Jefferies Stays Bullish on Mirvac Despite Possible Rate Hike

what happened

Market Talk reports that Jefferies remains positive on Australian homebuilder Mirvac, even though it expects another increase in interest rates. A majority of economists forecast the central bank will add 25 basis points at its meeting next month. Jefferies analyst Andrew Dodds thinks that move could dampen sales and inquiries in the near term, and that it leaves the timing of a property recovery less certain.

Jefferies argues that revised tax settings favour new product and a larger pipeline of project launches over FY27, which should support sales speed. The broker says the stock trades at a 25% discount to net tangible assets and 13 times earnings, so residential market problems look priced in. Mirvac was down 1.4% at A$1.795 in early trading.

why it matters

Mirvac is a residential developer, so higher rates weigh on housing demand and sales expectations. For investors in Australian property stocks, the outlook for rates matters because it sets sentiment across the whole sector.

tags

instruments