Investors and upgraders, not first-home buyers, behind Villa World’s building lot sales in past six months

Investors returning to the market, not first-home buyers, helped Villa World secure 209 sales across 11 projects during the past six months.

The tally compared with 288 in the previous corresponding period.

First-home buyers constituted about 10% of buyers, with the bulk being upgraders.

Projects in Queensland, including the resource-strong market of Gladstone, notched up a 29% increase in sales success.

But Villa World reported the Victorian market continued to be “very challenging.”

Victorian sales and price growth continued to soften, with Villa World noting over the last six to nine months that Victoria’s previously strong population and migration growth had stalled.

“Consistent price growth over recent years has put pressure on affordability,” the company notes.

Villa World’s Victorian operations will carry forward 161 lots sold worth $29.8 million.

Across all states, an average gross margin of 24.5% per lot was achieved across all its sales, up from 18.8%, with the 2011 first half result affected by the sale of non-core projects.

The group recorded 343 settlements in the six-month period.

The group has total net lots under control of 4,897, including proportional joint-venture ownership.

Villa World indicates the group’s strategy remains unchanged with its focus of developing affordable residential communities, “combined with prudent capital management and maintenance of strong leverage and gearing ratios.”