Mirvac Group's residential sales slow as a fourth-quarter settlement skew builds

A brief burst of optimism around Mirvac Group's housing recovery exposure and improving developer margins has given way to slowing residential sales and rising costs, prompting at least one manager to exit ahead of a heavily back-ended settlement year.

31 May 2026 · 4 min read

Mirvac Group (ASX: MGR) has spent the past year oscillating between genuine optimism about a housing recovery and renewed concern over slowing sales and rising costs. Pendal Group captured the early softness in October 2025, reporting first-quarter FY26 residential settlements of 265 lots, up on the prior corresponding period's 220 lots but down on the fourth quarter of FY25, with unconditional residential sales flat quarter-on-quarter at 619 lots, including only 80 apartment sales, a fairly low number given the volume of apartment projects underway. Total pre-sales stood at $1.6 billion, down 24% on the previous quarter, an outcome Pendal called disappointing given the backdrop of rate cuts and market undersupply.

A brief window of optimism

Sentiment turned more positive by early 2026. Yarra Capital Management noted the stock jumped more than 5% following a positive earnings result, with the fund's manager betting on a housing recovery at the premium end of the market while viewing the office portfolio as being in great shape. Pengana Capital Group struck a similar note, observing that developers including Mirvac reported improving margins and a normalisation in operating conditions during the same reporting period.

Sales momentum reverses again

That optimism proved short-lived. Pendal Group reported in April 2026 that Mirvac's third-quarter update showed residential sales of 593 lots, down 14% on the previous quarter, with 241 lots settled and the company still on track to deliver its forecast 2,000-2,300 lots for FY26, albeit with a significant skew toward the fourth quarter. The fund also flagged real-time commentary from management on the impact of geopolitical conflict, including a softening of residential sales in April alongside higher fuel prices beginning to affect civil works costs and selected construction materials, even as management reiterated its EPS guidance of 12.8-13 cents.

Management commentary on the real-time impact of the war included a softening of residential sales in April with higher fuel prices beginning to impact civil works costs and selected construction materials.

Pendal Group, Newsletter, April 2026

A cyclical exit meets a budget-driven bull case

The weakening trend prompted at least one manager to step away from the stock entirely. Perennial Partners disclosed selling out of a number of more cyclical holdings including Mirvac in April 2026, citing a weakening economic outlook. Centennial Asset Management, by contrast, maintained a constructive view in May 2026, describing Mirvac's land release and new build exposure as pretty attractive, particularly given recent changes announced in the federal budget, positioning the company as a beneficiary once interest rates stabilise.

What managers are watching next

With FY26 settlement guidance of 2,000-2,300 lots still intact but now dependent on a large fourth-quarter delivery skew, the catalysts fund managers are tracking are whether the softer sales trend seen through the March and April quarters stabilises, how rising fuel and construction costs flow through to margins, and whether the budget-related tailwinds Centennial Asset Management has flagged materialise once interest rates begin to stabilise.