RYM - Ryman Healthcare

[dobby41]

Could this sort of development be the start of a new trend ? https://www.newshub.co.nz/home/new-z...ng-crisis.html

Leasehold (with only 30 yr lease) - scary.

[peat]

Kiwis are very reluctant to own leasehold properties , there are a lot of horror stories out there and I saw my sister lose a chunk of money owning a dwelling on leasehold property , however with suitable lease agreements it is definitely one way of reducing housing costs and should be explored esp by the govt.
There's is no chance of a reverse mortgage I would think and some people live past 85 and will increasingly do so.
Cant take it with you though so reducing capital requirements to have a roof over your head is an option for those forced to make hard choices.

[Beagle]

Leasehold (with only 30 yr lease) - scary.

Why is it scary ? Suppose Joe Bloggs is 65 and fit and healthy and owns a $1m house in Auckland and nothing else.
Option 1. Buy a fancy Auckland RYM unit and be broke for the rest of his days. (Actually he can't do that for quite some time due to minimum age restrictions)
Option 2. Buy said leasehold unit and free-up $800K invested at say a 5% return in a balanced portfolio of shares and bonds and enjoy a comfortable retirement. Odds are he won't live past 95 anyway. Suppose he gets to 85 and needs better care. Sell Leasehold unit for somewhere about what he paid for it, and buy a care suite at OCA which on average on a national basis are just $227K.

Option 2 looks considerably better than option 1 to me as for one thing he can get on with enjoying his retirement now, not at some predetermined future date RYM decide to accept him, assuming they don't move the entry age goalposts again..

[dobby41]

Why is it scary ? Suppose Joe Bloggs is 65 and fit and healthy and owns a $1m house in Auckland and nothing else.
Option 1. Buy a fancy Auckland RYM unit and be broke for the rest of his days. (Actually he can't do that for quite some time due to minimum age restrictions)
Option 2. Buy said leasehold unit and free-up $800K invested at say a 5% return in a balanced portfolio of shares and bonds and enjoy a comfortable retirement. Odds are he won't live past 95 anyway. Suppose he gets to 85 and needs better care. Sell Leasehold unit for somewhere about what he paid for it, and buy a care suite at OCA which on average on a national basis are just $227K.

Option 2 looks considerably better than option 1 to me as for one thing he can get on with enjoying his retirement now, not at some predetermined future date RYM decide to accept him, assuming they don't move the entry age goalposts again..

For a start the model they used was for 55+ with the idea that at 85 they'd be gone.
If they aren't gone they have no lease.
I have no idea about the terms of the lease but the idea that they'd 'just take their house away' is fanciful at best.

[Beagle]

For a start the model they used was for 55+ with the idea that at 85 they'd be gone.
If they aren't gone they have no lease.
I have no idea about the terms of the lease but the idea that they'd 'just take their house away' is fanciful at best.

Their target demographic is 55 years and older
I'm not suggesting they take their house away, where did I say that ? I am suggesting they could probably sell their well maintained house on leasehold land and transfer their existing land lease to someone else, you know, like what happens with every other leasehold sale.

I am seeing a big increase in the number of people selling up Auckland properties to trade down to something far cheaper in the provinces as the only way for people who have nothing saved to enjoy a comfortable retirement. I expect this emerging trend to gather serious pace in the years ahead.

Fact is freeing up $800K in this example gives Joe Bloggs a comfortable retirement if he has no other means whereas moving into a typical fairly expensive Auckland RYM unit does not. There are significantly more people without a decent retirement nest egg than with one, in my professional opinion.

[dobby41]

I'm not suggesting they take their house away, where did I say that ? I am suggesting they could probably sell their well maintained house on leasehold land and transfer their existing land lease to someone else, you know, like what happens with every other leasehold sale.

The woman in the article suggested she'd just take the house away (I presume you looked at the whole item?).
Every other leasehold (or most commonly) have very long leases - much longer than 30 years.

I predict a lot of angst in the media in years to come.

[Beagle]

Yes I read it all a while ago, not recently. Depends how its constructed as to how easy it is to take away. More likely people will sell them and transfer the lease if their needs change I would have thought. Small homes can be transported right across Auckland for less than $10K.

[dobby41]

Yes I read it all a while ago, not recently. Depends how its constructed as to how easy it is to take away. More likely people will sell them and transfer the lease if their needs change I would have thought. Small homes can be transported right across Auckland for less than $10K.

I haven't seen the lease but it is for 30 years.
Maybe you can sign up for another lease after that but who knows - certainly the lessor would be in a very strong bargaining position at the end of the lease wouldn't they (get your house off my land or it's mine).

The places in the picture didn't look very small.

[Beagle]

We're off topic but I can tell you from first hand experience that these guys are very very good. https://www.fbr.co.nz/
My point is simply this. If RYM and others are limiting intake until both husband and wife are over 70 (keep in mind there's often a big difference in partners ages), they are leaving a gap in the market a mile wide for others to start offering other alternatives for anyone over 50 and I expect these alternatives that solve people's problems (lack of capital for investment in retirement years leading to radical downsizing of housing), to become extremely popular in the future as the vast majority of baby boomers retire with very limited funds and look to substantially downsize to free-up significant capital. An example of a company starting to meet this vast need is in this link https://papamoasands.co.nz/

Remember the vast majority of Auckland baby boomers have a $900K house and virtually nothing set aside for retirement. You think freeing up $700K might help make for a comfortable retirement ?

[dobby41]

We're off topic but I can tell you from first hand experience that these guys are very very good. https://www.fbr.co.nz/
My point is simply this. If RYM and others are limiting intake until both husband and wife are over 70 (keep in mind there's often a big difference in partners ages), they are leaving a gap in the market a mile wide for others to start offering other alternatives for anyone over 50 and I expect these alternatives that solve people's problems (lack of capital for investment in retirement years leading to radical downsizing of housing), to become extremely popular in the future as the vast majority of baby boomers retire with very limited funds and look to substantially downsize to free-up significant capital. An example of a company starting to meet this vast need is in this link https://papamoasands.co.nz/

Remember the vast majority of Auckland baby boomers have a $900K house and virtually nothing set aside for retirement. You think freeing up $700K might help make for a comfortable retirement ?

Oh there is a gap but it may not be one that RYM wants to fill.
If they accepted 55yr olds then it could be a long time before they can turn over the unit - better to leave something for other players with other models.
Like Freedom Lifestyle Villages that you show. They have a village being built in Cambridge. It works for them.

Sometimes, for a company, it is worthwhile leaving room for others (this is on-topic now).

I think other options will arise as this matures. Players will come in with profit share etc.
Again, may be better for RYM to leave that to others - the continuum of care model works well and is what has made them popular in Aus.