



    There are many other important factors which lie in the shadows....

    I think it was Halebop (Halebop can you add comment) a few years back on ST that said the demographic factor will be the biggest factor that will affect the property market starting in the near future, when the baby boomer generation bubble reach retirement and start downsizing ....As they move into smaller dwellings their last big 3 -4 bedroom home that once housed them and their children will be sold off into an ever decreasing market as there isn't the replacement numbers of Gen Y and Millennial couples...also .. the wealthy Generation is the exiting Baby boomers not the entering Millenials.
    Here lies the problem...The property market could become fractionated...and the mobility to move from house to retirement village may become more restrictive due to financial contraints rather than willingness..

    Also there are the usual other potential problems.. Politicians and their Party's housing policies (upcoming election), Competition and large dictating Competitors entering and diluting an affluent market...NZ's ever changing Fiscal Policies.... tightening migration restrictions (upcoming election) ...
    Last edited by Hoop; 29-06-2017 at 12:27 PM.

  7. #5097
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    Well Balance whilst I agree with you the property market is not crashing and if there is a property market crash it will impact more than just retirement sectors. I can't see a property market crash in the near future and that is common opinion of those in the know. A 5% YOY drop is probably a good thing. Its not sustainable for price to keep going up.

    I agree the elections are a risk but National is sitting pretty at the moment. At $4.80 with 30% growth this year predicted I think the risks you outlined are factored into the SP.

    As for a glut of houses in the future I guess this could happen, however New Zealand remains an attractive country to live so high levels of migration might offset some of that risk.
    Last edited by JeremyALD; 29-06-2017 at 12:28 PM.

  8. #5098
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    Fair point, Hoop. But if the current housing shortage persists, perhaps those big 3-4 bedroom homes will be bought up and converted into flats - or, maybe boarding houses will see a resurgence in popularity!


  9. #5099
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    Quote Originally Posted by Beagle View Post
    Current penetration rate is just over 12%. This could easily grow into the mid-late teens as a percentage of retiree's wanting to live in a caring supportive community.
    I agree with you 100%. There could be a real shortage.
    What if I told you penetration rate in Auckland had increased from 14.8% in 2015 to 15.1% in 2016.

    How long can a 0.3% increase in penetration per year be maintained?

    What is the increase in penetration required for this year when SUM has increased build rate by 12.5%, keep in mind all the other operators are also increasing build rate.

    What if I told you that based on the current development pipeline Auckland needs to have a penetration rate of 19.2% by 2023 to avoid an oversupply. Either that or reduce buildrate.

  10. #5100
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    What if I told you that based on the current development pipeline Auckland needs to have a penetration rate of 19.2% by 2023 to avoid an oversupply. Either that or reduce buildrate.
    Why would you expect the current buildrate to continue unabated for another six years? Are retirement companies not aware of this risk?

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