AVJennings to put more housing on market
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SYDNEY, Nov 23 AAP
November 23 2012, 3:18PM
Residential property and housing developer AVJennings will put more new homes on the market in response to what chief executive Peter Summers says are signs of improvement after a difficult year.
Mr Summers says the period of cutting back on new housing stock is over as people appear more upbeat than six months ago.
"Our recommendation now as a management to the board is that we start reversing that and start actually producing a little more inventory," Mr Summers told reporters after AVJennings' annual general meeting in Melbourne on Friday.
"That is our belief that the market is starting to improve."
Mr Summers noted industry analysts such as BIS Shrapnel had forecast an improvement in the property sector in 2013 and beyond, while recent media reports had adopted a more positive tone about residential property.
He said "green shoots" appeared to be emerging in the affordable housing sector, supported by unemployment and interest rates at low levels and relatively high economic growth in Australia compared with other countries.
While recent interest rate cuts by the Reserve Bank of Australia (RBA) had helped, Mr Summers said the number one factor in getting the housing market firing again was consumer confidence.
"Let's say we got to neutral in terms of consumer confidence," Mr Summers said.
"Then I think we would get a very strong increase in the market because it has been so inactive for so long.
"There is such pent-up demand out there that recovery will occur."
AVJennings slumped to a $29.8 million net loss in 2011/12, as it battled weak global economic conditions, jitters over the unfolding turmoil in Europe, the high Australian dollar and the effect of natural disasters.
Mr Summers said Australia was not building enough houses to meet demand and "there is nothing that is going to happen in the short term that is going to reverse that trend".
At 1517 AEDT, AVJennings was steady at 30 cents.