Property prices still falling, says Meriton’s Harry Triguboff

This year could see the housing market fall into an even worse state than 2018, says the billionaire developer.

Billionaire Harry Triguboff says Australia is dependent on Chinese buyers. Picture: Hollie Adams

This year could see the housing market fall into a worse state than 2018, with the downturn flowing through to the broader economy, according to billionaire developer Harry Triguboff.

The lack of foreign buyers and the banks’ restrictions on lending had seen prices fall about 15 per cent in Sydney, the Meriton Apartments founder said.

“It may be as bad as last year, it may be worse,” he said of the outlook for 2019. While foreign buyers were returning, it was only in small numbers and Australian buyers were staying away, he said.

“Australia is completely dependent on the Chinese (buyers),” he said.

The slowdown in construction and lower rate of home sales would have a deeper effect on other sectors this year, he said.

“It must affect the broader economy,” Mr Triguboff said.

Last week a number of economists and analysts downgraded their outlook for Sydney’s and Melbourne’s housing markets, with AMP predicting a 25 per cent peak-to-trough fall in the two cities. Credit Suisse also expects a 25 per cent drop in Sydney. Researcher CoreLogic is now looking at an 18-20 per cent fall in values in Sydney and Melbourne, and National Australia Bank was the least pessimistic with a 15 per cent drop over the market cycle.

Mr Triguboff said negative equity — where the loan is higher than the worth of the home — was growing. But as long as borrowers met repayments, the banks were not calling in home loans.

“And people are paying,” Mr Triguboff said.

“In some ways the banks are doing a good job — they are not sending people to the wall.”

The lifting of the cap on interest-only lending by the Australian Prudential Regulation Authority in December had made a difference, “but not enough”, he said.

The cap — a temporary measure aimed at cooling the overheated housing markets — was introduced in March 2017, with the regulator requiring banks to limit interest-only lending to 30 per cent of new loans.

Mr Triguboff called on governments to relax the foreign buyers taxes in a bid to revitalise the housing and construction sectors.

He also called for early access to superannuation to allow younger people to buy a home.

“We must make it easy for investors to buy, because renting is a big item and it won’t change,” Mr Triguboff said.

“Rents have not come down for our type of units. Thirty-five-year-olds should be able to use their super to buy a house,” he said.

In Sydney, Meriton has completed about 1000 of its 2000-unit project in Sydney’s Pagewood, is finishing 500 apartments at Mascot and starting work on another 250 in the suburb. It is topping off a CBD project in Sussex Street which will include serviced apartments and a brewery. It is also building its tallest tower at Parramatta and has started work on a new Gold Coast tower.