Property developer Stockland has lifted its full year underlying profit more than nine per cent thanks to the booming housing market.

Stockland made an underlying profit of $608 million for the year to June 30, up from $555 million a year ago, while net profit was up 71 per cent to $903 million due largely to a revaluation of its commercial property assets.

The company’s residential property division recorded a more than 73 per cent increase in profit, helping the company to lift its underlying earnings per security 7.8 per cent to 25.9 cents, above the 7.5 per cent earnings growth it flagged in May.

For the year ahead, Stockland expects to lift earnings per security by between six and 7.5 per cent.

Moving forward, the property giant Stockland is betting on Brisbane being the place to be for the next few years as Sydney and Melbourne’s booming markets finally come off the boil.

Chief executive Mark Steinert says that after years of lagging behind its southern counterparts, the Brisbane market is primed for stronger growth.

“Brisbane has got high affordability and is showing the largest spread between house prices relative to Sydney that’s been recorded in history,” he said.

“Now that we’ve starting to see jobs growth emerging in Brisbane that’s a market that we think will probably show the strongest growth in the next few years.”

Residential property prices have increased by around four per cent in the past year, a far cry form the 17.7 per cent rise in Sydney and 12.3 per cent rise in Melbourne, according to CoreLogic RP Data.

A boom in Brisbane would be great news for Stockland, which has thousands of new lots due to come onto the market in the next few years.

That includes the 20,000 home Caloundra South project on the Sunshine Coast, the company’s biggest ever residential development.

The company isn’t backing away from Sydney or Melbourne either – with a pipeline of major developments underway in both centres – though Mr Steinart doesn’t expect the runaway growth of recent years to continue.

“Some of the sub-markets where you’ve seen this very strong growth, we think that’s going to slow down somewhat but we certainly don’t foresee any collapse in the market,” he said.

He said a lack of new construction in the years following the global financial crisis coupled with population growth and a reasonable, if not upbeat, outlook for the economy meant demand for new housing developments would remain strong.

“We see an undersupply in all of the metropolitan markets in Australia, we’ve been under-building for some time and particularly post-GFC,” he said.

“So what you will continue to see is relatively high levels of construction and relatively high levels of sales activity as a result of that.”

 HOUSING MARKET LIFTS STOCKLAND

• Underlying profit up 9pct to $608m
• Funds from operations up 13pct to 28 cents per security
• Unfranked final distribution steady at 12 cents per security