Mirvac sees housing comeback as government stimulus drives market

The property developer says the Victorian government’s stamp duty relief could spark activity in the laggard state.

An artist's impression of Mirvac's redevelopment of Harbourside in Darling Harbour, Sydney.

Property developer Mirvac is making solid residential sales at its new Sydney projects and in housing estates in Brisbane and Perth, with even laggard Victoria is seeing an uptick in home sales.

The company called out the healthy performance of its housing unit, and it is planning a series of new launches to capitalise on the housing shortage and rising demand for owner-occupied apartments.

Mirvac chief executive Campbell Hanan says the company had made a good start to this financial year, with positive momentum across the business, and backed recent policy moves made by the Victorian government to spark activity.

Mr Hanan called out the benefits of policies to stimulate the market, like the Victorian government’s 12-month stamp duty relief amid a pick-up for the company.

“Within our residential business, sales activity was up 33 per cent on this time last year, supported by successful releases across our middle ring projects in Sydney,” he said.

“Our masterplanned communities in Brisbane and Perth also continued to trade well, demonstrating persistent demand for quality product in attractive locations, while we saw an encouraging uptick in activity in Victoria,” Mr Hanan said.

“We have a robust program of residential launches coming up over the next 18 months across both masterplanned communities and apartments, including the exciting launch of our luxury apartment project at Harbourside in the next quarter,” he said. “Initiatives like the Victorian government’s stamp duty relief for off-the-plan apartments and townhouses announced this week should also support activity in our residential business.”

Mirvac boss Campbell Hanan at its Willougbhy development NINE. Picture: Nikki Short/NCA NewsWire

Mirvac is shifting away from traditional commercial property and more into the living sector that spans apartments, housing, build-to-rent and land lease estates.

“We have made great progress on our non-core asset sales program in line with our capital allocation targets, while recent development completions across the living and industrial sectors add new, sustainable income to the group,” Mr Hanan said.

It is also selling key commercial properties and confirmed it was in due diligence to sell a stake in a tower in Bond Street in the Sydney CBD, which could sell around book value. It is being targeted by international investor BGO and the whole building could trade for about $580m with Mirvac and joint venture partner Morgan Stanley selling out.

The group also finalised its sale of 367 Collins Street in Melbourne to Hong Kong group PAG and sold off 75 George Street, in the western Sydney hub of Parramatta. That $50m sale to a local group was at a 6.4 per cent premium to June book value but meant Mirvac abandoned plans for a larger redevelopment.

The company has made strong progress in build-to-rent and has hit practical completion of LIV Aston, Melbourne, taking its build-to- rent portfolio to 1,279 operational lots. It is also finishing new warehouses in Sydney.

Mirvac exchanged 346 residential lots in the quarter, a one third jump on the first quarter of 2024, with a further 387 conditional sales and deposits on hand.

This was driven by stronger sales across housing estates in Brisbane and Perth and Mirvac said that leads were strengthening to their highest level in over 12 months

Jarden analysts said Mirvac had kept its guidance steady and residential sales and leads continue to improve, and construction costs were stabilising.

“We believe Mirvac is well positioned to benefit from structural under-supply in residential in the medium term but with heavy reliance on trading profits, we expect the market will want to see more evidence of improving residential momentum leading to stronger earnings growth in the medium term,” Jarden analysts said.

Mirvac shares were flat at $2.19 in early morning trade.

Originally published as Mirvac sees housing comeback as government stimulus drives market