Property-Related Firms Rake in Revenue From Real Estate Boom Australia

Property exposed companies have reported "tremendously successful" and "best ever" results thanks to the booming housing market.

Developer Mirvac saw its full year profit spike 220 per cent to $447 million dollars.

Shareholders will receive a final dividend of 4.6 cents a share, taking the full year payout to 9 cents unfranked.

Strong residential sales lifted the result, with a total $1.2 billion of exchanged pre-sales contracts in hand and a slightly better than forecast 2,482 properties settled.

Chief executive Susan Lloyd-Hurwitz says the year has been "tremendously successful" and has set the company up for the future.

That future is very focused on building apartments to feed what it believes will continue to be high demand, particularly in Sydney and Melbourne.

Chief investment officer Brett Draffin says the strong sales and price momentum seen over the past financial year is set to continue, albeit at a "slightly more moderate level."




He is not concerned about the flood of units that is expected to come onto the market in the near term.

"Fundamentally increased stock levels are insufficient to overcome the national undersupply, there is a high level of activity from offshore buyers in select locations and product types," he told investors.

"We expect demand volumes to continue to grow driven by tight rental vacancy population growth and a strengthening of the economy."

Mirvac has spent $248 million on new sites, two-thirds of these acquisitions were in NSW, less than a fifth were in Victoria, and the remainder in Queensland and Western Australia.

Half of the lots to be released this year are in Sydney, and almost all of them are units.

Mirvac believes the major acquisitions it has made will see residential development drive earnings from two years time onwards.
Mortgage broker boosts earnings

Mortgage broker Mortgage Choice has also benefitted from the fever that has swept the residential property market over the past year-and-a-half, boasting a best ever full-year result.

Full-year net profit rose 6 per cent to $19.85 million, and cash profit jumped 19 per cent to $18.7 million.

The final dividend was boosted to 8 cents a share, fully-franked.

The company says it "managed to capitalise on the industry tailwinds and significantly grow its core business."

The business wrote $12.2 billion in loan approvals, which is almost 20 per cent higher on the prior year, and the loan book rose to $47.4 billion.

Chief executive Michael Russell says it is the best result so far for the company.

"We have embraced the opportunities that the strong market has presented us with and managed to deliver some of our best financial results to date," he said.

The company says it is well on its way to achieving its goal of becoming a recognised diversified financial services provider.

"We will continue to focus on our growth and diversification moving forward."

Rate rises keep a lid on house prices

SYDNEY homeowners wanting to get rich were dealt a blow last year with six successive rate rises flattening out property values.
Exclusive figures obtained by The Sunday Telegraph reveal Sydney home values failed to rise as high last year as in previous years. The rate hikes since November, 2009 were blamed for the result with median house prices increasing by just 6.51 per cent last year - almost half as much as the previous year, Residex figures show.

The worst-performing houses were in the western suburbs mortgage belt, where the rate hikes had a major impact.

Units fared marginally better with the median price rising 9.42 per cent in 2010 compared to 10.40 per cent a 0.9 per cent decline in the rate of growth.

Sydney's wealthier areas were also not spared with suburbs experiencing negligible growth, or price falls, as the interest rate hikes hit and savvy buyers looked for better opportunities elsewhere, Residex managing director John Edwards said.

"Suburbs such as Rushcutters Bay, Elizabeth Bay and Balmain are traditionally dominated by owner-occupiers and the high prices have clearly placed constraints on how much people can or will pay," he said.

"Today's buyers are thinking very hard about where to buy, the area's prospects and potential for future growth. For the price you pay for units in some of these areas you can buy houses in other suburbs, and that makes them less attractive."

Unit prices were supported by a strong investor market with cashed-up landlords paying premium prices for city apartments The best-performing suburbs were dominated by areas which offered proximity to the city, good transport and lifestyle. Topping the list were Naremburn, Ashbury, Campsie and Kensington, which rose 20-22 per cent.

Finance worker Greg Dick, his wife Pong Pon and their seven-month-old twins Natalie and Thomas are typical of the buyers choosing to live in Kensington and pushing up prices as a result.

They family paid a record price of $1.948 million in October for a four-bedroom plus study home in the Raleigh Park Development through Wayne Marks of LJ Hooker Kingsford.

"I basically chose Kensington because we ideally wanted to live in the eastern suburbs and the suburbs directly east and northeast are expensive for what you get," Mr Dick said.

"The area's built out now but there's a lot of renovation going on and we believe still a lot of opportunity for capital growth."

Landlords enjoyed significant rent increases in many suburbs as low affordability keeps many in the rental market. Median rents across the city's units rose by 7.1 per cent or $30 to $450, and by 7.4 per cent or about $30 to $510 a week. The median value for a Sydney unit is $477,500.

Home sales slump for 3rd month in a row PROPERTY SYDNEY

The number of new homes sold fell for the third straight month in July, a report shows, prompting calls for a new federal government to implement a three point plan to tackle the problem.

The latest HIA/Jeld-Wen New Home Sales survey of Australia's major residential builders showed that the number of new homes sold fell by seven per cent in July 2010, the third consecutive fall.

Sales were down by eight per cent over the three months to July to be two per cent lower than a year earlier.

HIA Chief Economist, Dr Harley Dale, said that the severe decline in new home sales highlighted the need for a new government to implement a housing action plan.

"There needs to be a re-doubling of efforts to reduce the impact of regulation, development charging, and excessive taxation on the cost of new housing supply," Dr Dale said in a statement on Monday.

"This action needs to include considerable federal level engagement, without which Australia's dwelling shortage will continue to increase, placing avoidable upward pressure on existing home prices and disadvantaging households seeking to purchase or rent a dwelling."

HIA wants the new government to state their commitment to pursuing three key policy priorities: a new housing cost reduction program, a housing and development ministry recognition and support for small business.

Detached house sales fell by 7.3 per cent in July 2010, while sales in the multi-unit sector fell by 4.1 per cent.

"Large volume builders assess that the confidence of people enquiring about building a new home weakened over the four month period to July. Clearly higher interest rates and the unwinding of fiscal stimulus have had a negative impact on new home building this year," Dr Dale said.

On a state by state basis detached new home sales fell by 12.9 per cent in Victoria, 7.6 per cent in Queensland, 3.1 per cent in New South Wales, and two per cent in Western Australia.

Sales increased by four per cent in South Australia.

Prime minister Julia Gillard and her Labor government are in caretaker mode since last Saturday's federal election resulted in a hung parliament.

Ms Gillard and opposition leader Tony Abbott are in talks with five lower house independents and one Green about forming a government.

See Original AAP Article