Property magnate Harry Triguboff’s call to lift unit production

Australia’s housing crisis is set to deepen, with a big drop in new apartments in Sydney coming onto the market amid hefty government costs, warns Meriton’s Harry Triguboff.

Australia’s housing crisis is set to deepen, with the number of completed apartments in Sydney falling 65 per cent from 30,400 units in 2018 to just 10,700 last year. Australia’s wealthiest private developer Harry Triguboff predicts that by 2024 just 4500 units will be completed in Sydney.

Mr Triguboff’s Meriton Apartments is still building 2000 units a year in Sydney, but he says drastic steps must be taken to increase unit production and this includes reducing government costs on apartments and welcoming foreigner buyers – who are prepared to pay more for housing – back to Australian shores.

Mr Triguboff says building apartments in “average” suburbs like Sydney’s Mascot no longer yields profits given high government costs.

According to the Meriton founder, the land cost for an apartment is $250,000, construction is rising, the GST soaks up $100,000, interest claims $75,000 and then there’s $35,000 in agent’s commission. Plus there’s the impost of another $50,000 for each apartment in architecture and engineering costs, as well as rates, water costs, lawyers, surveyors, accountants and bookkeepers.

All up, the cost to produce an apartment is $1.01m and that cost, Mr Triguboff says, is around the same price that he will get when he sells the unit.

“The volume will be insufficient … and there is always the fear that the final number of units will not be achieved, or the property may take longer to get approved. There is no certainty for years,” he said.

“This is the reason that very little is built. Also, the interest rates are constantly rising, and the government wants to beat inflation.”

Property mogul Harry Triguboff at his home in Vaucluse, Sydney. Picture: Nick Cubbin

Mr Triguboff said developers had a big problem selling apartments in Sydney because interest rates are constantly rising and the number of buyers had dropped by hundreds of thousands due to the cessation of migration over the past two years.

He has called for interest rates to stop rising and for a restart of immigration.

“Workers must be brought in and that will bring costs down. The state government must drop their charges and taxes,” he said.

“The planning department must be brought under control. We have been complaining about the planning department for many years, but nothing happens.

“The federal government must get involved. The ministers refuse to discuss the situation.

“They run away, if they are seen with builders they might get into trouble. If they do not see the builders, they can’t understand much.

“Good ministers are either given junior positions or are without power. All politicians think about is votes. People understand this and, because they are bored with both parties, we have the teals who want to fix the future but don’t care about the present.

“We must immediately bring back the one million people we lost (due to the closure of immigration).”

Mr Triguboff added that foreigners were good for the housing market because they paid better prices.

“But the government has doubled (migrants) stamp duty. Since they don’t buy, the increase for the government does not happen.

“The government gets big sums of money from the buyers, but if there are none, the government misses out. A target must be set and achieved,” he added.

Mr Triguboff said his company is constantly building and leasing and selling a little, but was “waiting for strong action”.