Mirvac’s off-the-plan sales jump 20% in second half of 2011

Mirvac has sold 55% of its first Harold Park residential precinct in Glebe in the first two months of marketing the project off the plan, according to its interim results for the six months to December 2011.

The developer sold 155 of the 296 apartments released for sale in the first two months of the marketing campaign with prices ranging from $495,000 to $1.7 million.

The developer began marketing the scheme, which will be built on the site of the Harold Park paceway, in November 2011.

Off-the-plan buyers have included media personality Deborah Hutton, who bought two apartments in December.

In its Yarra’s Edge precinct in Melbourne’s Docklands Mirvac has also sold 47 out of the 82 luxury river homes, with prices ranging from $885,000 to $7 million and has exchanged contracts on 161 apartments in the 31-storey Yarra’s Point tower with prices ranging from $500,000 to $2.4 million. No settlements have been recorded for the project. Also at Yarra’s Edge, boat owners have snapped up 96 out of the 149 marina berths with prices ranging from $120,000 to $225,000.

In total, Mirvac exchanged pre-sale contracts of just over $1 billion in its residential projects over this period, a 20% increase over the first half of the year, and achieved 849 residential lot settlements over the six-month period.

More than half of off-the-plan buyers have come from NSW ($596 million) followed by Victorian buyers ($325 million), Queensland ($76 million) and WA ($11 million).

Managing director Nicholas Collishaw says Mirvac has commenced on the path of restring gross margin of between 18% and 20% on its residential projects and is also on target to achieve 1,800 sales in the 2012 financial year.

Collishaw says there has been strong interest in the Harold Park project, which is still two years away from completion.

He says Mirvac will continue to expand into areas of high demand for medium-density living.

The developer has registered an increase in first-home buyers (comprising a quarter of buyers) and investors (27%) with upgraders and empty-nesters comprising the majority of buyers (48.3%)

The developer says the fundamentals underpinning the housing sector are starting to improve. “Pop growth is starting to pick up, while the combination of declining property prices, rising incomes and lower borrowing costs have resulted in an improvement in housing affordability, says Mirvac.

“The changing preference of new migrants and the ageing of the population suggest the growing preference towards medium density will continue.”

The outlook is strongest for the NSW residential market, where Mirvac has the heaviest weighting (34%). Mirvac anticipates flat markets for WA and Queensland in 2012 and expects the Victorian market to decline in 2012 as it underperforms compared with other states.

Mirvac highlighted an increasing demand for apartments and semi-detached and terraced housing from migrants in its presentation.

Upon completion the 10.6-hectare Harold Park site will comprise 1,250 dwellings of one-, two- and three-bedroom apartments and terraces, with construction due to commence in May this year.

The project has received approval from the NSW state government, with the City of Sydney’s Central Sydney Planning Committee to shortly decide on the first of the development applications for the development.

Mirvac also achieved 46% pre-sales of the 231 lots released in it Pinnacle Waterside development in Rhodes in NSW.

For the six-month period, Mirvac reported a 1% rise in operating profit for the six month to December 31 of $201.5 million, compared with $201 million in the corresponding period in 2010.