Property giant Stockland is on track to increase its earnings despite cooling house price growth in Sydney and Melbourne.
The housing boom in Australia's two largest cities helped the developer deliver an 8.1 per cent jump in first half profit.
Stockland's underlying profit, the developer's preferred measure, rose to $313 million, aided by a 45.5 per cent leap in operating profits from its residential division.
Net profit jumped 50.6 per cent to $696 million in the six months to December 31.
Managing director Mark Steinert says the company ended the half with a record number of residential contracts, but demand has softened in hot spots Sydney and Melbourne, particularly on the margins.
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"We've had very strong double-digit price increases and it is reasonable that it pulls back somewhat," he told AAP.
The weight of supply on the Sydney market has slowed the annual property price growth rate to 10.5 per cent, from 18.4 per cent six months ago, last week's CoreLogic RP Data report showed.
In fact, all of the latest annual price rise in Sydney was racked up in the first half of the calendar year - in the six months from July 2015 to January 2016, prices actually fell marginally.
In the first week of February, Melbourne was still leading with an annual price rise of 11.0 per cent, while Sydney slowed further, to 10.2 per cent.
Mr Steinert said while there was uncertainty about the economic outlook, low interest rates would help support the property sector.
"The economy will continue to grow sub-trend for some time," he said.
"(But) the eastern seaboard is a lot stronger than the whole of the Australian economy... and 90 per cent of our portfolio is located there."
Residential chief executive Andrew Whitson expects the market to remain solid in Sydney, Melbourne and south east Queensland during the second half of the financial year.
Strong volumes in those markets would help offset weakness in Perth, he said.
For the full year Stockland expects to settle marginally above the top end of its target of 5,000 - 6,000 lots.
Stockland also slightly lifted its guidance to 6.5-7.5 per cent earnings per security growth for the full year and is targeting an increased distribution of 24.5 cents a share.
Shares in Stockland dropped nine cents to $3.95.
CONSTRUCTIVE GAINS FOR STOCKLAND
* Half year underlying profit up 8pct to $313m
* Revenue up 19pct from $1.58b
* Interim dividend of 12.2 cents, from 12 cents
