Stockland sell record housing lots to owner occupiers

Stockland sell record housing lots to owner occupiers
Stockland sell record housing lots to owner occupiers

Stockland said record settlements of new lots in the Sydney and Melbourne residential markets had boosted its half-year profit by 18.2 per cent.

The country's largest listed residential developer advised its focus on undersupplied markets triggered the record 3210 settlements in the six months to December.

It advised its cancellation rate sat at below the long term average.

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Stockland sell record housing lots to owner occupiers

"Over the last four years we have built a strong residential business with significantly enhanced returns," chief executive Mark Steinert said adding they had placed a greater focus on the deep Melbourne and Sydney markets with particular emphasis on transport and infrastructure corridors.

"Around half our residential customers are first home buyers and over 75 per cent are owner-occupiers, which places us in a preferred position in the current residential lending and policy environment.

"As a result, our Residential business delivered another half of exceptionally strong returns and settlements, with operating profit growing over 80 per cent to $182 million in 1H18.

“We settled a record 3,210 lots, up 12.5 per cent on the corresponding period, and achieved a net operating profit margin of 20.9 per cent. FY18 profit will be skewed to the first half of the financial year due to a large proportion of higher-margin Sydney settlements.”

Stockland expects operating profit margins of around 17 per cent in FY18 and for the next 2 - 3 years, subject to market conditions.

It noted WA had an ongoing weakness.

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 Stockland sell record housing lots to owner occupiers

Its upcoming launches include Waterlea in Melbourne.

“We have intentionally increased our weighting to Sydney and Melbourne housing, where the markets continue to be driven by structural undersupply.

It advised around half its residential customers were first home buyers and over 75 per cent are owner-occupiers, "which places us in a preferred position in the current residential lending and policy environment."

“More than 95 per cent of our residential business earnings over FY18 - FY20 will be generated by our masterplanned communities,” Mr Steinert said. 

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Stockland sell record housing lots to owner occupiers

 

Stockland's 2018 market outlook suggests demand will continue to outstrip supply in New South Wales.

They note market prices in Western Australia are likely to remain stable.

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residential Stockland

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