We see a channel where the price have been in, majority of the time. The circles indicates extremes, circle on top is a result of low interest rates and Covid money supply and the lower one is the correction of the first.
This volatility have tested many industries, especially real estate. Have we reached a point where the channel is attracting like a magnet given development of market conditions?
I reckon there needs to be break from the current downtrend channel. But if they survive the summer ("higher for longer") and there are ratecuts in the fall, the case looks attractive, but there is no rush.
Cryptovicci
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@wahlwest, if you tuned in to Powells speech, you understand Real Estates will move upwards. 3 rate cuts will probably turn into 5-6 or 7 in 2024 as GDP estimated to grow 1,4% vs 2,6% in 2023.
Interesting. Your analysis indicates a 500%+ move. That kind of a move need a fundamental change in finances or the story. Neither is likely in SBB based on the fact that they keep selling of assets below market value to pay loans. Why do you think the story is about to change?
Cryptovicci
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@MrLowStep, US core inflation last 6 months ending in October at 2,5%. If FED is now worrying of a hard landing, do you think they will cut or raise interest rate in Q1? Additionally, if this is not fundamental change, what do you call it?
I consider SBB situation as a trade heading towards margin call territory, then you need to lower your risk by selling assets to cover cash flows. Furthermore, once we se first rate cut, you will see the channel attracting like a magnet. If it goes all way up, neither I or anyone can tell. But one thing is for sure, their assets will increase in value, at same time as net operating income at +12,5% yoy.
This analysis is here to stay, let’s look back again in few months. Thanks for commenting.