Harry Triguboff: Apartment prices should spike 20 per cent to cover higher costs
Developers will be forced to hike prices thanks to a perfect storm of bad weather, petrol prices, labour and building costs, the billionaire warns.
Property developers will be forced to hike new apartment prices by at least 20 per cent thanks to a perfect storm of bad weather, sky high petrol prices, increased labour and building costs, billionaire apartment mogul Harry Triguboff has warned.
Australia’s richest private developer said that unless developers of apartment towers of more than one hundred units hike prices they will either go broke or be unable to build.
“Our costs have gone up, and it’s a bottleneck, everybody wants the goods, and there’s delays everywhere,” said Mr Triguboff, adding that developers are still buying sites but not settling their acquisitions as they can’t secure council planning approvals in sufficient time frames.
Mr Triguboff — who has developed around 80,000 units since he founded Meriton Apartments in the 1960s — says buyers want more high quality residential apartments and he has turned his back on acquiring development sites in Sydney unless he says he can secure a real bargain.
He says the only council worth any merit is Bayside which takes in Sydney’s suburban Botany area where he has been developing his Pagewood Green multistorey towers for some time.
Out in Sydney’s west he described Parramatta Council as “crazy”.
“I will not buy sites where councils are crazy. The craziest council is Parramatta. It is impossible to work with them. I can make money but I can’t make time. There are some councils in Sydney I can work with – Bayside Council is one of them.”
Further north Mr Triguboff said he will buy in Queensland because it is attractive.
“We have many old people who want a warm climate (in Queensland) … and housing and living is cheaper in Queensland,” he said.
“So, we in NSW must be more accommodating. If we can’t learn this we will keep falling behind.”
Putting his money where his mouth is Mr Triguboff said he was looking at buying a third site in Surfers Paradise having recently completed development of his 77-level Ocean complex and having started his Iconica development on The Esplanade in Surfers Paradise.
The third site would yield 1000 apartments.
However, Meriton was changing tack and was now also opting to purchase smaller development sites, “not half monster sites’’ like in previous years.
“Not the 70 storey and 80 storey ones. I can turn the smaller sites around faster,” Mr Triguboff said, adding that he no longer wants to wait three years to win council planning approvals.
Mr Triguboff said claims by Deutsche Bank over the past week that it now expected residential prices to retreat by 15 per cent over the 12 months to mid-2023, before recovering by 5 per cent in the year to mid-2024, were “nonsense”.
“Builders already can’t make a profit. If the prices drop a lot, the government will step in and lower the crazy costs which they impose on builders. The government cannot allow for housing to drop.”
Mr Triguboff said Meriton was confident of the residential market and would continue to build apartments.
“If temporarily the prices are too low, we are happy to lease the apartments. At present we lease 10,500 apartments,” he said.
“I never built anything that did not bring a decent return.”
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