Lend Lease chief executive Steve McCann said there was a general shortage of housing in Australia, which gave him confidence that the downturn in the housing sector would ''bottom out'' and start to recover, hopefully soon.

''We don't see massive pressure on prices, and it will take some time for the economy to get back into full swing, and that should result in the right sort of balance there, we think,'' Mr McCann said yesterday.

The situation was different to the United States, where some areas had been ''horribly over-built'' and house prices had fallen significantly, he said, while in London the housing market was in a similar position to that of Australia.

''There's a significant housing shortage, and the amount of building approvals in the last two years in London has been well short of what's required to meet demand.

''So, again, there are signs that in the medium to longer term that market should be quite robust.''

Mr McCann affirmed that Lend Lease was on track to achieve an annual net operating profit of around $300million.

In May, Lend Lease revised down its guidance for full year net operating profit for the 12 months ending June 30, 2009 to $300million.

Mr McCann said the group's construction arm, Bovis Lend Lease, was getting more work from government contracts, and the proportion of earnings in Australia coming from government work was now around 50 per cent.

''It was a lot lower than that historically, and we're hoping that in the next week or so, we'll announce another schools project, which will take the total amount of schools projects we've procured to over a billion dollars.'' AAP