The housing boom may have peaked, but Mirvac expects its healthy property development pipeline to keep earnings growth strong.
The developer's net profit in the six months to December jumped 69 per cent from a year earlier to $473 million, driven by revaluation gains and property booms in Sydney and Melbourne that are now starting to cool.
"The residential market is now set for a lower volume and price growth phase," chief executive Susan Lloyd-Hurwitz said.
But Mirvac's key markets - particularly Sydney - continue to be supported by positive fundamentals and low interest rates, she said.
The company is well placed to achieve its full year targets of more than 2,900 residential lot settlements.
Projects to be released over the next three years are already substantially pre-sold, Ms Lloyd-Hurwitz said.
"Our current pipeline provides us with the potential to deliver more than 16,000 lots over the next five years," she said.
"We are confident in the outlook for our residential business."
The earnings contribution from Mirvac's residential business has doubled since 2012/13, and the company only operates in the nation's four largest cities.
"These cities are expected to grow in population by 45 per cent to 2031 and already account for more than 60 per cent of all economic activity in Australia," Ms Lloyd-Hurwitz said.
Sydney continues to benefit from pent-up demand and a strong economy, and should deliver growth for many years to come, she said.
Metropolitan Melbourne will remain Australia's fastest growing city, and Mirvac expects ongoing demand in the middle and outer areas.
Demand remains surprisingly steady in Brisbane, but apartment oversupply risks will be closely monitored and avoided.
Perth is the most challenged market Mirvac operates in, which should persist until 2017/18, Ms Lloyd-Hurwitz said.
"We are selling well in Perth but remain highly selective on market acquisitions and structures," she said.
Mirvac reaffirmed its full year guidance for operating earnings per security distributions.
MIRVAC CONFIDENT OF LONG HOUSING BOOM
- Net profit up 69 pct to $472.7m
- Revenue up 3 pct to $1.17b
- Interim dividend up 0.2 cents to 4.7 cents