- According to recent data, values of houses are down
- This shows that buyers have more power now
- There are more choices for house-hunters now
There is almost a reversal in the housing market. House buyers now not only have more choices in a slowing market, but they can buy houses at lower prices. Declining prices and a big increase in the number of homes up for sale mean the market has turned in buyers’ favour. Wellington and Auckland have already been declared as a buyer’s market.
Buyers can now look at prices as well as several other factors like livability with factors like amenities, a good sunshine low crime rate and public transport. Conventional wisdom has it that a buyer’s market is the ideal time to purchase a new home, and price falls in suburbs nationwide give them a greater variety of areas to choose from.
Against this background, let’s examine these property stocks listed on the NZX.
Property for Industry Limited (NZX:PFI)
PFI is also a large property company with a market cap of NZ$1.5 billion. Recently, it divested some of its property at Napier. In May, it announced its Q1 dividend payout of 1.8000 cps. The dividend will have imputation credits of 0.5450 cps and a supplementary dividend of 0.2473 cps for non-resident shareholders. Recently, PFI also announced its ESG update in which, it spelt out the sustainability measures that it had taken in its properties. Amongst other measures, the company has begun working towards green-star certification for the future.
On 13 June, the stock was trading down 0.82% at NZ$2.415, at the time of writing.
Goodman Property Trust (NZX:GMT)
GMT is an externally managed unit trust with a market cap of around NZ$2.9 billion. It has been ranked as a top 20 investment vehicle. It has a strong property portfolio with a value of NZ$4.8 billion as of 31 March 2022. The Group’s financial highlights for the year FY22 ended 31 March include a statutory profit of NZ$763.8 million before tax, up 17.7% over pcp. Its operating earnings of NZ$118.3 million before tax signified an increase of 3% from FY21. Cash earnings of 6.66 cpu and cash distributions of 5.50 cps reflected an 82% payout.
On 13 June, the stock was trading down 0.49% NZ$2.050, at the time of writing.
Precinct Property New Zealand Limited(NZX:PCT)
PCT develops premium properties across New Zealand. Its business has continued to grow in the last 6 months, and it is focused on the next stage. In an update to the shareholders, it revealed that it had continued to be committed to owning a high-quality portfolio. It showed resilience during the pandemic and reported a net operating income increase of 6.3% over pcp at around NZ$1 billion. It has a number of projects underway and they amount to NZ$1 billion. It paid a dividend of 1.67 cps to its shareholders on 10 June. Before that, a dividend of similar value was paid in March.
On 13 June, the stock was trading down almost 3% at NZ$1.34, at the time of writing.
Kiwi Property Group (NZX:KPG)
KPG specialises in the mixed-use property. Of late, it has embarked on a plan to develop its Drury Private Plan, paving the way for the creation of a major Green Star Community. This move will allow the development of the Group’s 53-hectare site, which will be the new location of Drury Town Centre as outline in the Company’s plan. It has declared a final dividend of 2.85 cps with imputation credits of 0.677 cps.
Related Read: Kiwis gear up for more mortgage rates as RBNZ raises OCR
On 13 June, the stock was trading down by 1% at NZ$1.00, at the time of writing.
Argosy Property Limited (NZX:ARG)
ARG is a leading property investment vehicle of New Zealand. On 18 May, the Company declared its FY22 results with an NPAT of NZ$236.2 million; NZ $163.7 million annual revaluation gain and an increase of 8% on book value. It also reported an NTA increase of 13% per share. ARG declared an interim dividend of 1.63 cps with the ex-dividend date on 7 June 2022 and payment date on 22 June. The company has been rewarding its shareholders with consistent dividends.
On 13 June, the stock was trading down by 2.04% at NZ$ 1.200, at the time of writing.
Bottom Line: A reduction in prices of houses and more houses up for sale are good news for house-hunters. They now have many options to explore like the livability factor, weather conditions, public transport, etc. However, the actual purchase of properties will depend on mortgage rates and the new lending environment.