Departing AVJennings boss Peter Summers not buying property boom story

The residential housing boom has been exaggerated, with market conditions more akin to recovery, says the boss of property developer AVJennings Peter Summers.

AVJennings chief executive Peter Summers: ‘I don’t buy into the property boom story.’ Picture: David Crosling

The residential housing boom has been exaggerated, with market conditions more akin to recovery after several years of ups and downs, says boss of property developer AVJennings, Peter Summers.

Pandemic stimulus, particularly HomeBuilder grants, was the catalyst for the building boom which kicked off midway through last year. It coincided with rapid price gains in the established property markets across the country.

Outgoing chief executive of the high-profile development company believes the frenzy in the housing market across the board is more a reflection of property price and construction recovery than a boom, with the numbers largely coming from a low base to begin with.

“I don’t buy into quite so much the property boom story,” Mr Summers said.

“I get that the numbers sort of indicate that and I think that HomeBuilder having a time frame of condensing things exaggerated that look, but if you actually just look at the bigger picture, I’m less inclined to use the term ‘boom’.

“I see it more as a story of the recovery that has had some Covid impact on the downside but HomeBuilder has helped stimulate decision. So, I see it as less dramatic in terms of what’s happened.”

AVJennings almost doubled its profit last financial year, finishing with work underway on 1537 lots. More than 950 contracts were signed over the years, with some 431 contracts amounting to $127.1m.

The last 18-months in the property market has been record setting on several levels. Residential construction activity is only now starting to recede after several consecutive record months for approvals between January and April. At the same time, established housing prices have risen 18.4 per cent nationally in the year of August

“Just before Covid really hit, we were seeing a strong recovery because, if you remember, the couple of years before that were pretty tough. We had a significant and steep downturn we were starting to come out of,” Mr Summers said.

“I think the first question now is, are we back to where things would have been in that recovery had there not been Covid? Or are we just seeing increasing numbers? I think it’s more the latter than the former.”

While some argue the federal government’s HomeBuilder scheme – which offered $25,000 grants for new builds – brought forward several years of construction activity, Mr Summers said it was more about offering confidence to the marketplace.

“When we were heading towards Christmas, everyone was fearful of HomeBuilder ending. We weren’t,” he said.

“We were really appreciative HomeBuilder played an important role to give buyers already in the market confidence to keep going. So no, I don’t think it generated sales, I think it just gave confidence to continue. Therefore, when HomeBuilder ended, we weren’t fearful things would stop.”

Now, Summers has flagged a likely lift in activity once lockdowns in Sydney, Melbourne and Canberra end.