Summerset Group’s first quarter sales dipped 4.2 percent and the Wellington-based retirement village operator and developer says it is beginning to see some impact from a slowing property market in Auckland and Christchurch.
Summerset said it sold 137 occupation rights in the three months to March 31 versus 143 in the same period a year earlier. Of those, 71 were new sales, up 4.4 on the year. Resales were down 12 percent at 66, it said.
Summerset chief executive Julian Cook said that sales are consistent with levels seen in the first quarter of 2018 and are “tracking well” despite flat property markets in Auckland and Christchurch.
“We are seeing some increased settlement times due to the slowing property market in Auckland and Christchurch, however, we continue to see good interest in our villages,” he said.
Nationally, annual house price growth was 2.6 percent in March versus 3.0 percent in February, according to the latest Quotable Value data released this week. In the Auckland region, prices were 1.5 percent down on a year ago while in Christchurch they were up 0.6 percent on the year.
New Zealand’s retirement village operators are on a drive to push new development across the nation as they latch on to an ageing demographic providing a tailwind to the sector. The long-term trend has been supported by rapid property price gains, where prospective residents selling into a rising market could pay higher prices for retirement village units. Recently, however, they have begun to face headwinds from a cooling housing market.
Summerset has 25 villages completed or in development across the country and provides a range of living options and care services to more than 5,000 residents.
The stock last traded at $6.53 and is up 2.5 percent so far this year.