MPG - Metro Glass

[t.rexjr]

so here we are again at close to the all time low,is it worth a top up again? what do you think guys?

Consent levels are less than flat from what I see. I'd wait for the post election vibe if buying for any other reason than divvy stock.

[bull....]

after being the most hyped thread there for a while looks those guys and gals have run away ( or taken there losses? )

never fight the market i say , always much smarter

[TheHunter]

after being the most hyped thread there for a while looks those guys and gals have run away ( or taken there losses? )

never fight the market i say , always much smarter

Suspect just no new fundamental info to discuss. Price been moving horizontally for awhile now, likely to have a decent breakout when new news does come to light but a wait and see as to which direction.

[BlackPeter]

after being the most hyped thread there for a while looks those guys and gals have run away ( or taken there losses? )

never fight the market i say , always much smarter

You can't have seen many threads if you consider this one as "hyped". Try cryptocurrency, PEB or XRO (at their time). I remember for MPG only facts sprinkled in with intense down-ramping by a specific bear with an agenda ...

Still holding and waiting for the spring rise ... so far they always went up towards the end of the year. I suspect the outcome of the elections (and the October building numbers) will do the trick.

Anyway - even if they might take their time to rise ... reasonable dividend income ... more than 7 cents plus imputation credits - that's roughly 10 cents for a share which costs only $1.06 ;

[couta1]

after being the most hyped thread there for a while looks those guys and gals have run away ( or taken there losses? )

never fight the market i say , always much smarter

Why fight it, even if your sitting on a loss? Just sit back and relax and wait patiently for a turn, unless the company is a complete dog. PS-Never be afraid of red arrow, even a big one if you have a large holding, part and parcel of life in the market.

[Dust]

after being the most hyped thread there for a while looks those guys and gals have run away ( or taken there losses? )

never fight the market i say , always much smarter

Not going to have to fight anything sitting on my average of 1.06 Just gonna ride the wave upwards from here on!

[winner69]

You can't have seen many threads if you consider this one as "hyped". Try cryptocurrency, PEB or XRO (at their time). I remember for MPG only facts sprinkled in with intense down-ramping by a specific bear with an agenda ...

Cant have been bull.... (with a name like that) doing the downramping

Anyway a bit of downramping is overdue

Tony Alexander in his Weekly Overview tonight says that existing house sales could fall from current levels of about 80,00 pa to as low as 65,000 (maybe go to 55,000). They were running at 95,000 a year ago

He then said this -

But here is a key problem which many agents will
face. Back in 2001 when sales bottomed out at
65,000 the number of consents issued for the
construction of new dwellings was 20,000. In
early-2009 when sales fell to 54,000 consents
totalled 14,000. In early-2011 when sales hit
55,000 consents were again 14,000.

Tony still reckons consents will still be about 30,000 when house sales numbers bottom out

But he overlooks what is driving the decreasing house sales numbers are essentially also the drivers of new residential construction. This time is slightly different though and consents probably won't fall to 20,000 or 14,000 .......but 25,000/27,000 early next year a real possibility

Remember Metro keep repeating that there revenues are strongly related to new residential consents. (Did notice they left the nice chart that shows this relationship out of their AGM presentation)

I wonder how flat flat really is

http://tonyalexander.co.nz/wp-conten...er-14-2017.pdf

[BlackPeter]

Cant have been bull.... (with a name like that) doing the downramping

Anyway a bit of downramping is overdue

Tony Alexander in his Weekly Overview tonight says that existing house sales could fall from current levels of about 80,00 pa to as low as 65,000 (maybe go to 55,000). They were running at 95,000 a year ago

He then said this -

But here is a key problem which many agents will
face. Back in 2001 when sales bottomed out at
65,000 the number of consents issued for the
construction of new dwellings was 20,000. In
early-2009 when sales fell to 54,000 consents
totalled 14,000. In early-2011 when sales hit
55,000 consents were again 14,000.

Tony still reckons consents will still be about 30,000 when house sales numbers bottom out

But he overlooks what is driving the decreasing house sales numbers are essentially also the drivers of new residential construction. This time is slightly different though and consents probably won't fall to 20,000 or 14,000 .......but 25,000/27,000 early next year a real possibility

Remember Metro keep repeating that there revenues are strongly related to new residential consents. (Did notice they left the nice chart that shows this relationship out of their AGM presentation)

I wonder how flat flat really is

http://tonyalexander.co.nz/wp-conten...er-14-2017.pdf

Interesting opinion. So - what Tony Alexander says is that he sees house sales (of existing stock) dropping and that he expects that this drop will continue next year (presumably if the context does not change). He does not say that he expects building permits to drop, this is something you introduced.

If I understand you correctly, than you say that you monitored the last big housing cycle (including GFC) and that it is your observation that the numbers of house sales (of existing stock) and building consents have been in this particular cycle correlated.

Makes sense. The GFC was all about people feeling insecure, about people losing their jobs and their nest eggs and people leaving New Zealand for greener pastures. Of course this impacted on both sales numbers as well as on building consents. The primary drivers for the housing market at this stage have been lack of money, lack of confidence and lack of demand. Things like that get sales as well as building consents down.

If we fast forward to today: Consumer confidence is on a high point. People have jobs and nest eggs are safe. Immigration is booming - there is plenty of demand for additional houses. Same thing as GFC? I don't think so.

And yes - House sales are depressed due to a political decision to reduce speculation (investors can only borrow 60% of the value of houses they buy). This reduces the amount of capital available to buy housing stock. However - people still need houses ... and its every day more people (immigration & births) who need them. If the next government (no matter which colour) has any grey matter worthwhile talking about between their ears than they will reduce / remove the lending restrictions for new buildings.

As well - Labour is talking about restricting non residents from investing in existing housing stock. However, they still intend to allow them to build new houses (similar as in Australia). A policy like that is increasing the demand for new houses, as would be reducing the lending restrictions on new houses.

Again - given that there is real demand would I think it sensible to assume that the building boom will continue and the number of building permits will rise from the 30k pa not just I expect this year. Both political parties promised to ramp up the build rate, not to drop it - and so I think it is a fair assumption that whoever wins the elections will make sure they have no egg on their faces come the next polling day.

Call me an optimist, but I am pretty sure that the number of building consents will rise in the mid term. The bigger question is whether MPG is able to turn this increased demand not just into increased revenue but bring it through to the bottom line ... but given all their investments I'd think there is at least a good chance they do.

[winner69]

BP

August house sales stats out - down another 2,000 odd on last year.

Annual number now below 78,000 ...ouch

Poor real estate agents ......and maybe a slow down for Metro next year taking into account lags.

And in response to your reply - I dis said Tony expected consents to be about 30,000 ...and then added my opinion along with reasons why.

[BlackPeter]

BP

August house sales stats out - down another 2,000 odd on last year.

Annual number now below 78,000 ...ouch

Not sure what the 78000 is meaning to represent ... but whatever it is, it is looking backwards and reflecting on current policy (loan restrictions) and election jitters.

Poor real estate agents ......and maybe a slow down for Metro next year taking into account lags.

And in response to your reply - I dis said Tony expected consents to be about 30,000 ...and then added my opinion along with reasons why.

The financial well being of real estate agents was never my main concern ... and I am not sure how it will impact on MGP's result?

Absolutely - you said that Tony expects 30k new building consents and gave afterwards your views on why it would be less. I never contested that.

But overall - it feels to me you are trying to predict tomorrow's housing market firmly looking into the rear mirror. While it is possible to drive that way as long as the road is very straight - any unexpected bend will get you off the road.

Maybe we just need to agree on disagreeing about next years building activity. What worries me more is whether our building industry is capable to cope with the increased demand I expect ... and this might be where the s**t hits the fan (as well for MPG). While I think they have the capacity - they have been in the past not very good to respond in an efficient way to capacity fluctuations.