The latest reporting season has offered some insights into the state of the residential property market. In keeping with our expectations, conditions in the residential sector appear far from the much-feared precipice. Stockland’s residential business looks still to be in rude health, with NSW looking particularly strong and potentially subject to upward revisions in expected future profits. Boral delivered a marginally better than expected result and management struck a more upbeat tone on the outlook for its housing-exposed divisions. Meanwhile, Mirvac Group continues to push aggressively with project releases.
On the funding side, the number of new home loan commitments to owner occupiers rose 2% in December compared with November, slightly firmer than expectations. The composition of loan growth was similar to the past few months, with the value of loans to investors nudging lower, offset by owner-occupier loans.
Considering households in more detail, the latest Westpac Consumer Confidence Index reading defied the gloom engulfing equity markets with a strong reading and a solid bounce from the previous month’s slide. Both Carsales.com and JB Hi-Fi spoke of a positive consumer attitude, which was clearly evident in their results.