Real estate company McGrath has gone into a two-session trading halt to review its earnings forecast as the housing market eases.
McGrath, which only listed on the Australian share market in December, has placed its shares on hold so it can assess how its earnings are progressing against the prospectus forecast.
It plans an update to market before the securities recommence trading on Tuesday.
CMC Markets chief market analyst Ric Spooner said McGrath’s float has coincided with an easing housing market hit by a sharp decline in new home sales and falling auction clearances.
“A company like this is always going to be cyclical,” Mr Spooner said.
“There is a downturn in real estate sales in some parts of the market and that may be feeding through to lower revenue expectations for McGrath.”
The property group’s announcement has coincided with Friday’s warning by the Reserve Bank that a glut of new apartments poses a risk to household finances.
The central bank said a wave of new apartments coming onto the market in Sydney, Melbourne and Brisbane may weigh on property prices and rents.
McGrath last traded at $1.30 a share at Thursday’s close and has consistently traded below its $2.10 a share offer price in the past five months since floating.
The company had forecast a statutory net profit of $15.3 million for FY16.
The prospectus, issued in November, also warned house price growth would slow down due to an expected plateau in house sales.
Recent housing data shows auction clearance rates and new home sales have fallen, particularly in Sydney, which is coming off a boom.
McGrath, founded by John McGrath in 1988, has a network of more than 70 company-owned and franchised real estate agencies that conduct residential property sales, property management, mortgage broking, auction services and real estate training.