CDL & CDI ... Another Great Result

[macduffy]

Assuming that the govt gets around to re-writing the RMA to make it more development - friendly, and that more land is eventually zoned residential, what effect, if any, do we see on CDL's business? Will it become more difficult for them, presumably competing with govt subsidised infrastructure sections - or will CDL participate as a major enabler of the govt's plans for more housing? Whatever form that takes. Any views?

I hold.

[BlackPeter]

Assuming that the govt gets around to re-writing the RMA to make it more development - friendly, and that more land is eventually zoned residential, what effect, if any, do we see on CDL's business? Will it become more difficult for them, presumably competing with govt subsidised infrastructure sections - or will CDL participate as a major enabler of the govt's plans for more housing? Whatever form that takes. Any views?

I hold.

I recon both of your options could be possible ... who knows?

However - given that CDL is ultimately majority owned and governed by people who are doing the same business (CDL - City development in Singapore) in many different countries and systems across the globe am I pretty sure that whatever decisions our government will make they will find a way to continue to prosper whatever the conditions ...

[DarkHorse]

Assuming that the govt gets around to re-writing the RMA to make it more development - friendly, and that more land is eventually zoned residential, what effect, if any, do we see on CDL's business? Will it become more difficult for them, presumably competing with govt subsidised infrastructure sections - or will CDL participate as a major enabler of the govt's plans for more housing? Whatever form that takes. Any views?

I hold.

Good questions. Could you explain what you mean by "government subsidised infrastructure sections"? (Brain's a bit fuzzy today^^)

[Scrunch]

Assuming that the govt gets around to re-writing the RMA to make it more development - friendly, and that more land is eventually zoned residential, what effect, if any, do we see on CDL's business? Will it become more difficult for them, presumably competing with govt subsidised infrastructure sections - or will CDL participate as a major enabler of the govt's plans for more housing? Whatever form that takes. Any views?

I hold.

One possibility is that the government creates an unintended consequence which is beneficial for CDL. With some new rules planned, owners with a difficult to consent subdivision may well just wait until the new rules become clear, rather than spend a small fortune trying to get consent under existing rules. Possible new entrants into the subdivision game may also wait to enter the market under the new rules, rather than try and learn all the tricks of the existing RMA, only to have to start again under the new re-write. Both of these possibilities will decrease competition and be slightly benefit of CDL.

Overall I think the most likely outcome is a positive one of Labour looking for partners to increase their development efforts. CDL is an obvious choice (along with fletchers) to scale up and create more sections and houses. More CDL activity is more profits.

However, my perception is that Labour is not particularly good at removing rules or adding flexibility to systems. I see Labour really struggling to get an RMA that is more development friendly done. Back in July 2020, David Parker was only hopeful for completing the work by 2023, so any new rules look to be first impacting in 2024 or possibly 2025.

[macduffy]

Good questions. Could you explain what you mean by "government subsidised infrastructure sections"? (Brain's a bit fuzzy today^^)

I was thinking about the possibility of govt contributions to services - roading, water, pipes etc - in new subdivisions, to ease the burden on developers and local authorities. Seems an obvious way to speed up development and reduce the cost of sections/housing.

[DarkHorse]

OK thanks
I think one way or another, with a high demand for land and more and more high density zoning, the share price significantly undervalues their assets.

[podg]

i dont think the govt can afford to wait till 2024-25 to get any RMA changes into effect. there is an election in 2023 and 2026 ... and the opposition (whatever that looks like) will be getting increasingly louder in its criticism of the housing crisis and any perceived inadequacies by the govt around addressing the issue. Elections aside .... the govt has a responsibility to find effective solutions to the housing shortage and the RMA is an obvious place to do that. they might have to bite the bullet (philosophically at least) and assist the private sector by reducing the red tape or by incentivising city and district councils to free up land for development. They can't drop the ball here, the ramifications could be serious.

[Scrunch]

i dont think the govt can afford to wait till 2024-25 to get any RMA changes into effect. there is an election in 2023 and 2026 ... and the opposition (whatever that looks like) will be getting increasingly louder in its criticism of the housing crisis and any perceived inadequacies by the govt around addressing the issue. Elections aside .... the govt has a responsibility to find effective solutions to the housing shortage and the RMA is an obvious place to do that. they might have to bite the bullet (philosophically at least) and assist the private sector by reducing the red tape or by incentivising city and district councils to free up land for development. They can't drop the ball here, the ramifications could be serious.

Yes Govt have a problem, and that problem only gets larger when you realise that the proposed replacement RMA is only the start of the process. After its passed, developers still need to get development approvals and build the new houses. Add these time factors in, and the RMA element of any solution should help the 2026-2030 period, but do little to help win the next two elections. Something else by govt is going to be needed - but what, and how does that impact CDL?

[podg]

I can hardly wait to see what that might be but the public will likely judge any actions taken by govt by the number of new houses built in the next 12-24 months. So land developers will play a part. And CDL should benefit. In my humble, one-eyed, opinion.

Yes Govt have a problem, and that problem only gets larger when you realise that the proposed replacement RMA is only the start of the process. After its passed, developers still need to get development approvals and build the new houses. Add these time factors in, and the RMA element of any solution should help the 2026-2030 period, but do little to help win the next two elections. Something else by govt is going to be needed - but what, and how does that impact CDL?

[invest]

in the meantime, their land bank keeps appreciating in value. Once investors realise how significant the value increases are we will see positive SP movement.