Evaluating Property Stocks Amidst Housing Slump – GMG, CHC And AOG

Evaluating Property Stocks Amidst Housing Slump – GMG, CHC And AOG

In the past one year, the housing prices have increased significantly in large parts of Australia, primarily in Sydney and Melbourne. Considering this scenario, let’s take a look at few Property Stocks and how they are trading on ASX.

Aveo Group (ASX: AOG)

While the broader property market across large parts of Australia has witnessed a significant downturn over the last 19 months, Aveo Group (ASX: AOG) has shown that demand for innovative retirement living remained strong, with Aveo’s sales lead indicators and written sales volumes for HY19 exceeding the same period of last year. Despite witnessing a decrease in average weighted auction clearance rates for the four major capital cities in which it operates, Aveo’s sales in the first half of FY19 were steady at an average of 19 written sales per week, while retirement unit pricing remained steady.

With an 83% positive rating in resident satisfaction (as per resident satisfaction survey), on the customer front, the experience of living in an Aveo retirement property is an overwhelmingly positive one.

In the past six months, the share price of the company decreased by 0.99% as on 27th March 2019. AOG’s shares were last traded at $2.010 with a market capitalization of ~$1.16 billion as on 28th March 2019.

Goodman Group (ASX: GMG)

Australian integrated property group, Goodman Group (ASX: GMG) delivered an operating profit of $465 million in 1H FY19, displaying 10.4 per cent rise over the prior corresponding period (PCP). The company witnessed a strong performance across its management and development businesses during the half year period.

For the next few years, the company expects to undertake an increased volume of development activity, for which an additional capital will be allocated to the development and partnership investments.

Currently, the company is experiencing robust market conditions with a shift towards increased automation, consumerism and heightened service expectations, due to which the company has increased its FY19 EPS guidance to 51.1 cents per share, up 9.5% on FY18.

On the stock performance front, in the last six months, the company’s shares increased by 30.32% as on 27th March 2019. GMG’s shares last traded at $13.460, with a market capitalization of ~$24.47 billion as on 28th March 2019.

Charter Hall Group (ASX: CHC)

Australia’s leading fully integrated property group, Charter Hall Group (ASX: CHC) is having offices in Sydney, Melbourne, Brisbane, Adelaide and Perth.

For the half year ended 31 December 2018, the group reported operating earnings of $108 million and achieved growth across all the key metrics. During the half year period, the company’s property investment portfolio increased by 6.7% to $1.8 billion. Driven by the strong performance and level of transactions in the first half, Charter Hall Group has increased its FY 2019 guidance in the range of 14% to 17% growth in post-tax operating earnings per security as compared to FY 2018.

On the stock performance front, in the last six months, the company’s shares increased by 40.92% as on 27th March 2019. CHC’s shares last traded at $10.280 (up 1.181% during the days’ trade), with a market capitalization of ~$4.73 billion as on 28th March 2019.


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