AAP Finance

Stockland sees recovery in Syd, Melb

By AAP Newswire

Stockland shares have jumped 6.7 per cent after the residential community developer said Australia's property markets were rebounding, especially in Sydney and Melbourne.

"We've had a solid start to the year," Stockland chief executive Mark Steinert told Monday's annual general meeting.

"Our residential communities business recorded its strongest quarterly result this calendar year, finishing moderately above expectations with 1,149 net deposits taken and 4,245 contracts on hand."

The 1,149 net deposits for the three months to September was still down from the 1,293 from the corresponding first quarter last year.

"[But] we are confident that the residential market has bottomed and the pace of recovery is improving, particularly in Sydney and Melbourne," Mr Steinert said.

The southeast Queensland market was also steadily improving, he said.

The overall default rate for Sydney was still above normal, but moderating, he said.

Low interest rates, improving credit and government incentives were driving buyer confidence, as was Stockland's strong brand, Mr Steinert said.

The company's Parks at Red Hill in Canberra sold 60 per cent of its 108 single-dwelling sites during a single night at a pre-launch event in September, he said.

The company has $2.5 billion in commercial property in the pipeline, including projects at Melbourne Business Park in Truganina in Melbourne; in North Sydney; Macquarie Park; and the Sydney CBD.

Looking forward to next year's FY20 results, Mr Steinert warned that market conditions remained "variable" but "our confidence in the pace of recovery in the residential market has improved."

The company is forecasting its distribution payout to be at the bottom end of its 75 to 85 per cent ratio.

At 1443 AEDT, Stockland shares were up 6.7 per cent to a three-year high of $4.93 - their biggest single-day move since least 2012.