I hope so! Remember though, that the sector price their units/apartments as a percentage of real estate prices in the locality. Lower housing prices will translate into lower prices for the retirement sector, IMO.
Yup - there is a direct correlation between general house prices and retirement village prices (adjusted for locality obviously).
Let us shave off 30% off $7 NTA because of property down turn.....that still value MET at $4.90
Economists are predicting 6-9%.
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
I don't see that will happen. As interest in record low...a lot of investors have cash.....shares are scary.....so... property will be the safe haven as u can see the assets....
Yup - there is a direct correlation between general house prices and retirement village prices (adjusted for locality obviously).
No doubt - real estate prices will dip a bit in the months to come. Question is however - how will they look in say 3 or 5 years from now? Assuming NZ gets better through this crisis than others (and so far it looks like that), there are some million Kiwi Expats, some 20 million Australians and a handful of NZ permanent residents living abroad who all might want to consider moving (or moving back) to safe and healthy NZ.
Let just 1% of these move to NZ over the next year - this would be already 250,000 more residents (or something like 100,000 additional houses required. I wonder how this would impact on our property prices?
I don't think long term investors can lose at these prices.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
Went up to $3.88, will accumulate more if the price goes down below $3.60. I was looking for a safe haven share to invest some term deposits coming up. Interest rates are just way too low, to even bother reinvesting.
You will be joining the NZ resident investors with term deposits of $171 billion and saving deposits of $82 billion (total $253 billion*) when risk aversion post the lockdown switch over to yield enhancement.
Imagine what will happen to stock prices when the bank depositors attempt to get better yield - if just 10% of the term deposits ($25 billion) attempt to get better yields via the stock-markets!
I was right and they were saved from the indignity of a 2 handle, (just). They say a week is a long time in politics and it is then 19 days has been an eternity in this market. Go back and have a look where we were on the virus bell curve back then. Its clear there is genuine hope now, (at least in N.Z.), we can get on top of this virus.
Movements from late March at the depth's of this crisis, low point to now
SUM $3.36 to $5.95 up 77%
ARV $0.88 to $1.36 up 55%
OCA $0.38 to $0.85 up 124%
RYM $6.61 to $11.18 up 69%
MET $3.16 to $3.90 up just 25%
I'll let you figure out what the market is trying to tell you and why MET is the odd one out, (clue, its a lot to do with the takeover offer being pulled and arbitrage players selling down)
Opportunity knocks for MET buyers at under $4 ?...you folks be the judge
Fair value though? Sure let's hope people don't realise that NTAs will drop as property values drop as people become unemployed and the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.
Fair value though? Sure let's hope people don't realise that NAVs will drop as property values drop as people become unemployed, the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.
Fair value though? Sure let's hope people don't realise that NTAs will drop as property values drop as people become unemployed and the tourists stay. The helicoptered cash cargo cult will end. People selling up to move into a village will find that end up with less money to buy a retirement village unit and less money to have left to invest, with reduced interest and reduced dividends.
The difference between N.Z. and a lot of other countries is that we have VAST amounts of headroom for helicopter money to deploy and eventually this turns into inflation...that's what you're missing.
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
If Beagle thought about $3 was fair value three week's ago for MET compared to MET's sp of $4.20 in 2019, I cannot see how a SP remotely close to 2019's sp could be seen as fair value in today's circumstances. Anything above $3 is based on optimism regarding the state of NZ's economy and ability to sustain real estate valuations.
Even NZers who are funnelled by the system into owning residential property need income and deposit raising ability to sustain current inflated property prices.
Of course this also applies to the other retirement village companies, perhaps to a greater extent.
Originally Posted by macduffy
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