Sat 3 May 2008
New home sales crumble as demand wanes
More misery was forecast for housebuilders yesterday, after dismal comments made by Dresdner Kleinwort activated further selling of shares."Housebuilders' sales reservations have collapsed by almost two-thirds year-on-year during the critical spring selling season, according to confidential industry figures we have seen," Kleinwort analyst Alastair Stewart said.
"The Home Builders Federation's weekly survey of net reservations has been running at 60-65 per cent down year-on-year for at least the past two weeks," he continued.
Net reservations are the number of buyers agreeing to buy – usually requiring a modest deposit – less cancellations.
Predictably, Kleinwort’s comments rattled anxious housebilders. Persimmon’s share price fell 2.5% to a four-year low of 565p, while Barratt Developments, which many traders believe will soon launch a rights issue, fell 2.4% to a 7.5-year low of 269¾p.
However Bovis Homes, which dropped just 0.5% at 463p, managed to avoid the worst of the selling. This was largely owed to speculation that it could be target for a group looking to ride out the storm in the housing market by merging with a rival, cutting costs and taking advantage of greater buying power.
Posted by Marc Da-Silva
in Alastair Stewart, Barratt Homes, Bovis Homes, Dresdner Kleinwort, Home Builders Federation (HBF), News, Persimmon Homes on Sat 3 May 2008
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