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NSW, Queensland keep AV Jennings on target

RESIDENTIAL developer AV Jennings is on track to meet or exceed its guidance of developing between 1200 and 1400 housing lots for the financial year, thanks to improving NSW and Queensland new-housing markets.

AV Jennings securities jumped by 7.5 per cent yesterday as the builder posted an after-tax profit of $8.4 million for the six months to December 31, turning around its $19.1m loss in the previous corresponding period.

AV Jennings chief executive Peter Summers said new home sales in NSW and Queensland were expected to stay at above average levels for the next few years, with both markets recovering from a decade-long shortage of housing supply.

Speaking to The Australian after the residential property developer’s half-year results, Mr Summers said the principle role of government in the housing sector should be to focus on stoking the supply of housing, which would help affordability.

Public policy, particularly in NSW and Queensland, had been too focused on increasing the demand for housing, through avenues such as interest rates, stamp duty rebates and first-homeowner grants, he said.

“There needs to be a refocus on supply-side issues,” Mr Summers said.

“Getting land to market is one of the biggest issues for affordability.

“(The problem with housing affordability) comes from what is charged to the industry by governments, the delays that happen by government and the amount of land that’s released by the government.”

Mr Summers said although the results were a significant improvement on the previous corresponding period, most pleasing was the continued increase in underlying business activity levels.

Revenue in the six months to December of $104.3m was almost double that in the corresponding period last year of $52.9m.

AV Jennings reported that revenues would be higher in the second half of the year, as new projects that were under way would contribute to profits.

AV Jennings shares closed yesterday at 64.5c, up 4.5c.

Source: The Australian

 

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