Stockland CEO says Australian property market won't crash but Sydney growth to flatten

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Sydney's once-red hot property market will probably be flat this year, while Perth's will keep falling, Stockland chief Mark Steinert told CNBC.

But there's no prospect of a real estate crash, Steinert said, as the Australian property development company reported a 51 percent jump in first-half net profit to A$696 million ($492.5 million).

The company added A$433 million to the value of its newly refurbished commercial buildings - mostly shopping centres - which helped boost net profit for the six months to December 31. Without the refurbishment mark-up, interim net profit rose 8.1 percent.

Residential property sales drove a 19 percent revenue rise to A$1.6 billion.

"The strong performance of our shopping center portfolio is a good pointer for the Australian economy in general," Steinert said.

He said Australia's residential property sector, meanwhile, was underpinned by reasonable employment growth, "solid" consumers, an undersupply of housing and low interest rates.

"We think Sydney prices over the next year will likely be flat, we think in Melbourne growth will be more around flat, [up] 2-3 percent, Brisbane [up] 3-4 percent, and Perth will probably see some continued weakness with the read-through from the mining sector," Steinert said.

"It's more [like] lower for longer from here, we think," he added.

Sales of new homes jumped in December, after falling in the three previous months, the Housing Industry Association (HIA) said on Wednesday. The HIA's survey of large-volume builders showed sales of new homes rose a seasonally adjusted 6 percent in December, from a 2.7 percent fall in November.

But in January, Fitch Ratings warned that the pace of house-price growth would decelerate sharply in Australia this year, to run at a nominal growth rate of 2 percent, compared to an average annual growth rate of 8 percent across the country's eight capital cities between 2013-15. The property market slowdown follows years of scorching price rises, particularly in Sydney and Melbourne.

Stockland slightly increased its dividend from 12 Australian cents to 12.2 Australian cents. Shares in the company fell 2.2 percent at $3.95 each on Tuesday. The ASX 200 closed down 1.7 percent.

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