OCA - Oceania Group - retirement villages

[Cyclical]

Early feedback and mood of the market from the coalface. Significant majority of houses passed in with no bids. Start of a trend I reckon.
https://www.oneroof.co.nz/news/39161

I'm calling it now. The tailwinds for this sector are over. There are better opportunities out there than this sector and I am glad I only have a very modest allocation, circa ~ 5% to the retirement sector now.

Most of us have been calling it since Tuesday morning, Beagle ;-)

[davflaws]

Eventually, high prices will stimulate supply or other solutions. Its a market. That's how markets work. Socialism on the otherhand.... does not work.

Socialism works fine as part of a mixed economy. Markets work fine and produce socially useful results without regulation or intervention in some cases, and don't work fine without regulation and intervention in others. In these cases, the socially harmful effects of market failure always fall most heavily on the have nots.

Capitalism works fine to produce things, though the "hidden" costs (environmental degradation, education and training and health and welfare of the workforce are often socialised). Unregulated capitalism is lousy at distributing the fruits of that production (Google Picketty). Everyone is worse off as a result.

And since this is an OCA thread - I think OCA will be well placed to rocket away after the capital raise since I understand it will be EPS accretive and the 20% rise in property prices has not yet been reflected in OCA revaluations.

[iceman]

Furthermore rents literally can’t increase beyond what people can afford.

That statement is plain wrong. The Government is currently paying about $37M in accommodation supplements per week as well as who knows how much in "emergency housing". Rents will without a shadow of doubt to up significantly, starting 1 October. This silly Government will be paying most of that increase through accommodation supplements. Take with one hand to give with the other, but back to thee same people that you took it of in the first place. Can't get any more socialist than that :-)

[Panda-NZ-]

Why don't rents go down when costs ( like 100 year lows for interest rates) go down.

Maybe costs are mostly irrelevant.

[Beagle]

Most of us have been calling it since Tuesday morning, Beagle ;-)

LOL I always act first, busily adjust my portfolio and call it later

[Beagle]

It's a very good decision if you're a wealthy property investor that actually owns the properties. It's a very good decision if you're a future first home buyer. It's a very good decision if you want to collect more tax (although as beagle points out, the longer term outcome for the government coffers will probably be negative). However, for everyone else, including renters, investors (I'm not just talking property investors), business owners and anyone that actually wants to make a go of things and not depend on the state, it's an absolute shocker in terms of the impact it will have and the message it sends. Just like the ban on oil and gas exploration and complete lack of consultation on that. I actually thought Grant was doing a pretty good job, but not anymore. Remains to be seen if it breaks the ponzi scheme that has allowed them to keep the economy bubbling along this last year...if there are serious repercussions there, then we might actually see this government get the boot next time...but I doubt it, there are too many blind socialists out there fully sold on the story, in the belief the inflection point is nigh.

Well said. The Kiwi dollar has had a significant fall since their punitive new tax regime was announced. This will suck the wind out of the economic sails and we'll come "off the foils" for sure. They are completely clueless and have no idea the message they have just sent. They simply cannot be trusted.

[Cyclical]

Why don't rents go down when costs ( like 100 year lows for interest rates) go down.

Maybe costs are mostly irrelevant.

Maybe some landlords have refrained from increasing rents due to the mortgage being easier to service, or maybe a good chunk of them are still paying 4% plus on terms locked in pre covid, or maybe the lower servicing costs have been directed towards investment in the healthy homes requirements. Fear not, they'll being going up a lot quicker for the next few years. One of the lovely side effects of this change is that while landlords might be 120 to 150 a week out of pocket because of it, they'll need to bump up the rent 150% of that figure just to break even, assuming a 33% marginal rate...marvellous.

[justakiwi]

Taken to PM instead.

LOL I always act first, busily adjust my portfolio and call it later

[Panda-NZ-]

Well said. The Kiwi dollar has had a significant fall since their punitive new tax regime was announced. This will suck the wind out of the economic sails and we'll come "off the foils" for sure.

Every farmer voted for labour this time partly due to the lower NZD.

That should keep on going hopefully. Many regional electorates turned marginal seats.

[Cyclical]

Every farmer voted for labour this time partly due to the lower NZD.

That should keep on going hopefully. Many regional electorates turned marginal seats.

Lower NZD? I suspect it was more to do with Jacinda being so kind, and National imploding, more than anything else.