Stable outlook for residential market with improving housing affordability to underpin demand: Mirvac AGM

Mirvac chairman James MacKenzie says the outlook for the residential property market is “stable” for the near term with a stronger outlook for NSW but concerns for the outer suburbs of Melbourne and south-east Queensland.

Speaking at Mirvac’s AGM in Sydney on the occasion of its 40^th anniversary and at the first meeting attended by new CEO and managing director Susan Lloyd-Hurwitz, MacKenzie said it was fair to say that the residential property market “has performed better than many international markets in recent years, and we expect it to remain stable overall in the near term”.

“Specifically we see pockets of strength in NSW combined with continued weakness in south-east Queensland and the outer suburbs of Melbourne,” MacKenzie said.

He said “improved housing affordability” was a factor that was expected to underpin housing demand in the future.

“This is a factor that Mirvac watches closely – and it is significant that from the final quarter of 2010 to the September quarter of 2012 house price affordability improved by around 25%," said MacKenzie.

He also announced that Mirvac has pre-sold 80% of the first stage of its Harold Park flagship residential development in Glebe in inner Sydney.

MacKenzie said strong sales at major development projects such as Harold Park were a testament to its “highly targeted approach” and gave it the confidence to launch the second stage of its residential development last weekend.

The majority of second-stage dwellings in Eden sold over the weekend, with terraces home selling out just hours after launching.

MacKenzie said the other key new release apartment projects include Rhodes Pinnacle in Sydney and Yarra Point in Melbourne's Docklands, with a “strong contribution” also expected from master-planned communities at Elizabeth Hills and Middleton Grange in NSW.

He said Mirvac’s residential development division “achieved considerable success during the financial year, with just over $900 million in pre-sales on hand at year’s end and the settlement of 1,807 residential lots during 2012 ahead of target".

“The business is focusing on its competitive advantage in delivering quality residential projects with new releases that target price points and locations that have been identified using detailed demographic research,” he said.