MET - Metlifecare - one for the fundies?

[dibble]

I can’t even take any of these forecasting articles seriously anymore. I don’t think any of them have been remotely correct over the years. Wasn’t there an article out there predicting a rise as well due to all the expats and Australians returning home because NZ is a safe haven? So which one is it? Down up? Left or right?

Yeah its interesting. House demand changes for all sorts of reasons but ours is fundamentally driven by high immigration (simple supply and demand, 60-90000 new people into 10-20,000 new houses). Anecdotally there is already years of pent up demand, thus even a slight drop might bring out buyers...well, buyers with jobs I suppose. I'll probably be watching unemployment and immigration numbers closer than GDP changes for this.

[winner69]

If the OIO doesn’t approve the deal it’ll save a lot of legal costs in the stoush that’s unfolding.

[Bjauck]

Yeah its interesting. House demand changes for all sorts of reasons but ours is fundamentally driven by high immigration (simple supply and demand, 60-90000 new people into 10-20,000 new houses). Anecdotally there is already years of pent up demand, thus even a slight drop might bring out buyers...well, buyers with jobs I suppose. I'll probably be watching unemployment and immigration numbers closer than GDP changes for this.

If there is net immigration in the next year, I think it will be mostly as the result of returning ex-pat Kiwis. No doubt many returnees will be the ones who have lost their employment overseas, and who will be looking for work in our recession hit economy. If they are in the market to buy a house, it will have to be at a cheap price.

Greater unemployment, reduced incomes, returning unemployed ex-pat kiwis will all mean more overcrowding as a result of failed government policies failing to ensure sufficient supply of housing for past immigration policies. The demand for boarding houses and tenement-ype accommodation may increase. I doubt it will mean the current expensive (high multiples of pre-covid 2019-level household income required) real estate prices will continue.

[Cyclical]

I don't think we need to put too much emphasis on the immigration thing...it'll be plus or minus ~20k or whatever. Fundamentally we are short of houses in this country, apparently. Some of that will be because of second homes, Air BNB etc, some of which will be freed up. There will be plenty of unemployment, which won't help, and FHB's Kiwisaver deposits would have taken a hit. But on the other hand, if LVR restrictions disappear and interest rates continue to track down, there will be plenty of people out there looking to snap up bargains as they come to market. I don't think we'll see anymore than a 10% drop over the next couple of years, probably less, and then maybe flat for a year or two after that (which if you inflation adjust might equate to another 5 or 6% drop). Big deal, life goes on, the grey head count will continue to increase (virus not withstanding) and there is plenty of head room in MET's NTA at the present share price levels.

[bull....]

air n b house will swamp the market as soon as restrictions are lifted . people will either sell them or rent them so this will have a depressing effect on the supply side of houses i would think. immigration is no longer a demand driver. people losing there jobs in the thousands from june/july after the subsidy runs out will create more supply as they become forced sellers. So i see a possibility of a dip in property. wouldnt have a clue how much but we will know in hindsight

[crighton100]

As an old fella,if my memory serves me right,after every big problem the sharemarket has had to encounter, property prices have dropped in a big way.I think this time is a bit different in as much as the uncertain future,which I think will make the property market both residential & commercial go down more than people expect.So there could be some bargains to be had,because after a year or two the property prices rage again.Just a thought for you young experts.

[macduffy]

Not a direct influence on MET, but a dearth of tourists = a surplus of Airbnb's = more accommodation to meet our current shortfall of housing. No consolation to those badly affected in the tourism sector but some benefit to others.

[thegreatestben]

Very useful insight and information being shared here and in general, thanks to all who contribute!
Have cracked into the market post-corona, terrifying in many ways as I've put 165k in.

Sleeping has been troublesome but the information in this thread makes me feel good about my MET buys.

[dibble]

"it'll be plus or minus ~20k or whatever"
I agree with your conclusion but what makes you think immigration will drop from 60k or whatever to 20k (genuine Q, not a dig), obviously without the physical means to get here for some (or many) months there will be a hiatus but are you suggesting the pipeline has dried up i.e applications and approvals will drop? Might there be a sudden surge when flights resume? This could alter housing demand quiet suddenly.

[winner69]

I assume the independent advisors value range will have to include the $7.00

Maybe lowered original thinking and will report $6.60 to $7.05 ...what a joke that would be in these times

But some would say that’s about right ...MET is really really cheap at the moment