Mirvac Group's Residential Recovery Weathers a Fuel Price Setback

Improving development margins and steady settlements held up despite a Middle East conflict-driven softening in sales, with easing rate expectations now supporting the stock.

24 Aug 2026 · 3 min read

Mirvac Group's residential development business improved through FY26, delivering settlements in line with guidance and a recovery in margins, but rising rates and softening residential sales tied to Middle East conflict-driven fuel price increases pulled the stock down through April, before easing rate expectations helped it recover toward $1.90 by August.

Improving margins and steady settlement delivery

Pendal Group said first-quarter FY26 residential settlements reached 265 lots, up from 220 a year earlier though down on the prior quarter, with the group reconfirming FY26 settlement guidance of 2,000 to 2,300 lots, even as unconditional residential sales stayed flat quarter on quarter and included only 80 apartment sales, a fairly low number given how many apartment projects are underway. Yarra Capital Management said the stock jumped more than 5 percent after a positive earnings result, betting on a housing recovery at the premium end while noting the office portfolio was in great shape. Pengana Capital Group said developers including Mirvac reported improving margins and a normalisation in operating conditions.

War-driven fuel costs and a weakening outlook prompt exits

Pendal Group said third-quarter residential sales of 593 lots were down 14 percent on the prior quarter, with 241 lots settled, keeping the company on track for its 2,000 to 2,300 lot guidance albeit with a large fourth-quarter skew, while management flagged softening residential sales in April as higher fuel prices began affecting civil works. Perennial Partners said it sold out of a number of more cyclical holdings, including Mirvac, in the face of a weakening economic outlook.

A budget-driven land release and rate-cut beneficiary

Centennial Asset Management said Mirvac's land release and new build exposure looks attractive, particularly given changes announced in the recent federal budget, positioning it as a beneficiary once interest rates stabilise.

Easing rate expectations drive a recovery

Wilson Asset Management said the share price rose as a lower than expected June-quarter inflation print reinforced its view that Australian interest rates are likely near their peak, lifting sentiment toward real estate investment trusts broadly, and continues to like Mirvac for combining a quality property portfolio with a large development pipeline and leverage to an improving rate outlook.

August's result: guidance met, FY27 growth ahead

Pendal Group said FY26 earnings per share grew 7 percent, in line with expectations, helped by a recovery in development earnings including one-off profits from partial sell-downs of Harbourside apartments and the Monarch Glen estate, with lot settlements of 2,130 matching guidance. FY27 guidance points to 2 to 4 percent EPS growth, driven by a 40 percent increase in lot settlements as more estates become active.

FY27 guidance points to 2-4% EPS growth, driven by a 40% increase in lot settlements as more estates become active.

— Pendal Group, Newsletter, August 2026

What fund managers say they are watching next is delivery of the 40 percent increase in lot settlements guided for FY27, whether interest rates continue easing to support the residential recovery, continued margin normalisation in development earnings, and progress on the office portfolio Yarra Capital Management described as in great shape.