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Developer predicting residential property market boom
An easing of credit, historically low interest rates and a lack of new builds in the pipeline could see strong growth in all major cities as supply fails to keep up with demand, the nation’s largest residential developer has outlined.
Developer predicting residential property market boom
An easing of credit, historically low interest rates and a lack of new builds in the pipeline could see strong growth in all major cities as supply fails to keep up with demand, the nation’s largest residential developer has outlined.
At Stockland’s annual general meeting, the property developer provided its own insight as to why the property market could be set for another boom.
Managing director and CEO Mark Steinert noted how “the residential market cycle has improved, particularly in Sydney and Melbourne, and the southeast Queensland market is steadily improving”.
Over the next year, the developer predicts property values in Sydney and Melbourne to increase by 5 to 7 per cent, while Brisbane and Perth will also see increases of 5 per cent or more.
The recent changes to consumer sentiment were flagged as driving the property price growth.
“Around 80 per cent of our residential customers are owner-occupiers, and the current low interest rate environment, improving credit conditions and government incentives are driving buyer confidence,” Mr Steinert said.
Stockland used the meeting to warn that such an increase in consumer sentiment could lead to an undersupply in housing over the next two years as existing projects finish if there’s a lack of new builds beginning to replace them.
But, for the company itself, “the outlook is favourable for our communities business, given an expectation that reduced housing starts will see an undersupply emerge over the next 12 to 24 months,” Mr Steinert added.
The rebound in the housing market has led Stockland to have a strong start to the financial year, with its residential estates showcasing its strongest quarter of the calendar year.
Stockland’s share price has increased from a low of $3.73 before the election to $4.78 at the close of business Tuesday.
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