OCA - Oceania Group - retirement villages

[Habits]

Judging by this thread the Cindy the tooth ferry is hitting many nails on the head.
What does the multi property owning landlord offer to our society other than self interest and exploitation of a housing need.
Can anyone point me to the OCA thread?
Need to catch up on Beagle talking with forked tongue.

Gee you have issues. As for Beagle, when he is not here people miss his posts... but you dont have to take his advice, form your own opinion and take ownership

[Waltzing]

The model for retirement villages might not be perfect from a social values perspective for all members of society.

There is no doubt that for many people they provide the hope of a safe place for loved ones that need care.

There are no super profits in the OCA model so far.

MR B is entitled in the market to rebalance his portfolio at his discretion at any time and is not required to make any disclosures; no shareholder should have to in any stock unless required by the market regulator under statue law.



DISC: Holding and not selling a small holding.

[Greekwatchdog]

Back to OCA. Those live in Akl. What are your thought on the Hobsonville Point acquisition? Does it fit in to there Meadowbank/Sand portfolio mix?

[James108]

There is a summerset and will soon be a ryman in hobsonville point. But this village is already established so low risk I imagine. Hobsonville point is a very nice area with great access to the motorway and ferry. I imagine the geographical ‘catchment’ is quite large.

[bull....]

from a t/a perspective the uptrend from covid lows has been broken not only oca but all retirement stocks. from a fundamental perspective macro headwinds due to govt intervention in the market will hamper continued growth going forward and the uncertainty in regards will they close the retirement tax loophole , probably not until theres over supply but who knows for sure. wont be long into the future now when this industry becomes a sunset industry reliant only on churn and care fee's for profit.

[winner69]

from a t/a perspective the uptrend from covid lows has been broken not only oca but all retirement stocks. from a fundamental perspective macro headwinds due to govt intervention in the market will hamper continued growth going forward and the uncertainty in regards will they close the retirement tax loophole , probably not until theres over supply but who knows for sure. wont be long into the future now when this industry becomes a sunset industry reliant only on churn and care fee's for profit.

Loopholes seem to be an endangered species so maybe retirement tax free gains are an endangered species as well

[Bjauck]

Loopholes seem to be an endangered species so maybe retirement tax free gains are an endangered species as well

...and will the current government continue to claim things are loopholes, when they are actually standard practice, to "massage" favourable electoral support? So as the current government descends to Orwellian tactics, who knows what their next target will be.

Owner-occupied home real estate ownership has far greater "loopholes" using the definition used by the Labour government. It is not taxed on capital gains. It does not have a bright line test and the net benefit derived from it is not subject to either a fringe benefit tax or FDR fair dividend or income tax. Why didn't they tackle that more glaring "loophole"?

[bull....]

Loopholes seem to be an endangered species so maybe retirement tax free gains are an endangered species as well

maybe according to interest.co.nz article the ird will decide during the consultation phase

Different tax rules for commercial and residential investment properties create uncertainty for owners of mixed use premises

The changes mean that owners of a residential investment property will no longer be able to claim the interest portion of their mortgage payments as a tax deductible expense, and if they sell the property within 10 years of purchasing it they will be taxed on any capital gain (commonly referred to as the bright-line test).
The new rules don't apply to commercial investment properties such as shops, offices, warehouses and factories, which will not be subject to the bright-line test and their owners will still be able to claim mortgage interest as a tax deductible expense.
But the Government is yet to decide how the changes to interest deductibility rules will be applied to mixed use properties, if at all, leaving thousands of investors up in the air on the issue for the time being at least.
Mixed use properties are surprisingly common and are growing in number

https://www.interest.co.nz/property/...perties-create

hence the market will be skewed towards commercial investment for tax reasons and the build to rent model will become the new thing eg mirvac model in aus. kpg is currently investigating this as well. the new model will replace mums and dads as rental providers in the long run

[Beagle]

I am pleased I rebalanced earlier this month and (for the record) clearly noted why I had done so at the time. (The rate of human resource cost growth since listing at a CAGR of 7.3% is a real handbrake on growth).

The Govt's move this week overturned a fundamental tax principle of business expense deductibility that goes back as far as I can ever remember, certainly at least 60 years to the Income Tax Act 1961.

Its radical, destabilizing and proves almost anything is possible (including attacking the retirement sector's tax free gains). Its naked "envy socialism" at the most ugly I can ever recall and represents the most egregious breech of fundamental rights of business people to claim legitimate business expenditure I have ever seen. Where is National saying they will immediately repeal this is they get elected ?

What worries me is the hordes of ignorant "have nots" who this extremist socialism appeals too. These people have no understanding of the tax system and what an extreme and egregious breech of fundamental rights this is. There's probably millions of them. This is what worries me. If this sledgehammer to bust down the real estate market doesn't work, what's next ? What sector is next, the retirement sector ?

At best I see sustained selling pressure from badly disaffected landlords balancing out excess immigration and getting the housing market back into balance from a demand supply perspective and house prices tracking in line with inflation, no real inflation adjusted increase in housing prices for the foreseeable future. I think a scenario this benign is unlikely. (This undermines my previous expectations of 3-4% house price inflation per annum and somewhat undermines my expectations of eps growth for OCA).

At worst I can foresee a significant fall in the housing market as a glut of new supply and substantial wave of disaffected investor selling overwhelms market demand and as prices start to fall further substantial waves of investor selling has the effect of crashing the market by 30-50% over the next few years. This would totally undermine my expectations of underlying eps growth in OCA in the years ahead.

The actual outcome is likely to be somewhere in the middle of the above two scenario's and there will be a meaningful impact on OCA's ability to grow eps. How meaningful is quite frankly anyone's guess.

What's happened is a game changer, its not closing a loophole (Xi Jinping would be proud of that sort of propaganda and might even be taking notes)...which is why I have further reduced my stake in this sector to just a little over 3% this week. ( I am undecided on whether or not to apply for $50K worth under the retail offer) I'm not feeling favorable about it at present because I think there are better companies in sectors that aren't being hit with a a radical socialist sledgehammer, or have already been heavily coerced to repay the wage subsidy (WHS is a good example).

Caveat - Predictions about the future are notoriously difficult to get right. I am happy to hold a modest stake in OCA and hope that someone in Govt sees common sense or that OCA can make some modest progress with growth despite the tough outlook for real estate going forward. Hopefully one day in the future this draconian and extremist socialism will be reversed...

[Beagle]

...and will the current government continue to claim things are loopholes, when they are actually standard practice, to "massage" favourable electoral support? So as the current government descends to Orwellian tactics, who knows what their next target will be.

Owner-occupied home real estate ownership has far greater "loopholes" using the definition used by the Labour government. It is not taxed on capital gains. It does not have a bright line test and the net benefit derived from it is not subject to either a fringe benefit tax or FDR fair dividend or income tax. Why didn't they tackle that more glaring "loophole"?

For those not familiar with the expression
Orwellian" is an adjective describing a situation, idea, or societal condition that George Orwell identified as being destructive to the welfare of a free and open society. It denotes an attitude and a brutal policy of draconian control by propaganda, surveillance, disinformation, denial of truth (doublethink), and manipulation of the past, including the "unperson"—a person whose past existence is expunged from the public record and memory, practiced by modern repressive governments.