Stockland is the large, mixed residential and commercial property developer.

They are a perfectly fine company, but at the same time, a good demonstration of the cyclical pressures facing REITs and, we think, housing stocks more broadly.

The higher mortgage rates, and plunging consumer confidence, are dramatically impacting new enquiries.

We believe the only “housing-related” stocks set to benefit at this stage are the banks (where we’ve been deploying capital). The next six months should contain a “sweet spot” for earnings, in which NIMs expand, but bad and doubtful debts haven’t started to rise.

We had tried to obtain an exposure through the building products companies (specifically ABC), thinking that the huge backlog in residential construction and generally resilient infrastructure and resources expenditure would lead to decent earnings at attractive valuations.

However, that approach hasn’t worked; all the building products companies (ABC, BLD, CSR, FBU) have sold off dramatically, and ABC and BLD in particular have struggled to offset rising input costs).

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.

Receive our investment insights

Something went wrong. Please check your entries and try again.