RYM - Ryman Healthcare

[Biscuit]

Also:

"Will there be a crash? No because this is not a bubble. Amazingly many people still describe the soaring Auckland housing market as a bubble and reference Ireland. .........the key thing these people have missed since 2007 is that unlike foreign housing markets pre-GFC we have not seen, are not seeing, and will not see a housing supply surge in New Zealand. In this country we make it so difficult for anyone to build anything ..... that growing supply is very difficult, with that difficulty assisted by shortages of builders, shortages of materials, and now a shortage of finance. There won’t be a price crash, but as noted in July, we have entered the end-game for this housing cycle and if the LVR tightening undertaken in July does prove to have only a temporary impact then there will be another tightening before the middle of this year. Chances are no further move by the RB will be needed." (Tony Alexander, BNZ WO)

[cyclist]

Also:

"Will there be a crash? No because this is not a bubble. Amazingly many people still describe the soaring Auckland housing market as a bubble and reference Ireland. .........the key thing these people have missed since 2007 is that unlike foreign housing markets pre-GFC we have not seen, are not seeing, and will not see a housing supply surge in New Zealand. In this country we make it so difficult for anyone to build anything ..... that growing supply is very difficult, with that difficulty assisted by shortages of builders, shortages of materials, and now a shortage of finance. There won’t be a price crash, but as noted in July, we have entered the end-game for this housing cycle and if the LVR tightening undertaken in July does prove to have only a temporary impact then there will be another tightening before the middle of this year. Chances are no further move by the RB will be needed." (Tony Alexander, BNZ WO)

He may as well have simply said: "Don't worry. This time is different".

[Biscuit]

He may as well have simply said: "Don't worry. This time is different".

When was the last time we had a crash in the NZ property market?

[Hectorplains]

https://www.nbr.co.nz/article/shoesh...takes-p-197926

Jenny Ruth going into bat for Ryman... debunks Ryman as primarily a property play. "Shoeshine reckons that’s a fundamental misunderstanding about what drives Ryman’s business. Rather than being about property, Ryman’s core business is providing services to the aged and their needs for increasing amounts of care."

[cyclist]

When was the last time we had a crash in the NZ property market?

Equally I don't think there is a "last time" when typical valuation metrics (e.g. house value to income ratio's for example) are so far out of whack. Just because it hasn't happened here in recent memory doesn't mean it can't, even if the short term supply / demand fundamentals are still supportive.

[Biscuit]

Equally I don't think there is a "last time" when typical valuation metrics (e.g. house value to income ratio's for example) are so far out of whack. Just because it hasn't happened here in recent memory doesn't mean it can't, even if the short term supply / demand fundamentals are still supportive.

So then, you are saying "this time is different" not Alexander?

Alexander is not saying there isn't a property cycle and he's not saying that we are not at the top of the cycle. He is just saying is that there is not a house price bubble - just normal market forces, demand pushing up prices in Auckland with a normal correction on the way. If that is true, then there will be no effect on Rymans?

[cyclist]

So then, you are saying "this time is different" not Alexander?

Heh heh - you may be right.

Agree that the RYM business won't be materially affected if the scenario you outline pans out, or even something somewhat worse. Any downturn will affect market sentiment though, which may have a greater than sensible impact on this sector's share values.

[Biscuit]

Any downturn will affect market sentiment though, which may have a greater than sensible impact on this sector's share values.

Maybe, but I would think it is more likely other sectors such as retail etc would be most affected by property market downfalls?

[Beagle]

Perception can become reality regardless of whether there's an impact on their financials or not. If Bill English announces a major change in immigration policy or houses start falling of their own accord right across the board sentiment is fairly likely to sour in my opinion.

[Biscuit]

Perception can become reality regardless of whether there's an impact on their financials or not. If Bill English announces a major change in immigration policy or houses start falling of their own accord right across the board sentiment is fairly likely to sour in my opinion.

That's true to a point. And that is where opportunity lies. Perception becomes reality for the market in terms of share price but ultimately the business performance will have the last word.