Developer Harry Triguboff says migrants lifting rents but builders still going bust

The return of Chinese migrants and students has led to rising rents and apartment prices, but red tape is sending builders to the wall, says Harry Triguboff.

The newly completed Ocean by Meriton on the Gold Coast.

Recent boots in migrant numbers have led to rising rental costs and apartment prices, but tough state and local government planning policies, coupled with successive interest rate increases mean many established builders are failing.

Billionaire developer Harry Triguboff, who builds in Sydney’s suburbs as well as southeast Queensland, said apartment prices had increased the most on Queensland’s Gold Coast over the past month.

He said the values in his 76-level Iconica apartment building, which is under construction on the Gold Coast, had climbed by at least 10 per cent since November.

“Now groups of Chinese are coming to buy, the market is getting stronger by the hour,” said Mr Triguboff, co-founder of the Sydney-based Meriton Apartments.

“More immigrants and a lot more foreign students have arrived and are paying very good rents.”

Mr Triguboff said Surfers Paradise was booming and he had never seen it performing so well.

“Rents are very high,” he said.

Meriton expects rents to keep increasing. The average rental for a two-bedder at its newly completed beachfront high-rise tower Ocean on the Gold Coast was $900 a week.

“Based on current vacancies and strong levels of demand, we expect rents to continue to increase,” Mr Triguboff said.

In Sydney, he said rents had gone up the most in Homebush, west of the Sydney CBD, and also in North Sydney, where he had previously had difficulty shifting apartments.

Meriton, which manages 4250 units on behalf of landlords and owns a further 4500 build-to-rent units, now has a total unit vacancy of less than 1 per cent on the eastern seaboard.

New figures obtained exclusively by The Weekend Australian reveal that Meriton’s rents have increased 20 per cent in the past 12 months because of the big ­increases in foreign student arrivals and rental prices were now back to the same level as they were in 2019 before the Covid-19 pandemic hit.

Harry Triguboff atop the 76-floor Ocean tower on the Gold Coast.

Mr Triguboff said that he would like to build more apartment blocks but it was increasingly difficult obtaining council approvals.

The billionaire has amassed an extensive land bank of sites over the years but said it was difficult obtaining approvals to start apartment construction.

“The tragedy which is unfolding is that many fine builders are going broke,” Mr Triguboff said, blaming local and state government councils for onerous planning policies.

“That is another reason for prices rising. As these builders go broke, there is less built.

“The planning departments must ensure that builders don’t go broke.”

On the sales front, Mr Triguboff said Meriton’s online sales inquiries rose 50 per in January compared with December 2022, while walk-in inquiries had risen 25 per cent over the same time frame.

However, while prices fell during the middle of 2022 because of the initial multiple interest-rate shocks, those price declines had since been arrested and unit prices were increasing marginally.

“We have already started to increase prices on available stock across our portfolio of 1511 units in 2023 by 2-3 per cent, and the market is accepting those increases,” Meriton said in a statement.

This year, Meriton plans to build 1750 apartments to sell, a further 1900 to rent, plus 770 Meriton Suites along the eastern seaboard.

Apart from the Gold Coast, where the company is building Iconica and the next stage of Pegasus at Broadbeach, it is also developing in Sydney’s suburbs, including at Homebush and Parramatta.