Stockland sale surge

Developer rides road to recovery

THE country’s largest residential developer, Stockland, says inquiries are running 40 per cent ahead of normal as the company rides the tide of low interest rates and government stimulus.

In a bullish first quarter update, Stockland said that it was headed to the top end of its earnings guidance and was on track to settle 6300 home lots this year.

Stockland chief executive Mark Steinert said the company had come through the worst of the coronavirus crisis and was firing.

“Importantly as the economic and business environment has improved towards PRE-COVID levels industry support measures, such as the Commercial Code of Conduct and Homebuilder, concluded at the end of the quarter without emerging evidence of material adverse outcomes,” Mr Steinert said.

His comments came as National Australia Bank chief executive Ross Mcewan said bargain-basement mortgage rates had made it cheaper to buy a home rather than rent.

He said 16 per cent of lending was coming from firsthome buyers.

“There are more first-home buyers getting into this market than we’ve seen probably in the last five-10 years,” Mr Mcewan said on 2GB Radio. “First-home buyers are finding it cheaper to buy than it is to rent.”

He said prices outside of major metro areas had grown faster, as more people continued to flock there from innercity areas.

Mr Mcewan said he believes interest rates would remain low for several years while the economy continued to recover from the virus-induced recession.

Stockland said in the

March quarter, higher residential business inquiries had translated into a strong net sales result of 1891 lots, up 69 per cent on the same time last year.

Stockland is forecasting residential settlements for the full year of about 6300 lots and cited supportive conditions, including low interest rates, government incentives and credit availability, which have created a demand lift that developers have scrambled to meet.

Stockland said the bullish conditions were forecast to continue for “some time, even with the conclusion of HomeBuilder, given the equilibrium of supply and demand in most housing sub-markets we operate in”.

The company had residential settlements of 1510 lots in the quarter and made 1891 net sales, giving it 4739 contracts on hand, helping to lock in future earnings.

Sales inquiry levels jumped to 33,000 in the quarter, about 40 per cent above the long term average, with Stockland picking up market share as customers jump into the market due to high credit availability and household savings.

Stockland shares fell 2.4 per cent to $4.51 on Tuesday.