Triguboff sees no bubble despite glut in apartment sites

‘Even if the Chinese buyers disappear, there won’t be a crash,’ says residential property developer Harry Triguboff.

Harry Triguboff does not expect a collapse in the apartment market. Picture: Jerad Williams.

A wave of sites is on the market as funding for apartment developments dries up, according to Meriton Group founder Harry Triguboff.

“I have never seen so many development sites for sale, but prices are not dropping much, maybe 10 per cent,” Mr Triguboff said.

“In the old days they would all be in receivership, but now interest rates are very low, so the banks are carrying them.”

Meriton would have looked at 20-30 sites in the past few months, he said. However, the developer will focus on gaining approvals for the land parcels already acquired and on building the apartments.

“I don’t need to buy sites in a hurry since they are not going up in price,” he said.

He does not expect a collapse in the apartment market despite the rash of new development.

“Every day we read that there might be a bubble because there are too many units being built. Every day we read that prices have stopped going up,” Mr Triguboff said.

“I assure you that there is no bubble in the making. Even if the Chinese buyers disappear, there won’t be a crash.”

Mr Triguboff argued that many of the sites — a number with approvals for unit projects — would not be developed this cycle, putting a cap on the number of new apartments coming to market.

In addition, there were still planning bottlenecks which slowed approvals and building starts despite improvements in the NSW planning system, he said.

However, he acknowledged that Brisbane and Melbourne may suffer more from an over­supply.

Mr Triguboff was continuing to sell older apartments that had been held as investments, replacing them with new stock.

Meriton has sold 400 older units (of up to eight years old) in Sydney’s Alexandria over the past two years and has either sold or has units on the market in Pyrmont and Rhodes.

The group is also selling 150 units on the Gold Coast.

Among Meriton’s projects are a 200-unit and a 400-unit project in Sydney’s Mascot and 500 units at nearby Rosebery. Its biggest project is at Sydney’s Pagewood where it spent $232 million buying British American Tobacco Australia’s 16ha-plus site in 2014 and 2015, which will deliver a total of 3000 units.