Giant developers are smiling again

MIRVAC has joined the ranks of residential property developers reporting better results on the back of an improving housing market.

The listed property giant says it is confident the Melbourne and Sydney property markets have bottomed out, as sales rise in both its apartment buildings and land estates.

The update from Mirvac follows rival developer Stockland’s residential unit turning in its best quarter of the year earlier this week.

“We have passed the bottom of the residential cycle,” Mirvac chief executive Susan Lloyd-Hurwitz said yesterday.

“There are now clear signs of improvement in the Sydney and Melbourne established housing markets with lifts in loan approvals consistent with the upturn in auction market activity, prices and turnover.”

The national unit market has been blighted by scandals over cladding and poor engineering practices, leading to evacuations of buildings, but Ms Lloyd-Hurwitz said Mirvac was focusing on building highquality product at a time when the apartment market continued to face scrutiny and building standards were being called into question.

“We are committed to going above and beyond regulatory requirements and paying attention to every detail,” she said.

“We are actively engaging with government and other stakeholders to drive change across our industry.”

Mirvac’s office and industrial arm is also performing on the back of favourable market conditions and hot demand for space in the Sydney and Melbourne CBDs and city fringe areas.

The company has $3.1 billion in projects under way and is chasing major projects, including over-station developments in Sydney.

The group said its CBD-focused retail assets were posting solid results despite structural and cyclical headwinds.

“The Sydney and Melbourne markets continue to show positive fundamentals, including population growth, low unemployment and record levels of infrastructure spend,” Ms Lloyd-Hurwitz said.

“Eighty per cent of the group’s capital is now allocated to the urbanisation of these gateway cities.”

In a bullish trading update this week, Stockland warned housing shortages could emerge in every market in Australia as the property cycle accelerated and smaller developers struggled to access finance.

Stockland chief executive Mark Steinert said he expected house prices in Melbourne and Sydney to rise by between 5 per cent and 7 per cent over the next year.

– THE AUSTRALIAN, with AAP