Stockland lot settlements up

Stockland sees rebound

Stockland Group (ASX: SGP) reported its 1Q20 update today, and sales were moderately above market expectations.

The group is on track for just over 5,000 lot settlements in FY20.

You can work through the preso yourself, but the key takeaway for the residential sector was that the Sydney and Melbourne markets have improved markedly as 2019 has rolled on, while south-east Queensland is improving, but more steadily.

So far, the recovery has been overwhelmingly driven by homebuyers rather than investors (although Westpac yesterday loosened its lending criteria for interest-only loans to investors). 

FY21 is accordingly expected to be a better one for the residential market, and for the group.

One of the more interesting slides showed that - as anyone in the industry will confirm - enquiries leapt immediately after the election result.

Source: Stockland Group (ASX: SGP)

Farcically, some outlets are suffering from a chronic case of confirmation bias in reporting that the market recovery has been somehow invented or faked. 

A good rule of thumb is this: when in doubt, follow what financial markets and stock markets are telling you rather than the conflicted talking heads. 

For the record the SGP share price closed up by +6.49 per cent today, and the share price has absolutely ripped +43 per cent higher from $3.45 in early 2019 to $4.92 at today's market close.

Another part of this market update that the cherry-picking sensationalists won't report was that Stockland's defaults are now moderating, and will be back down to normalised levels in FY20.

Mirvac (ASX: MGR) also reported in its quarterly that defaults remain below 2 per cent, as well as a broad recovery in Sydney and Melbourne residential sector. 

In terms of housing prices, CoreLogic's latest figures show that Sydney and Melbourne are now up by +5.1 per cent since the election. 

Results around the traps elsewhere have been much more mixed, especially for new apartments.