Biggest retirement home developer decides it can't hold on any longer as market slump goes deeper for longer; Ryman slashes building plans by 70% and plans to dump some of its land bank
The trend I'm watching which may be a factor on the Ryman story is how intelligent homecare robot "companions" will soon enable us all to live longer in our own homes, potentially right up until death. Only a few years now until they're $4999 at PBTech...
I really hope so, I don't see how hubby and I are ever going to be able to afford one of those homes, fortunately we are both tech heads so we can probably build our own robots!
Non digital companions have been known to exploit elders; not so much a problem with the electronic version, unless the muskrat gets to re program it of course.
Ryman are following the KO model - stop building, sack staff, sell undeveloped land. Would the Govt step in and amalgamate them if Ryman went into receivership??
No, they'd probably rush to Cannibalise Ryman's properties & Hire another property management Group to further skyrocket their Profits while they scrambled to sell off the Retirement Villages to offshore Owners waiting to cash in on Fire Sale investments.
National and ACT are Vulture Capitalist Parties that won't hesitate to Asset Strip whatever they can get their hands on to create Stakeholder opportunities and profits to their Mates...
That way they could roll the KO properties into the whole big Housing for profits Portfolio and unload the Lot to Offshore investment Funds.
We're at the beginning of the same type of property downward Spiral that the US went through in 2009 in the GFC. That was arranged by Bankers and Mortgage Companies, so they could get Mom's & Pop's out of their high value properties when the prices dropped and the folks with Big New houses and Big Reverse & Interest only Mortgages ended up with Negative Equity and walked away from their Homes and mortgages, so the Banks & Mortgage Companies could make a killing by sitting on them until the next Property Boom Cycle came along, shortly afterward and Speculators could become Renter's and charge what they liked by using a Software Program called "Real Page" to cyclically increase Rents on a National Scale.
Bernard, have you heard of "Real Page" Software being used by Landlords in NZ??? I suspect it's already here, but haven't heard it mentioned in the Media at this point. It's another Heritage & Atlas Group "thing" to pass costs on to the Poor and Socialise Profits for the Rentièr unearned income Class of investor.
It would be extremely lucrative here in NZ with a CGT, or Windfall Profits Taxes to worry about!
Sorry, "Without" a CGT, or Windfall Profit Taxes to worry about. Just free money, basically without having to lift a finger off their Keyboard Portfolio's of Diversified investments off the Middle & Working Classes...
Bernard, I know you're an economist and all, and I also know that you've got a pretty broad and human-centred take on things, but the framing of this seems to feed into this problematic mindset that exists in NZ that the 'housing market' is an entity the wellbeing of which we should care about as if it were a person (and more than actual people), and the 'slump' language to me obscures the reality that the cost of homes has been and is way out of kilter with what people can actually realistically afford (ie. in relation to average incomes) and the 'slump' could also be described as just a move in the right direction away from massive over-pricing. Slump also assumes it can't possibly be a long-term trend - why can't it? If the cost of homes can go from affordable to way off the charts in 20yrs, can it not go back the other way? What if our field of view extends 25yrs back and forward rather than 7? What if extends beyond 'housing market' to 'housing ecosystem'?
What you’re saying is true but I think from Bernard’s perspective and I agree. In Aotearoa the housing market is the economy, with bitsbits tacked on. If it’s bad then the wider economy is in a slump. I meant to add that it stopped being about housing long ago and became a commodity
I agree with Amanda’s comments on this. For our kids to remain in New Zealand we need cost of living to be more affordable, including the cost of housing. In many ways, as Amanda comments, this adjustment in house prices should be seen as a good thing. How do we promote the investment into productive businesses that may increase our wealth in real terms rather than unproductive houses? We need a government that strengthens the incentives to get out of housing and into things that increase our economy’s productivity.
Why not use a word like “correction” rather than “slump”?
I like the thinking on the framing. I have proposed various measures over the years to change the incentives. I prefer a low-rate levy on residential zoned land values to fund infrastructure and house building to increase supply and quality, and reduce rents. It would break land as an investment class. I think it would have to be done with a shift to a conventional tax break for pensions savings that are locked up to 65 and can't be used as a deposit for housing investment, including for owner occupied housing. The land tax would be progressive on the number of homes and whether or not it was occupied to force the hands of the landbankers.
If we were to pay a levy as a home owner how would it be structured. Currently pay rates to local government. Who would collect land value levy & would it be kept separate in an Infrastructure Fund which would be untouchable by changing governments. The pension fund I paid for many years was secretly squandered by Muldoon & and now I have to listen to folk moaning about subsidising superannuation payments.
Basically I can see home/land levy makes sense & is fair.
You're right Amanda. If it weren't for the embedded tax incentives skewing cash into leveraged land then prices (and rents) would be more affordable. But when your economy is nothing but the housing market, then that model becomes an existential issue. Hence the various bailouts and the refusal to let the market clear without some sort of intervention to keep it all going for a little bit longer (at least until my generation has gotten out.)
Also consider that our primary income (exports) sector is run on (cow or plane) emissions and that this income is used to cover costs (imports) of many of our lifestyle purchases - big cars and fossil fuels (more emissions). This lifestyle is largely dictated by our housing. The transport implications of this housing also creates a great deal of drag on productivity.
It's a vicious circle of dependency we have created on the "kiwi way".
Sorry. I love them. But plenty of feedback they were just too distracting. Especially for people trying to listen to the podcast while they were in the garden...surrounded by cicadas.
When I watched the video of the day and then read some of the dreadful comments below it, I rejoiced that few of these keyboard warriors will ever get near a decision-making position.
They are truly awful, I also had to stop reading NZ herald comments as it made me feel terrible - apparently all the bad things happening are a)the young b)the poor or c) Jacinda’s fault
I don't know much about economics but I do know that when things become too expensive people look for alternatives. I don't know what statistics say about the cost of funerals but I do know that many people see the cost as ridiculous so that now much less expensive ways of bowing out are more common.
More people see retirement villages as a rip off.
i read a while back that the most reliable companies to invest in were in Childcare and elder care. That is capitalism with no morals. I just sense that not as many people are taken in by slick marketing - that's the plus side of not having surplus money.
I think retirement villages will down as the biggest rip off of the first half of the 21st century (just like Y2K was in the 2nd half of the 20th). Average people needing to divest themselves of most of their assets for somewhere to live when they are old - and not even buy into an asset that will increase in value is just bizaire.
Agree. Why is living in a village desirable. Small homes are available at lesser or similar cost & independence is kept. Being old & budgeting to pay outgoings is similar to being young & paying outgoings. However for the old renting is a nightmare & pensioner villages seemed to have disappeared.
Maybe for some it's about the continuum of care from the independent unit, directly into a care unit if needed. That is the value of the retirement village is the confidence of knowing you can directly to that care, when the public system and not for profit's can't provide it.
Care Unit is promised,however if there is not a vacancy that does not happen. FACT If you do get entry to Care Unit, the price is very steep. Only for the wealthy is Care Unit possible.FACT Would it not be better to supply assistance to keep folk in independent homes paid by health system.
Yes, I personally think that as a country we should prioritise public health services for the older people in a way that allows them to live as they choose - such as in their own homes or in their independent unit in a village or in a rental or in a public home. i.e. a continuum of choices across the sector so individuals can choose what's best for them as their age/stage/situation changes. Some folk, yes with the means, choose a village option in the hope of that care being available if they need it...even Ryman's Investor Presentation says that they are looking at provision of Care Services within the Serviced Apartments due to their project Care Beds gap. To have the Health System pay for services would be awesome - but that would mean we'd have to choose collectively to care for the public health system and right now, that's not what was voted for or rather, that isn't what the current Government is doing. Thank fully we can collectively choose to do better in the future if we all put our mind to it.
While villages do represent a rip off, it is becoming increasingly difficult to get (and afford) home and garden help, which is the driver for some to move into a village.
Yes I get that. I am lucky that I hide away on Otago peninsula and so far can pay the help I need. No doubt less expensive than some other parts of the country. Have my overseas sons looking out for signs of the robot companion Ben Reid mentioned
I appreciate the perspective you’ve taken that Ryman is neither a villain or victim. They’re a canary in the housing stock. Whether that’s a gold mine or a coal mine remains to be seen…
interesting call from Ryman. It would be interesting to see how well the plans are developed for some of those sites. the Takapuna one is a hole in the ground, as they had started goundworks. it is now listed as a greenfield landbank? that doesn't sound like they are coming back for a while. this could get ugly.
As I get closer to retirement the way our retirement homes work is becoming of an increasing worry to me. for the average person (me) who now owns their own home, buying into one of these places is going to take all my assets. That means there won't be anything left for living. I'm just not sure how anyone is going to be able to afford to retire in 5 or 10 years time. Damnmit I don't want to work past 65 (I didn't want to work past 40). I'm not even sure we will be able to comfortably 'downsize' to a single story property on flat land.
How the heck people who don't own their own home do it I have no idea.
Just look at the Child poverty Statistic's to see how People forced to Rent are doing. Sooner, rather than later, Renter's are gonna hit the Wall when costs go through the roof on essentials like Food, Electricity & Insurance costs. Add Education and Healthcare to that and we'll soon have a new Wave of homeless trying to get out of NZ for Greener pastures someplace else when everything becomes unaffordable for even middle Class Working Families.
"Ryman Healthcare, under new management ..." is I think what is happening here. New management wants to be seen doing something, rightly or wrongly. They want to justify their appointment.
Take a biscuit maker for example. A new marketing manager means a new range of packaging, a 'refresh of the packaging to better represent today'. Whether increased sales result in paying back the costs of re-packaging ...
So, is Ryman's new management changing a tried and true process? Asking shareholders for a billion dollars and then saying we'll give you half of it back in a few year's time is a bit suspect. The billion dollars isn't enough to get rid of all debt, and instead of using land bank sales to further reduce debt they'll give it back to shareholders and remain under the thumb of their financiers.
Why would anybody invest in Ryman if they cancel their Shares Dividends and sit the next few years out without lifting a Hammer on building new properties. We're currently in the retraction - "Bust Part" of the housing Boom & Bust Cycle.
Ryman won't survive with a full blown housing Retraction & Bust Cycle that could last well beyond 2028 if things continue the same way as they started 2023 in.
Traditionally, our Housing market moves in 10 year Bust to Boom Cycles since Rogernomic's.
None of this will matter if our 50+% Trade Partner in China stops importing, or cuts way back on buying Kiwi Goods & Trump continues his Tariff Policy Terrorism. Trump won't be out of office until 2027 / 2028 at the earliest and he's determined to Stop China in its tracks.
We should start taking China in the Tasman doing Military Target Practice seriously I suppose. We're already on shaky ground with our Island neighbours in the Region being whittled away by China's offers of protectionism & Infrastructure Development for Ports where Warships & Weaponry can be stored! We sure don't need to be Meat in anybody's Trump Salad Sandwich!!!
My heart doesn't ache for Rayman and co. They are vultures and whenever I see the ads on TV for the beautiful high-end retirement villages all I can think of is on who's stolen land are you sitting and can those people you stole it from afford to buy your overpriced houses.
We know our housing market is a Ponzi scheme and it is just a matter of time before the house of cards will collapse. Perhaps this is the beginning. It will hurt, unless we get a govt that will be willing to collapse the banks instead of the people.
Maybe once the housing market collapses we will be able to rebuild an economy that looks after people instead of after property.
I wonder if you're right Bernard - hope so. I just see my knitting is in a huge mess because I kept going too long after I first fouled up and now canaries are looking interested in it.
This is interesting Bernard. I live in Cambridge and have looked on a Ryman built a mass of chicken coop like dwellings along a main road here. Next to roadworks that have gone on for a couple of years. Not surprised their sales have dropped. They were asking $770,000 per 2 bed 1 bath coop.
Not sure what the uptake has been.
Also do you know if it was Ryman that bought prime land in Karori then bailed?
Interesting without a capital gains tax, something else will come along eventually to guzzle up excess money for people in their later years. I also cannot see another peak like 2021 without the crazy low interest rates or removal of DTIs
Reading the Investor Presentation is rather sobering, when read from an older persons housing perspective for what will be likely scenario in 20+ years time. 350,000+ cumulative 75 year olds over next 20 years (page 17). A significant gap, worsening over time, of Care Bed's for those that need them.
"Ryman receives a significant part of its aged care revenues from government funding in both New Zealand and Australia" and "Te Whatu Ora has commenced a funding model review which is continuing. One option is to adopt a similar model to that used in Australia where increased aged care funding requirements are supported by greater user pays. Currently, annual price negotiations occur under contracts with Te Whatu Ora, with the aged care industry
strongly advocating for increases in funding to meet cost inflation which has eroded the value of this funding over time. If New Zealand government funding is not
increased, Ryman may need to consider withdrawing or reducing the number of available care beds across New Zealand." (page 47). Noting that one of Ryman's competitive advantages is to leverage the continuum of care as a rationale for moving into a village, so presumably they'll want to keep offering that advantage as otherwise people will stay in their own homes.
For those in their own homes, it doesn't feel like a lot of confidence for getting public services at home and the funding of not for profits in home care is not good. In the poorer segment, it's not looking good for an aging population, as the current Nov '24 Reset plan for Kāinga Ora (https://kaingaora.govt.nz/en_NZ/about-us/resetting-kainga-ora/ the pdf is on their website, pg 35), shows that the total housing stock may stay the same size (78,890 for the foreseeable) - i.e. likely an increasing crisis for the elderly of public homes without funding new ones. When taken with challenge for getting quality Care Services within the private rentals/homes given the current public health crisis and reducing Care Beds supply proportionally in private villages -- it's making me think I'll be working till I'm 80, just to be able to ensure I can pay to have someone undertake my personal cares when I get to that point....on the flip side, at least I'll have that choice (assuming physically/mentally able), unlike the more vulnerable members of our communities. Hmmm....needs abit more coordinated long term planning, communication and thought on how we are all going to live when more of us Kiwi's are older eh?
The trend I'm watching which may be a factor on the Ryman story is how intelligent homecare robot "companions" will soon enable us all to live longer in our own homes, potentially right up until death. Only a few years now until they're $4999 at PBTech...
I like that idea. Much better than Ryman and mates. Hope they hurry up.
I really hope so, I don't see how hubby and I are ever going to be able to afford one of those homes, fortunately we are both tech heads so we can probably build our own robots!
I’m putting in a pre-order
Non digital companions have been known to exploit elders; not so much a problem with the electronic version, unless the muskrat gets to re program it of course.
Already have the robot vacuum - love it. Recent discussion amongst neighbours (all retired or almost) reveals intentions to get robot lawn mowers.
Ryman are following the KO model - stop building, sack staff, sell undeveloped land. Would the Govt step in and amalgamate them if Ryman went into receivership??
No, they'd probably rush to Cannibalise Ryman's properties & Hire another property management Group to further skyrocket their Profits while they scrambled to sell off the Retirement Villages to offshore Owners waiting to cash in on Fire Sale investments.
National and ACT are Vulture Capitalist Parties that won't hesitate to Asset Strip whatever they can get their hands on to create Stakeholder opportunities and profits to their Mates...
That way they could roll the KO properties into the whole big Housing for profits Portfolio and unload the Lot to Offshore investment Funds.
We're at the beginning of the same type of property downward Spiral that the US went through in 2009 in the GFC. That was arranged by Bankers and Mortgage Companies, so they could get Mom's & Pop's out of their high value properties when the prices dropped and the folks with Big New houses and Big Reverse & Interest only Mortgages ended up with Negative Equity and walked away from their Homes and mortgages, so the Banks & Mortgage Companies could make a killing by sitting on them until the next Property Boom Cycle came along, shortly afterward and Speculators could become Renter's and charge what they liked by using a Software Program called "Real Page" to cyclically increase Rents on a National Scale.
Bernard, have you heard of "Real Page" Software being used by Landlords in NZ??? I suspect it's already here, but haven't heard it mentioned in the Media at this point. It's another Heritage & Atlas Group "thing" to pass costs on to the Poor and Socialise Profits for the Rentièr unearned income Class of investor.
It would be extremely lucrative here in NZ with a CGT, or Windfall Profits Taxes to worry about!
Sorry, "Without" a CGT, or Windfall Profit Taxes to worry about. Just free money, basically without having to lift a finger off their Keyboard Portfolio's of Diversified investments off the Middle & Working Classes...
I expect Ryman will get taken over by aprivate equity fund.
Bernard, I know you're an economist and all, and I also know that you've got a pretty broad and human-centred take on things, but the framing of this seems to feed into this problematic mindset that exists in NZ that the 'housing market' is an entity the wellbeing of which we should care about as if it were a person (and more than actual people), and the 'slump' language to me obscures the reality that the cost of homes has been and is way out of kilter with what people can actually realistically afford (ie. in relation to average incomes) and the 'slump' could also be described as just a move in the right direction away from massive over-pricing. Slump also assumes it can't possibly be a long-term trend - why can't it? If the cost of homes can go from affordable to way off the charts in 20yrs, can it not go back the other way? What if our field of view extends 25yrs back and forward rather than 7? What if extends beyond 'housing market' to 'housing ecosystem'?
What you’re saying is true but I think from Bernard’s perspective and I agree. In Aotearoa the housing market is the economy, with bitsbits tacked on. If it’s bad then the wider economy is in a slump. I meant to add that it stopped being about housing long ago and became a commodity
I agree with Amanda’s comments on this. For our kids to remain in New Zealand we need cost of living to be more affordable, including the cost of housing. In many ways, as Amanda comments, this adjustment in house prices should be seen as a good thing. How do we promote the investment into productive businesses that may increase our wealth in real terms rather than unproductive houses? We need a government that strengthens the incentives to get out of housing and into things that increase our economy’s productivity.
Why not use a word like “correction” rather than “slump”?
I like the thinking on the framing. I have proposed various measures over the years to change the incentives. I prefer a low-rate levy on residential zoned land values to fund infrastructure and house building to increase supply and quality, and reduce rents. It would break land as an investment class. I think it would have to be done with a shift to a conventional tax break for pensions savings that are locked up to 65 and can't be used as a deposit for housing investment, including for owner occupied housing. The land tax would be progressive on the number of homes and whether or not it was occupied to force the hands of the landbankers.
If we were to pay a levy as a home owner how would it be structured. Currently pay rates to local government. Who would collect land value levy & would it be kept separate in an Infrastructure Fund which would be untouchable by changing governments. The pension fund I paid for many years was secretly squandered by Muldoon & and now I have to listen to folk moaning about subsidising superannuation payments.
Basically I can see home/land levy makes sense & is fair.
You're right Amanda. If it weren't for the embedded tax incentives skewing cash into leveraged land then prices (and rents) would be more affordable. But when your economy is nothing but the housing market, then that model becomes an existential issue. Hence the various bailouts and the refusal to let the market clear without some sort of intervention to keep it all going for a little bit longer (at least until my generation has gotten out.)
Also consider that our primary income (exports) sector is run on (cow or plane) emissions and that this income is used to cover costs (imports) of many of our lifestyle purchases - big cars and fossil fuels (more emissions). This lifestyle is largely dictated by our housing. The transport implications of this housing also creates a great deal of drag on productivity.
It's a vicious circle of dependency we have created on the "kiwi way".
Well that's good because when I first read your heading thought you were the one selling !!
me too! And possibly stopping the podcast. And i've only just seen his dog!
That's true. I am very keen to show you Tim's smile (and mine) many times.
me too! And possibly stopping the podcast. And i've only just seen his dog!
Sorry to scare you all. :)
For the record I loved the cicadas in the background
me too, but I can't listen while I'm out in the garden, between his cicada's and my cicada's i have no chance of hearing a word he says.
Ha! That's way too many cicadas!
I have tinnitus, so cicadas all year round. I'm so lucky.
me too, but I can't listen while I'm out in the garden, between his cicada's and my cicada's i have no chance of hearing a word he says.
Sorry. I love them. But plenty of feedback they were just too distracting. Especially for people trying to listen to the podcast while they were in the garden...surrounded by cicadas.
When I watched the video of the day and then read some of the dreadful comments below it, I rejoiced that few of these keyboard warriors will ever get near a decision-making position.
Never read the comments on twitter and youtube is my rule of thumb Garry. And don't get me started about Stuff and NZ Herald comments.
They are truly awful, I also had to stop reading NZ herald comments as it made me feel terrible - apparently all the bad things happening are a)the young b)the poor or c) Jacinda’s fault
I don't know much about economics but I do know that when things become too expensive people look for alternatives. I don't know what statistics say about the cost of funerals but I do know that many people see the cost as ridiculous so that now much less expensive ways of bowing out are more common.
More people see retirement villages as a rip off.
i read a while back that the most reliable companies to invest in were in Childcare and elder care. That is capitalism with no morals. I just sense that not as many people are taken in by slick marketing - that's the plus side of not having surplus money.
I think retirement villages will down as the biggest rip off of the first half of the 21st century (just like Y2K was in the 2nd half of the 20th). Average people needing to divest themselves of most of their assets for somewhere to live when they are old - and not even buy into an asset that will increase in value is just bizaire.
Agree. Why is living in a village desirable. Small homes are available at lesser or similar cost & independence is kept. Being old & budgeting to pay outgoings is similar to being young & paying outgoings. However for the old renting is a nightmare & pensioner villages seemed to have disappeared.
Maybe for some it's about the continuum of care from the independent unit, directly into a care unit if needed. That is the value of the retirement village is the confidence of knowing you can directly to that care, when the public system and not for profit's can't provide it.
Care Unit is promised,however if there is not a vacancy that does not happen. FACT If you do get entry to Care Unit, the price is very steep. Only for the wealthy is Care Unit possible.FACT Would it not be better to supply assistance to keep folk in independent homes paid by health system.
Yes, I personally think that as a country we should prioritise public health services for the older people in a way that allows them to live as they choose - such as in their own homes or in their independent unit in a village or in a rental or in a public home. i.e. a continuum of choices across the sector so individuals can choose what's best for them as their age/stage/situation changes. Some folk, yes with the means, choose a village option in the hope of that care being available if they need it...even Ryman's Investor Presentation says that they are looking at provision of Care Services within the Serviced Apartments due to their project Care Beds gap. To have the Health System pay for services would be awesome - but that would mean we'd have to choose collectively to care for the public health system and right now, that's not what was voted for or rather, that isn't what the current Government is doing. Thank fully we can collectively choose to do better in the future if we all put our mind to it.
While villages do represent a rip off, it is becoming increasingly difficult to get (and afford) home and garden help, which is the driver for some to move into a village.
Yes I get that. I am lucky that I hide away on Otago peninsula and so far can pay the help I need. No doubt less expensive than some other parts of the country. Have my overseas sons looking out for signs of the robot companion Ben Reid mentioned
I appreciate the perspective you’ve taken that Ryman is neither a villain or victim. They’re a canary in the housing stock. Whether that’s a gold mine or a coal mine remains to be seen…
Great point about Ryman being a canary in the mine.
Share please
interesting call from Ryman. It would be interesting to see how well the plans are developed for some of those sites. the Takapuna one is a hole in the ground, as they had started goundworks. it is now listed as a greenfield landbank? that doesn't sound like they are coming back for a while. this could get ugly.
As I get closer to retirement the way our retirement homes work is becoming of an increasing worry to me. for the average person (me) who now owns their own home, buying into one of these places is going to take all my assets. That means there won't be anything left for living. I'm just not sure how anyone is going to be able to afford to retire in 5 or 10 years time. Damnmit I don't want to work past 65 (I didn't want to work past 40). I'm not even sure we will be able to comfortably 'downsize' to a single story property on flat land.
How the heck people who don't own their own home do it I have no idea.
Just look at the Child poverty Statistic's to see how People forced to Rent are doing. Sooner, rather than later, Renter's are gonna hit the Wall when costs go through the roof on essentials like Food, Electricity & Insurance costs. Add Education and Healthcare to that and we'll soon have a new Wave of homeless trying to get out of NZ for Greener pastures someplace else when everything becomes unaffordable for even middle Class Working Families.
"Ryman Healthcare, under new management ..." is I think what is happening here. New management wants to be seen doing something, rightly or wrongly. They want to justify their appointment.
Take a biscuit maker for example. A new marketing manager means a new range of packaging, a 'refresh of the packaging to better represent today'. Whether increased sales result in paying back the costs of re-packaging ...
So, is Ryman's new management changing a tried and true process? Asking shareholders for a billion dollars and then saying we'll give you half of it back in a few year's time is a bit suspect. The billion dollars isn't enough to get rid of all debt, and instead of using land bank sales to further reduce debt they'll give it back to shareholders and remain under the thumb of their financiers.
Why would anybody invest in Ryman if they cancel their Shares Dividends and sit the next few years out without lifting a Hammer on building new properties. We're currently in the retraction - "Bust Part" of the housing Boom & Bust Cycle.
Ryman won't survive with a full blown housing Retraction & Bust Cycle that could last well beyond 2028 if things continue the same way as they started 2023 in.
Traditionally, our Housing market moves in 10 year Bust to Boom Cycles since Rogernomic's.
None of this will matter if our 50+% Trade Partner in China stops importing, or cuts way back on buying Kiwi Goods & Trump continues his Tariff Policy Terrorism. Trump won't be out of office until 2027 / 2028 at the earliest and he's determined to Stop China in its tracks.
We should start taking China in the Tasman doing Military Target Practice seriously I suppose. We're already on shaky ground with our Island neighbours in the Region being whittled away by China's offers of protectionism & Infrastructure Development for Ports where Warships & Weaponry can be stored! We sure don't need to be Meat in anybody's Trump Salad Sandwich!!!
Bone spurs. Get some of them and we'll be safe whatever happens.
A private equity fund might buy Ryman.
My heart doesn't ache for Rayman and co. They are vultures and whenever I see the ads on TV for the beautiful high-end retirement villages all I can think of is on who's stolen land are you sitting and can those people you stole it from afford to buy your overpriced houses.
We know our housing market is a Ponzi scheme and it is just a matter of time before the house of cards will collapse. Perhaps this is the beginning. It will hurt, unless we get a govt that will be willing to collapse the banks instead of the people.
Maybe once the housing market collapses we will be able to rebuild an economy that looks after people instead of after property.
Thanks Merav. I don't think it will collapse without a change to the tax incentives and the funding of infrastructure at the very least.
Hopefully this will be a one term govt and the next one will bring a change in the tax system.
I wonder if you're right Bernard - hope so. I just see my knitting is in a huge mess because I kept going too long after I first fouled up and now canaries are looking interested in it.
Knitting is my solace I put it aside when reading the mess of current politics.
This is interesting Bernard. I live in Cambridge and have looked on a Ryman built a mass of chicken coop like dwellings along a main road here. Next to roadworks that have gone on for a couple of years. Not surprised their sales have dropped. They were asking $770,000 per 2 bed 1 bath coop.
Not sure what the uptake has been.
Also do you know if it was Ryman that bought prime land in Karori then bailed?
Interesting without a capital gains tax, something else will come along eventually to guzzle up excess money for people in their later years. I also cannot see another peak like 2021 without the crazy low interest rates or removal of DTIs
Reading the Investor Presentation is rather sobering, when read from an older persons housing perspective for what will be likely scenario in 20+ years time. 350,000+ cumulative 75 year olds over next 20 years (page 17). A significant gap, worsening over time, of Care Bed's for those that need them.
"Ryman receives a significant part of its aged care revenues from government funding in both New Zealand and Australia" and "Te Whatu Ora has commenced a funding model review which is continuing. One option is to adopt a similar model to that used in Australia where increased aged care funding requirements are supported by greater user pays. Currently, annual price negotiations occur under contracts with Te Whatu Ora, with the aged care industry
strongly advocating for increases in funding to meet cost inflation which has eroded the value of this funding over time. If New Zealand government funding is not
increased, Ryman may need to consider withdrawing or reducing the number of available care beds across New Zealand." (page 47). Noting that one of Ryman's competitive advantages is to leverage the continuum of care as a rationale for moving into a village, so presumably they'll want to keep offering that advantage as otherwise people will stay in their own homes.
For those in their own homes, it doesn't feel like a lot of confidence for getting public services at home and the funding of not for profits in home care is not good. In the poorer segment, it's not looking good for an aging population, as the current Nov '24 Reset plan for Kāinga Ora (https://kaingaora.govt.nz/en_NZ/about-us/resetting-kainga-ora/ the pdf is on their website, pg 35), shows that the total housing stock may stay the same size (78,890 for the foreseeable) - i.e. likely an increasing crisis for the elderly of public homes without funding new ones. When taken with challenge for getting quality Care Services within the private rentals/homes given the current public health crisis and reducing Care Beds supply proportionally in private villages -- it's making me think I'll be working till I'm 80, just to be able to ensure I can pay to have someone undertake my personal cares when I get to that point....on the flip side, at least I'll have that choice (assuming physically/mentally able), unlike the more vulnerable members of our communities. Hmmm....needs abit more coordinated long term planning, communication and thought on how we are all going to live when more of us Kiwi's are older eh?