Home lending may be slowing, but Stockland says it’s on track to sell a record number of homes in the June 30, 2010 financial year, and it remains confident of meeting earnings guidance.
The company told the market yesterday that it had taken 5000 net deposits to the end of April.
Stockland managing director, Mr Matthew Quinn, told an investor update in Melbourne yesterday that the company’s residential communities sales momentum had remained strong, with net deposits of almost 1,900 between January and April 2010.
Stockland said it had begun fiscal 2010 with 1215 contracts in hand and expected to end the year with more.
"We’re on track to deliver record residential sales this financial year," Mr Quinn said in the statement to the ASX.
"Our Residential Communities margins are expected to increase by between one per cent to 1.5 per cent in the second half due to recent price increases, particularly in Victoria and Western Australia.
"We’ve seen our buyer composition shift, with upgraders making up around 44 per cent of FY10 net deposits to April, compared with 36 per cent in FY09."
Mr Quinn said first home buyers had "returned to historic levels in most states", but were stronger in Victoria, where the first home buyers grant had been lifted to $20,000 and extended to June 2011 for new homes.
"With rental vacancies remaining low, were also seeing continued investor interest," Mr Quinn said, although affordability continued to deteriorate following six interest rate rises since October 2009.
"We remain focused on delivering innovative product at affordable price points, which assists us in maintaining and growing our market share through increased lot sales.
"We’ve also extended our market share into new growth corridors in Victoria and Western Australia, with the acquisition of five new residential land parcels to date in FY10.
"These new sites, totalling 4,750 lots at a cost of around $250 million, will replenish our land bank in line with our growth strategy."
Stockland said that despite the six rate rises from the Reserve Bank "finance for new housing construction and consumer sentiment remain positive," Mr Quinn said.
Stockland said that it confirmed its fiscal 2010 earnings guidance of 29 cents a share, following a loss of 104 cents per share in fiscal 2009 because of big asset write-downs.
And the company said that "Any profit on previously impaired stock (housing land written-down in previous years) will not be included in underlying profit –to be reported below the line".
Stockland securities fell 13c, or 3.4%, to $3.67.
