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Summerset's Q2 sales down 9.6%; says market stabilising

Monday 8th July 2019

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Summerset Group’s second-quarter sales were down 9.6 percent from a year earlier, but the Wellington-based retirement village operator says property market sentiment has stabilised.

Summerset said it sold 141 occupation rights in the three months to June 30, versus 156 in the same period a year earlier.

Of those, 65 were new sales while resales numbered 76. In the same period a year earlier, 77 were new sales while 79 were resales.

Summerset chief executive Julian Cook said total sales for the quarter were stable, with slightly more sales than the first three months of 2019 when sales numbered 137.

Total sales in the first six months of the year were 278 versus 299 a year earlier.

According to Cook, property market sentiment has stabilised and demand for Summerset’s Auckland villages stood out.  

“Auckland’s Ellerslie and Hobsonville villages are our top selling villages so far this year,” he said.

Previously, the retirement village operator had signalled the slowing property market was a headwind.

QV data last week showed residential property values rose at a 2 percent annual pace across New Zealand to an average $687,021, slowing from the 2.3 percent pace reported in May. Auckland remained a weight on the national average, with property values shrinking 2.7 percent to $1.03 million in June from a year earlier.

Summerset will open three new villages this year in Avonhead, in Christchurch; Richmond, near Nelson; and at Kenepuru, north of Wellington. It expects good volumes of new sales from those villages.

“As with recent years, completion of new homes is weighted to the second half of 2019 and we expect sales to reflect that with higher volumes over the second half,” said Cook.

The stock last traded at $5.74 and has fallen 9.9 percent so far this year.

(BusinessDesk)

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