OCA - Oceania Group - retirement villages

[Bjauck]

These bank economists forecasting house prices down 6% to 13%

If we bother look back when prices down 20% we will able to say bank economists wrong again

https://www.stuff.co.nz/life-style/h...mmentators-say

If house prices drop 20% they will still be up by about 10% from two years ago, at the beginning of NZ’s covid era. Have OCA Ora’s prices increased by that rate?

Currently I think NZ shares are up by less than 2% over the last two years - way below the current 36% increase in NZ house prices.

[BlackPeter]

These bank economists forecasting house prices down 6% to 13%

If we bother look back when prices down 20% we will able to say bank economists wrong again

https://www.stuff.co.nz/life-style/h...mmentators-say

I guess the relevant question would be - how much of this housing price drop is already priced into OCA and the other retirement villages? Given that some of them dropped already by 30% plus to their recent peak, market might be positively surprised if house prices just drop by e.g. 20% (which would be less than 2/3rd of last years gain).

And lets not forget - we start to open the borders (sort of) for the first time in two years and more than a million Kiwis overseas locked out of NZ might want to come home. Will be interesting to see what this does to our housing market?

Remember - markets are forward looking

Ah yes - and just remember how good the analysts have been in the past to predict house prices ... while they predicted 10 out of the last 2 slumps, they often don't even get the direction right (though if they say "up", they are much more likely to be correct, then if they say "down" - I guess that's why analysts like to be optimists ;

[mcdongle]

I wonder how much their developments are going to be held up due to shortages, i was talking to an old colleague and the GIB shortage is real, 14 week wait and then its rationed after that.

[James108]

I wonder how much their developments are going to be held up due to shortages, i was talking to an old colleague and the GIB shortage is real, 14 week wait and then its rationed after that.

I would assume developers and their contractors on the scale of Oceania are much better placed to deal with these lead times than smaller developers. Although no doubt it will have some impact.

[Beagle]

I would assume developers and their contractors on the scale of Oceania are much better placed to deal with these lead times than smaller developers. Although no doubt it will have some impact.

Yes the team working on the Waimarie development are huge https://www.argon.co.nz/

[Posh]

I went past the Waimarie St development last week and construction is moving along - sorry can't seem to upload photo but looks about 3/4 storeys high already

[bottomfeeder]

Waimarie Development not set to be completed until middle of 2023. Thats why I believe the SP is in the doldrums. Looks like it will be 12 months before it reaches its true potential. Still I also dont believe it will get much cheaper than it is now.

[winner69]

So no more of this 'point of infliction' stuff

The new story is - 'keep the faith - we have Waimarie'

Like that - sounds less painful

[Beagle]

I have come around to thinking the year ended 31 March 2023 is not going to be that crash hot at all with ongoing excessive Covid costs, more disputes with this hapless incompetent Govt over care fees and a very significant decrease in house prices. I think the market is merely front running that reality a bit and OCA is no screaming bargain where its priced right now.

I am more hopeful that FY24 will see some pretty modest eps growth but only if the extraordinary rate of cost pressures with staff can be reasonably controlled. The problem that I foresee is that there's real potential in the healthcare sector for those working in it to think they deserve ongoing MASSIVE annual increases in their pay rates and for management obsessed with all things care being the be all and end all to kowtow to any demands no matter how unreasonable they may be.

In a nutshell, because of this pandemic I think the chances of rampant wage cost inflation really taking off are worse than they have been in the past and management have a very poor track record of trying to control costs. Australian nurses striking despite their pay being heaps more than here may be a potender of trouble coming in the care sector.

The other day, chatting about this to a friend I described Nurses as the "hottest profession in the world" I wasn't referring to how a pretty nurse in uniform can be nice eye candy, rather that the world-wide demand for trained nurses means they can command HUGE money overseas. Implications for pay rates here...?

Maybe $50 per hour pay rates 2 years from now ? seeing annual income before overtime of over $100,000 for nurses, maybe even more ? Sure, few would argue they're not worth it with the risks they are taking but will the Government fund that ?

[iceman]

I guess the relevant question would be - how much of this housing price drop is already priced into OCA and the other retirement villages? Given that some of them dropped already by 30% plus to their recent peak, market might be positively surprised if house prices just drop by e.g. 20% (which would be less than 2/3rd of last years gain).

And lets not forget - we start to open the borders (sort of) for the first time in two years and more than a million Kiwis overseas locked out of NZ might want to come home. Will be interesting to see what this does to our housing market?

Remember - markets are forward looking

Ah yes - and just remember how good the analysts have been in the past to predict house prices ... while they predicted 10 out of the last 2 slumps, they often don't even get the direction right (though if they say "up", they are much more likely to be correct, then if they say "down" - I guess that's why analysts like to be optimists ;

BP the highlighted part in your post is utter rubbish. Saying all the Kiwis living overseas want to come back home when the borders open. Yes there are about 1 million Kiwis living overseas but NOT many of them will be moving back. Many feel totally disgusted with and disconnected from NZ now and most live a good life where they are. There are many foreign borne people living in NZ that may move back offshore after the last 2 years and so will many young Kiwis. My bet is we will see a significant net outflow of people when the borders properly open.