This article is from the Australian Property Journal archive
HOME builder AV Jennings has seen a 29% year-on-year increase in settlements during the first quarter of FY25, while it continues to see south-east Queensland and South Australia as the strongest markets in the near-term.
During the September quarter, 122 lots were settled at a value of $50.4 million. For the same period, settlement volumes were up 82%, however the settlement mix compared to the prior corresponding period (PCP) was more heavily weighted towards land, resulting in lower average revenue per lot settled.
Key settlement contributors during the period were Merchant at Waterline Place (in Victoria), Deebing Springs (Queensland ) and Evergreen at Spring Farm (NSW).
Enquiry levels for the September quarter were stagnant against the PCP and June quarter, following a period of interest rate stability. Enquiries were more skewed towards apartments and land over built-form housing compared to the June period, driven by interest in the recently completed apartments at Merchant at Waterline and the state government-backed $86 million Harvest Square project, both in Victoria, as well as limited housing stock available for sale.
AV Jennings expects the skew to rebalance as built-form housing is brought to market.
Enquiry levels in South Australia lifted significantly in the quarter, while Victoria and Queensland were stable. NSW enquiries were slightly down due to reduced housing stock available for sale.
“The company continues to view south-east Queensland and South Australia as the strongest markets in the near term,” it said in a trading update.
“NSW continues to show signs of a recovery, while expectations are for a slower recovery in Victoria with only very early signs recently seen.
“In New Zealand, early signs of improving market sentiment are being seen following recent cuts totalling 75 basis points to cash rates by the RBNZ.”
AV Jennings still expects a “significant” settlement skew to the latter part of the second half of FY25.
There were 93 contracts signed in the quarter, totalling $34.5 million, below both the previous quarter (402 contracts, 162 retail) and the PCP (162 contracts). Notable contributors to the September quarter contracts signed were St Clair (in South Australia), and Lyndarum North and Aspect, both in Victoria.
The board is implementing a refresh program which will see a staggered departure of some long-tenured directors. It said the interview process has “been underway for some time, with numerous potential candidates having been interviewed so far”.
CEO and managing director Phil Kearns said, “We are making good progress with our objective of modernising and transitioning the business through disciplined capital management, optimising our project pipeline, focusing on strong markets and leveraging our Pro9 walling system.
“This approach, alongside our active pursuit of capital partnering opportunities, positions us well to drive future growth and enhance shareholder value.”
AVJennings has posted strong increases in contract signings and settlements in FY24, but had nearly all of its annual profit wiped out by the writing off of the Rocksberg project in Queensland.
