Money to be made in affordable housing

By: Sarah Tayler: November 19, 2018, Updated: January 21, 2019

Australian development company, Villa World, have shown that you can make a difference while still making a profit. A recently released report shows five consecutive years of double-digit revenue growth, with a FY19 profit forecast of around $40 million. In the 2018 financial year, Villa World also made 1.7 million in charitable donations and special offers for care workers in the communities they work in.

Villa World Chairman Mark Jewell said the solid shareholder returns over the period stemmed from Villa World’s competitive advantage in affordable to mid-priced house-and-land packages featuring a no-variation, all-inclusive turnkey model. Villa World’s strength in the affordable land and new home market is delivering continued profit through a moderating market, the Company told shareholders at its Annual General Meeting today.

Mr Jewell said the Company’s FY18 financial result, which included a Net Profit After Tax of $43.6 million (34.4 cps), up 15% on the previous year, demonstrated “an enviable resilience across our geographically diverse portfolio”. The company is looking to the future with a new strategic purpose and beliefs statement which Mr Jewell said “unashamedly sharpens Villa World’s focus on our customers, our people and our community”.

Managing Director and Chief Executive Officer Craig Treasure said the company was focused on delivering land and housing stock at its flagship developments, providing a solid revenue pipeline over the next two to three years.

“As reflected by other market commentators, we expect market fundamentals to remain generally positive, buoyed by population growth, solid employment growth, low inflation and relatively low interest rates,” Mr Treasure said. “We are seeing conditions for the land and new housing market continue to moderate as finance availability tightens. However, Villa World’s strong positioning within the affordable to mid-priced residential housing and land market provides a strong buffer against market challenges,” Mr Treasure said.

Current Villa World projects in Queensland include acreage development Montego Hills, house and land development The Surrounds in Helensvale, and Sequana a riverfront development in Logan Reserve all with house and land packages within the first-home buyer price range.

The need for affordable housing in Queensland is more important than ever, with a 2017 report showing that 14% of Australians were in housing need. This means this means over 1.7 million Australians are in need of housing assistance or paying more rent than they can afford (classes as over 30% of your household income). However, the future is looking a little brighter and there is innovation throughout the Queensland market trying to tackle the issue of affordable housing. Developer Grecon just picked up an award at the 2018 UDIA Awards For Excellence for their build-to-rent Gold Coast Commonwealth Games project — providing affordable rental stock close to local amenities and employment in Southport. The development now known as the Smith Collective will have 18 apartment towers and 82 townhouses when complete, exclusively for the rental market.

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