Triguboff pleads for no rate hike

Harry Triguboff warns against another interest rate rise, saying builders and developers had never had such a high amount of bankruptcies and borrowers cannot afford another rise.

Artist impression of lower ground floors on the Cypress, the Harry Triguboff project planned for Surfers Paradise.

Apartment multi-billionaire Harry Triguboff has strongly warned against another interest rate rise come Melbourne Cup Day saying builders and developers had never had such a high amount of bankruptcies and borrowers cannot afford another rise.

Mr Triguboff, founder of Meriton Apartments, the nation’s largest private builder of units, said demand for housing is growing and supply is falling.

Just released Australian Securities and Investments Commission figures reveal construction led business failures in the September quarter making up close to one third of all insolvencies in the September quarter with 783 business collapses up 27 per cent from the June quarter.

This is coupled with the fact many foreign companies came to Australia to develop and build but have since exited because they lost millions of dollars, Mr Triguboff added.

Chinese group Country Gardens has put some of its Sydney projects on the market after selling its huge Melbourne housing estate Windermere for up to $250m this week.

Risland is also among a number of Chinese developers who have started pulling back from the local market over the past three years.

Others include Greenland, Yuhu, Poly and Dalian Wanda.

“The Build-To-Rent companies from overseas have stopped coming. The builders and developers never had such a high number of bankruptcies. So surely raising interest rates will not help production. If raising interest rates is even mentioned people get frightened and do not buy,” Mr Triguboff said.

Harry Triguboff says says if interest rates are raised again the repayments will rise.

“The authorities must take into account what are the number of units required to be

built and what is the profit margin,” Mr Triguboff said.

“We must consider what has been approved, what is built and what is finished. The finished housing product is a lot lower. And we are falling behind and will fall further behind. The demand is growing and the supply is falling.”

The apartment titan says if interest rates are raised again the repayments will rise and the

production will fall. “That is not what is required. People can’t pay more to build or pay

more to repay their loan.”

He also called for banks to start to lend money to builders.

“They refuse to lend. They must find a way together with the government to provide finance. “Builders can’t pay 15 per cent (interest rates) instead of 5 per cent (interest rates).”

Mr Triguboff who has lodged plans with the Gold Coast Council to add a further three towers in his new development Cypress fronting 3346 Surfers Paradise Boulevard above the light rail, called on state planning departments to look at ways to approve not at ways to refuse development applications.

“They are there to approve. If they can’t approve, they should change the code. If there is no profit there is no building. Councils don’t take into account that taking three years to approve when costs are rising sends builders broke.”

“The building industry, the councils, the banks and Reserve Bank must work together.

“People need accommodation and they are not getting it. A country without growth

only goes backwards. And that is not what we want.”

Mr Triguboff reiterated that the Reserve Bank has to forget raising interest rates.

“They can’t even talk about it, people are scared. Even America is now saying that raising interest rates is in the past.”

…the government is silent. (but) We can’t presale on a market where the building costs rise and the repayments rise. That was obvious a long time ago and must stop.”