Home builder AV Jennings has reaffirmed its full-year construction outlook, stressing the Sydney and Melbourne housing markets still have plenty more to give.
The house and land packages group shrugged off recent negative sentiment toward the residential housing market, confirming it would secure contract signings for 1,800 to 2100 lots by June 2016.
"The board remains confident in continued performance and re-affirms that guidance," managing director Peter Summers told shareholders at the company's annual general meeting on Friday.
Chairman Simon Cheong said the level of contracts carried over into the first half of the 2016 financial year has already given business a boost.
"Whilst acknowledging a traditional bias to the second half, the forthcoming financial year is already shaping up well," he said.
Mr Cheong said key economic drivers are positive, with strong consumer confidence bolstering the housing sector.
Low interest rates and inflation, increased population growth and persisting housing shortages in Sydney and Auckland were also driving demand, he said.
Mr Summers acknowledged there has been considerable speculation about the future of Australia's housing market in recent months, which sparked negative sentiment in residential companies on the stock exchange.
But the Melbourne market, excluding apartments, is still well undersupplied and the company's position is sound, he said.
And in Sydney, the significant undersupply of apartments and homes in the preceding decade has dulled the impact of an increase in production.
"We strongly believe this part of the market has a sustained period of strong market conditions ahead," Mr Summers said.
Brisbane conditions are tipped to improve, with a shortage of housing that could be exacerbated if interstate migration numbers increase towards longer term trends.
And while Perth and Adelaide remain challenging, Mr Summers said the company's exposure to those markets is appropriate.
And he stressed that AV Jennings has a sustainable customer base, noting less than one per cent of buyers were foreigners.
Mr Summers said he was confident of meeting the challenges of affordability in the future but called on all levels of government to review taxes such as the GST and stamp duty to ease the burden for buyers.
The comments come after the company in August reported an 83 per cent lift in full year profit to $34.4 million.
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