Property developer Stockland Group has reported a record number of deposits for its residential projects as low interest rates contribute to strong demand for property.
Net deposits on residential lots, townhouses and completed homes jumped 47.7 per cent to 2,301 in the three months to September 30, fom 1,557 in the same period a year ago.
Chief executive Mark Steinert said projects in Sydney, Melbourne and south east Queensland made “significant contributions” to the growth in deposits, while Perth has shown signs of stabilisation.
“We remain on track to achieve more than 6,000 residential settlements for the full year and see constructive signs for an elongated property cycle,” Mr Steinert told the group’s annual general meeting.
Stockland’s update comes a day after rival Mirvac flagged a strong year, despite ongoing settlement delays from foreign buyers and a rise in the rate of defaults.
Mirvac said default rates in the three months to September were slightly above the group’s historic average of one per cent. But the group has resold all defaulted lots and remains on track to achieve a significant jump in earnings in residential business.
Stockland’s retail business – the single biggest contributor to the group’s earnings – saw a “slight moderation” in the rate of sales growth. Quarterly sales rose 2.4 per cent, with comparable specialty sales up 1.1 per cent.
However, sales data from about one-third of the company’s shopping centre portfolio has been excluded, due to the redevelopment of some of its centres.
Stockland said it remains on track to deliver five to seven per cent growth in funds from operations this financial year on the back of higher retail sales and residential deposits.
The company’s remuneration report was overwhelmingly approved by shareholders, with 98.5 per cent voting in favour, based on proxy votes, according to outgoing chairman Graham Bradley.
Mr Bradley’s 11 years as chair and 13 years as a Stockland director came to an end on Wednesday, stepping down from the roles. He will be succeeded by former Woolworths chief financial officer Tom Pockett.