Diversified property investor and developer Stockland and one of the country's biggest home providers has posted a 70 per cent drop in net profit to $311 million, amid falling prices for retail assets and what is described as the worse residential market in three decades.

Investors showed their concern over the almost doubling in defaults in the residential business to 7 per cent and the lower guidance of settlements for the coming year, sending shares tumbling 6.4 per cent to $4.30.

"We are clear that the housing market has bottomed, but we are cautious about the pace of recovery, particularly as it relates to lending availability," chief executive Mark Steinert said.

Stockland has bought the remaining 50 per cent in the Piccadilly Centre, Sydney.

"We’ve seen some improvement in market conditions since the federal election in May, with inquiry up around 50 per cent in Sydney and Melbourne, and a range of other positive macroeconomic news including interest rate cuts and APRA’s amendments to guidance on mortgage lending criteria," he said.