The market took a look at what was on the whole a positive update from property developer and investor, Stockland yesterday and went ‘hmmmmm, don’t know’ and marked the securities down by more than 2% by the close.
The securities fell 8c, or 2.1%, to $3.66.
That’s despite the group saying it was confirming its guidance of earnings per share (EPS) growth of 8.5% in 2010/11.
But the market shyness could have been due to the comment that the group says home buyers remain cautious, especially in Queensland where there is a lot of looking, but little purchasing.
Stockland said on Tuesday it was on track to achieve earlier EPS guidance of 31.6 cents per security in 2010/11.
"After a very strong 1H11, net deposits slowed in 3Q11, due largely to a significant fall in south east Queensland," Stockland told an investor update in Sydney yesterday.
"A total of 1,112 net deposits were achieved in the quarter and April has shown a slightly improved run rate.
"Total FY11 lot settlements are now expected to be slightly higher than the FY10 figure of 5,236.
"FY11 key operating metrics for the Residential Communities business are all expected to show positive movements versus FY10, with the average lot size expected to be down around six per cent, average price per sqm up around 12 per cent, average price per lot around five per cent higher, and Operating Profit and EBIT margins both up around 1-2 per cent."
Stockland’s retail business was on track to continue strong growth, and its Aevum retirement living business "is on track to achieve all targets".
Stockland managing director Matthew Quinn said Stockland was seeing increased numbers of enquiries, but buyers were cautious – particularly in Queensland – and were taking longer to make a purchase decision.
"Our lead volumes, one of the most accurate lead indicators for sales, were up in 3Q11, with growth coming from a varied customer mix of first home buyers, upgraders and investors in line with long-term targets," Mr Quinn said.
"Overall, we are seeing good customer traffic and strong enquiry levels from potential buyers, but they are feeling their way carefully because of the short-term uncertainty over cost of living pressures, and rising utility and petrol prices."
He said market conditions varied across states.
Buyer sentiment was strong for affordable homes in NSW and the market was trending upwards.
Victoria was returning to its long term average level of housing approvals as the State’s first home buyers boost came to an end.
Western Australia had been affected by an overhang in the established market, but was starting to show more positive signs.
"While the direct impact of Queensland’s January natural disasters on Stockland was minimal, the broader impact on consumer sentiment has been significant with potential customers actively looking, but not buying.
"While it is too early to predict the timing of a recovery in buyer activity, the long-term fundamentals for the State remain strong."
