‘Positive sentiment’: Mirvac flags strong apartment demand in AGM

One of Australia’s largest property developers is flagging green shoots in the market which has struggled throughout 2024.

Mirvac has declared there are green shoots in the Australian property sector, as supportive governments and employers getting staff back into the office help offset rising labour and material costs.

During the company’s annual general meeting, Mirvac said it has made progress towards its strategic goals following below market expectation 2024-2024 financial year results.

“It is also pleasing to see green shoots emerging and a more positive sentiment starting to return,” Mirvac CEO Campbell Hanan said.

Mirvac highlights strong demand for its soon to be built Sydney apartments Picture: NewsWire / John Appleyard

The group flagged the need for shelter to meet higher population growth across Australia as supportive for its new builds across Sydney, Perth, Brisbane and Melbourne.

“Affordability constraints, lifestyle changes, and an undersupply of housing in Australia are also resulting in a need for better choice of housing options,” Mr Hanan said.

Mirvac also reported it was seeing strength in its build-to-rent part of the business.

“The average age of a first-home buyer, for example, is around 36 years, which means people are renting for longer,” Mr Hanan said.

The company also said the number of Australians looking to downsize into the apartment space is helping to drive demand in the sector.

Mirvac chairman Robert Sindel flagged supportive government policies that will see the need for new houses to be built.

Australia’s population boom through immigration has seen the Anthony Albanese government set an ambitious target of 1.2 million new homes by 2030.

“Of course, having the right policy settings from government and regulatory bodies will also support the property industry to improve productivity and deliver much-needed housing supply to Australians,” Mr Sindel said.

Mirvac was upbeat about the market despite a challenging last financial year. Picture: NCA NewsWire / Christian Gilles

The upbeat AGM follows its full-year earning results in August, where the company fell to an $805m full-year loss on the back of a drop in the value of its office portfolio and warned that earnings will be hit due to tough conditions for developing high-rise projects started during the pandemic.

Mirvac shares slumped 9 per cent to close at $1.92 per share during trading on the day, but has since recovered to $2.13 prior to the annual general meeting.

Investors at the time raised flags that blowout costs from higher interest rates, material costs, higher labour wages and subcontractor collapses would put further pressure on the property sector as a whole.

CEO Campbell Hanan said in August the lower earnings would reflect the impact of a lower contribution from the company’s development business and higher net interest costs related to projects.

“This includes lower margins at selected Queensland and NSW apartments projects. However, we expect the next phase of ­apartment projects to return to our normal target range,” he said.

Mirvac did not update its targets during the AGM. In August it said it was targeting operating earnings this financial year of 12c-12.3c per security and a distribution of 9c per security, down from last year’s 14c and 10.5c respectively, and well below market expectations.

Originally published as ‘Positive sentiment’: Mirvac flags strong apartment demand in AGM