AVJennings confident as buyers check-out new homes
Residential developer AVJennings is confident it can navigate through the soft sales conditions and construction challenges plaguing the industry as it overhauls its finances for growth.
The housing business’s market update for the first quarter of 2024 shows a softer start to the year compared to last, but AVJennings chief executive Phil Kearns noted a “positive” uplift from the end of last year, with more new buyers signing on.
“I am pleased to see another quarter of positive results, underscoring our resilience and determination in navigating through persistent challenging market conditions,” he said.
Sixty-eight lots totalling $36.3m were settled through the first three months of the year, a 28 per cent decline on the prior corresponding period.
But it is the forward outlook that has Ms Kearns optimistic, with buyers more active in the new home space following a stabilisation in interest rates.
Contract signings have begun to rise alongside a bump in new inquiries, which the market update said “bodes well for future settlements”.
The value of contracts signed more than doubled (up 117 per cent) last quarter compared to the start of 2023, with the 134 lots secured by buyers equivalent to $65m.
Year-to-date figures reveal this is a continued trend. A total of 428 lots have been secured this financial year, representing $192m in sales, and an increase of 72 per cent on the same period a year prior.
Buyers are also heading into display homes, with a 22 per cent increase in inquiries over the year to date.
The most popular areas for new housing sales were at master planned projects in Penfield, in Adelaide’s northern suburbs, southwest Sydney’s Cobbitty, and Ripley, southwest of Brisbane.
The top pick for apartments was Williamstown, in Melbourne.
AVJennings also secured a $30m debt facility increase, lifting it to $330m, in order to support future growth initiatives, Mr Kearns said.
“Our extended debt facility not only provides us with the financial capacity to weather market challenges but also supports our strategic objective of modernising our business operations,” he said.
No new land has been acquired as the business works through its existing pipeline of 13,838 lots.
AVJennings’ Pro9 Australian manufacturing facility on the NSW Central Coast is expected to begin product testing this month, which the company hopes will expedite the delivery of built-form housing and result in significant improvements in the quality and energy efficiency of homes.