WA-based residential developer and fund manager PEET released their half year results in which they said there would be no improvement in the Perth housing market in 2017.
In their half year results PEET reported a seven per cent rise in interim profits of $19.8 million with pre-tax earnings up nine per cent to $44 million.
In their report, PEET's outlook for 2017 said "conditions across Victoria, New South Wales/ACT and South Australia are expected to remain supportive, while Western Australia and Northern Territory are not expected to improve during the 2017 calendar year".
The report said company sales were generally in line with expectations, with the strong east coast markets offsetting the continuing weak Western Australian and Northern Territory markets. It also said Perth's noticeably weak market brought down PEET's lot sales by 10%, to 1,488 lots compared with the corresponding period last year.
The number and value of sales contracts held by Peet increased slightly over the six month period to a record 2450 contracts with a gross value of $556.4 million, compared with 2,426 contracts worth $545.7 million as of June 30 2016.
According to The Australian Financial Review, Satterley Property Group CEO and BRW rich lister Nigel Satterley commented last year on how Perth's market was extremely tough with activity down 20 per cent.
"Everything has come off. Offices are 30 per cent vacant. Retail vacancy is at 28 per cent and there are 11,500 rental properties on the market," Mr Satterley told the AFR.
He said new lot sales across Perth were down from more than 9000 a year to about 5500 because population growth had fallen from 58,000 at the peak of the mining boom to just 12,000 a year.
Like Satterley Property Group, Peet has expanded beyond its WA-base and has a big portfolio of projects in Victoria, as well as a growing presence in Queensland.
As part of its interim results, Peet reported that its funds management business increased its contribution to earnings with development projects generating 299 lot settlements with a gross value of $108.6 million compared with 181 lots settled for $70.8 million in 1H16.
Peet also announced the sale of an undeveloped englobo parcel in Rockbank, west of Melbourne, Victoria for $30.5 million. The sale is subject to planning-related conditions, with settlement expected to occur in 2018.
Shareholders will receive a fully franked interim dividend of 1.75 cents per share.