It’s a turbulent time for Australia’s property market.
On the one hand we’ve seen a huge drop in supply. But on the other hand, demand hasn’t exactly waned either.
And then there’s the whole banking mess and credit concerns as well.
Suffice to say, property values could go either up or down from here.
For Home Consortium Ltd [ASX:HMC] though, the clear direction is up. HMC locked in a 4.33% share price rise in early trading on the back of rising valuations for their commercial sites.
Pandemic no problem for Home Co
The good news comes via an independent valuation. Tallying a 5.2% increase in the value of 15 out of 30 of Home Co’s commercial sites since December.
Granted, this figure is subject to audit and final review. Meaning it may change before the result is made official.
That doesn’t diminish the fact that this is an incredible result.
While much of the economy is struggling, to secure this sort of win is remarkable. A trend that investors will no doubt be hoping extends to the Home Co’s full portfolio. An outcome that is certainly possible, as CEO David Di Pilla comments:
‘The preliminary valuation result is positive and reflects the quality and resilience of HomeCo’s hyper-convenience model and the increasing exposure to daily needs and services tenants.’
Plus, Home Co still has more projects in the pipeline as well. Including two new developments in NSW and one in WA. All of which should be ready to open by June 2021.
Not to mention a new deal for a site near Parafield Airport in Adelaide as well. Which includes several existing leases with some notable brands.
All in all, it appears this company is doing very well for itself. Positioning for a strong rebound as the economic reopening continues to unfold.
Obviously there is still a chance that Home Co’s fortunes could turn.
Until we get our hands on their annual report, we won’t know for certain how they’re stacking up. For all we know the remaining half of their portfolio may be far weaker.
At face value though, things are looking good.
And with the state of the property market, especially the commercial sector, things should be OK.
In fact, when it comes to Australian property as a whole, there may not be all that much to worry about. Despite a few hiccups here and there, the likelihood of a total crash seems slim.
Our resident expert on the matter, Catherine Cashmore, certainly shares this view.
She is preparing for another boom in fact. A resurgence in the property market that could last another five years. At which point, by 2026, the real crash will arrive.
Read all about this roadmap and how to take advantage of the property cycle, right here.
For Profit Watch