The absolute focus during the current election debate on Auckland housing is nothing new to any of us, in fact I am sure we are all sick and tired of hearing about it, particularly those of us who reside in Auckland. However, the focus has been on the ability of "young people" being able to afford a house in Auckland, the cry to fix this problem has been wide spread, but the crucial point is the cost of land and its availability. A property novice would certainly identify that as a key issue.
Over the past weekend, a friend of mine, who had been considering his age and contemplating moving, decided that a retirement village was the answer. He confided in me that despite his property value of anything he purchased in a retirement village being eroded immediately quickly, he felt the security of a Village environment was better for him. That’s his call and I support him as "security" is an essential part of the aging process, but at what cost?
As he explained, he is spending $1.0 million to purchase an apartment. On the basis of him being there for at least 3 years, he will have a property that is worth no more than $700,000 when he sells it. During our discussions, I explained this to him. I also explained that there will be annual charges in relation to his occupation.
"We then discussed the results of the various retirement village groups in that they had achieved outstanding levels of profit in the past year all driven by capital gains."
I also explained to him, the fact that the Village owner retains the capital gain over time. He wasn't aware of this factor even though he knew that the original $1.0 million purchase would retreat to $700,000 after just a few years. The point beyond the original purchase is lost on most people and my friend is no exception.
His one goal was to get into a "secure" environment, and the fact the he could afford to do so, occupied his whole thought process. The fact that over time his original $1.0 million purchase could be worth $1.5 or $2.0 million to the Village owner didn't seem to worry him. Consequently he will proceed with the purchase, and the Village owner will achieve another healthy financial gain.
Isn't this all a bit unfair and rather sad? I have a book in my home Library which is a real keepsake. It’s a Walt Disney Book called "Robin Hood and his Merrie Men" It is unique in that it is the story of the film which is from the same name, and it starred Richard Todd and has some great photos. The story of Robin Hood is traditionally a story of robbing the rich to pay the poor.
Village developers are a reflection of that story, but rather it may well be “robbing the poor to pay the rich". The majority of people who are to purchase in Retirement Villages, would in the main “working tax” paying Kiwis. Their lives may well have been filled with hardship and difficult times all of which have been surmounted. Most would have lived by the law of the land and bought up families.
"So where are the politicians as to the fairness of the deals in retirement villages?"
Where are they saying that just maybe there should be a sharing of the capital gain, that's all, just a sharing. What's the difference between a young person wanting to buy a home in Auckland and an older person who lives there and wants to move into a retirement Village?
Sometimes, we need to get the balance right in life. The pressure on Auckland over the next 10 years will be immense. Forget the roading issues, the key issue will be housing the elderly, not new immigrants or young people trying to but their first homes. Spreading the benefits of aging will assist all demographics. The sooner this is addressed, the better for us all.
Woolworths Group is an Australasian retail giant, but here in New Zealand it’s best known for its Countdown supermarkets. The company also supplies Fresh Choice and SuperValue franchised supermarkets.
In the last year, this “New Zealand Food” business performed well, with total sales up 2.1% for the year to June 2017. EBIT was flat on last year. Sales were $6.2 billion, and EBIT $309 million, pretty substantial figures in a New Zealand context. Overall, the Countdown business seems in good heart, and Woolworths have plans to keep on growing supermarket numbers in the medium term.
In Australia, where most of Woolworths Group’s business is located, it’s much more of a mixed bag. The Big W discount department stores are struggling, and of course the Group has also closed its unsuccessful Masters hardware chain. The Ezibuy clothing and homewares business was sold, most likely for a lot less than Woolworths originally paid for it. On the other hand, the liquor and tavern businesses seem to be trading well.
In the Press
Heat from Auckland's previously red-hot market is now being seen in other regions, where prices are soaring. New figures showed house prices in the country's biggest city have settled at an estimated median value of $1.04m - zero growth across the wider region in the quarter to the end of July.
A Wellington high-rise, which is again home to global brewing giant Lion, is up for sale. The IntilectaCentre on Murphy St, Thorndon began life in 1970 as the head office for New Zealand Breweries or Lion as it was then known.
Everybody wants to talk about Amazon’s arrival into Australia. The online mega-retailer confirmed its launch into Australia in April, and has been preparing to send its operation live ever since. The million-dollar question is, will it cross the Tasman? And how will it affect Kiwi retailers?
Plans are afoot for a significant business park in Upper Hutt aimed at providing Wellington businesses with a place to go in case of disaster. Developer Willis Bond & Co is proposing to build a 50,000 square metre multi-use campus on part of the old AgResearch site at Wallaceville.