AV Jennings hits out at stamp duty
Home builder AV Jennings has hit out at stamp duty, which it said was holding up construction and adding to housing costs.
Chief executive Peter Summers made the comments in announcing the company’s $48.2 million before-tax profit for the 2015 financial year, which was up 78.3% on 2014.
The profit increase was driven by improving residential markets, which lifted revenue by 26.9% to $317.9 million. But Summers said recent activity in new housing markets followed a sustained downturn in sales and a lack of supply in many markets.
He blamed stamp duty for contributing to housing costs and called for debate on the tax.
“The company has for many years talked about the impact of government charges and taxes and the cost of red tape causing delays that are impacting affordability,” Summers said.
While price growth has been strong in some markets such as Sydney and Melbourne, AV Jennings noted in its annual report that price growth had been “more muted” in the markets in which it operates.
“It has been disappointing to see that much of the commentary on the housing market has focussed on extreme examples or specific micro-markets, such as parts of inner Sydney, which are then extrapolated into the rest of the Australian market,” Summers said.
Residential markets in South Australia and Western Australia were subdued. Demand and supply were balanced in the mid-to-outer areas of Melbourne where the company has developments, and prices were firming in Brisbane, Noosa, Caloundra and Coomera in Queensland the company noted.
AV Jennings sells most of the homes it develops to domestic buyers and owner occupiers. It settled 1538 lots in the 2015 financial year, up 22.6% on the previous year. It said it expected to end the 2016 financial year with contracts signed for 1800 to 2100 lots.
It paid dividends of 4 cents per share, fully franked, for the full year and said in future it would pay out 40-50% of after-tax net profit.
The picture above is taken from the AV Jennings The Mill Apartments development at Eastwood, Lot 404/8 Avondale Way.