Drop bank rules that make it impossible to borrow: Meriton founder Harry Triguboff

The country will slide into a housing shortage unless the way we do business changes to allow more building, Meriton’s Harry Tiguboff warns.

Meriton’s land at Little Bay, and its proposed development.

The present position of this country is worrying, especially with housing in crisis.

The strength of Australia has always been that people owned their homes; but they can no longer afford to have homes. We must look at the reason. The Reserve Bank knows the problem buyers have in purchasing a home or unit is because of the high rates of interest.

But nothing is done. Builders are not lent money by the banks and again nothing gets done. Councils make it very difficult to build. We must realise that the less we build, the more our rents go up. At the same time, the people who own rental properties are selling them because of the low returns due to the imposts they face.

We must get together and work out how we can produce homes. We need to look at where people will purchase homes, and builders will build, and banks will lend. It’s not how we do it that’s the problem, though. We must have a goal, and to get going.

At the moment, units are not being built because they must be pre-sold. Sure, you can pre-sell small developments, but not to the level that is required. The industry needs to catch up. And then continue. We cannot procrastinate. We must change the rules to aid production.

So why not require no pre-sales, drop interest rates, and have bank rules that make it possible to borrow. Councils should also co-operate and ensure that enough land is available for profitable projects. We know how much we need, and that must be achieved. We need to take into account that it takes a long time to build big buildings, which is what our population needs.

Artist impression of Meriton Shore, a Surfers Paradise supertower project proposed by Harry Triguboff. Picture: Supplied

For now, people have lost hope that they can own a home. We need to show them that they can. Young people must use their superannuation.

If we don’t do all these things, how can we survive? We will just keep sinking.

As developers, we face too many hurdles. I have land in Sydney’s Little Bay, but it will not be approved. This could be because I can actually build on it. But if I had no money and there were many people occupying the land, or there were problems with water, then the land would have a chance of being approved. Only a chance. No more. But in any case, the situation I describe will certainly not attract developers. And that attitude won’t get us anywhere.

The council there approves just a small fraction of what they should by law. They think that because they won’t approve, I will agree to what they might one day approve.

Governments must change their attitude in this case. Meriton will not build on this waterfront land without ensuring safe access to the beach. We also want to know what floorspace the government will get on an eventual redevelopment of the jail next door.

I won’t get smaller floor space than they do and, so far, we don’t know what they have in mind.

These problems show that with bad approvals, owners don’t and won’t build. And the country still needs accommodation, and no one can agree with these blocks to progress forever.

Looking at Meriton’s position shows what is happening. We did have a lot of land. And the market dropped, so we decided to build, because nobody wanted the land. We also decided to buy land in Queensland.

Now, in Sydney, we have land for the next five years, without even touching Little Bay. We stopped buying in NSW three years ago and in Queensland two years ago.

Others could be in the same position. They can’t sell the land, so they build.

But this land won’t last forever. If they don’t buy new land, they will stop building. We must observe what land parcels developers are buying – and you will see they are not buying. If they don’t buy, then soon enough they will stop building.

They are building less and less because there are no profits in doing projects. Build-to-rent has been the hope, but no one is building it at scale. The Prime Minister wants to build 1.2 million dwellings in five years, but two years are already gone and very little has been built.

Harry Triguboff is founder and managing director of Meriton Group.

Originally published as Drop bank rules that make it impossible to borrow: Meriton founder Harry Triguboff