Harry Triguboff: Unit prices to rise further
Meriton Founder and Managing Director Harry Triguboff says unit prices for sales and leasing will rise considerably as construction costs surge and Australia opens its borders to migrants and students, placing pressure on the already low supply of apartments.
“Building costs have risen in excess of 25% year-on-year, the biggest rise in Meriton’s 60-year history, and the uncertainty of world markets is likely to see this trend continue. The landscape for developers and builders is very different compared to 30 years ago because our reliance on overseas materials is much higher today. Home builders across the nation are struggling to cope with the surging costs, some are walking away from old build contracts due to the real fear of going broke, while others have stopped quoting fixed costs given the uncertainty.”
Across the nation, building companies are showing signs of stress, with 25% of all insolvencies nationally happening in the construction sector.
“Construction costs are up and builders are in shortage. At the same time the demand for units from owner occupiers and tenants, while already very strong, will be boosted by the return of international students and workers, so we can expect the prices to go up considerably.” Says Mr. Triguboff.