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Originally published Monday, March 21, 2011 at 6:03 PM

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Australian builder plans 500 houses in Seattle market

One of Australia's largest homebuilders is entering the U.S. market with a bet on King, Snohomish and Pierce counties.

Seattle Times business reporter

One of Australia's largest homebuilders is jumping into the Seattle market.

Henley Properties said Monday it plans to build 500 houses in King, Snohomish and Pierce counties by the end of 2012. That would make it one of the area's largest builders.

This is the firm's first U.S. venture. "Henley is making a bet the region is poised for recovery," said Peter Hayes, the company's managing director.

Local real-estate observers said Henley's arrival is a vote of confidence in the Seattle market, where new-home construction fell sharply during the recession and is just beginning to recover.

"All the fundamentals are strong here, even though we're still working our way through the recovery," said Allison Butcher, spokeswoman for the Master Builders Association of King and Snohomish Counties.

Land-use economist Matthew Gardner said Henley's announcement is encouraging, but he cautioned that new construction must compete for the foreseeable future with a growing number of bank-repossessed homes now for sale that are depressing prices.

But Hayes said lower construction costs allow Henley to build new houses at competitive prices.

Henley is 50 percent owned by Sumitomo Forestry, a giant Japanese homebuilder that has been active in the Seattle area for several years through a joint venture with longtime Bellevue builder Bennett Homes.

Sumitomo ended up with full ownership of the joint-venture properties as a consequence of the housing downturn, Hayes said, and is transferring management of those parcels to Henley. The Australian firm is building out those subdivisions at a pace of 15 to 20 houses per month, he said.

Henley also plans to start building houses under its own brand, starting with a 54-lot subdivision in Kent that it bought in October for $5.55 million from Kirkland developer Yarrow Bay Communities.

Twelve model homes will be built there to showcase Henley's designs, Hayes said. Henley also is buying other properties in Renton and elsewhere, he said.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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