Booming double-digit house price growth could screech to a halt, according to Stockland, one of the country’s biggest residential developers, which is now forecasting rates of growth closer to 1 per cent.
Stockland chief executive Mark Steinert said while population growth and undersupply would underpin demand, he expected that the pace of growth in prices would slow, allowing the development of more affordable houses and apartments.
‘‘We don’t expect the rate of price increases we’ve seen in the last 12 months [of between 10 and 11 per cent] to continue at that rate,’’ Mr Steinert said at the release of the group’s full-year result on Monday.
‘‘Metropolitan Sydney has been the strongest market due to undersupply and strong demand, with repeated sellouts at Willowdale, Calleya and Elara mixed-use developments,’’ he said.
Mr Steinert made the comments after he reported a 12.2 per cent rise in net profit to $555 million for the year to June 30. He added that developments of housing near or in shopping centres, depending on planning and land availability, were also on the agenda.
Operating profit before tax and interest of $602 million was in line with market forecasts of $601 million.
Mr Steinert has forecast a 6 to 7.5 per cent rise in earnings in the current year, with the retail and business parks sectors providing solid growth support to the residential and retirement-living and office divisions.
Stockland's head of residential, Andrew Whitson, said the business continued to grow strongly with operating profit up 57.2 per cent on the previous year. He said 5219 lots were settled for the year while the current 2015 year had started with a record 3185 contracts on hand.
Brokers said the contracts on hand were well up on the 2872 lots recorded as of December 2013, and much higher than 1946 reported in June last year. Although dictated by project releases, annualising the second half of 2014's net deposit run rate would imply net deposits of 6558 per annum.
Mr Whitson said all markets were experiencing generally positive housing market conditions, with Victoria and NSW the strongest and the mining states of Queensland and Western Australia showing moderate demand.
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