Meriton’s Triguboff upbeat as rivals falter and demands return to pre-Covid migration

The collapse of several major Sydney, Perth and Gold Coast apartment tower projects will prompt a much-needed flight to quality, the country’s largest private unit developer, Harry Triguboff has warned.

The billionaire’s head of residential sales, James Sialepis, came out swinging this week as rival developer Central Equity pulled the pin on its $500m yet-to-be-built Pacific One 486-unit tower on the Gold Coast, saying it could not deal with rising building materials costs.

Meanwhile, Sydney developer Merhis Corp and a swag of related entities collapsed into liquidation, owing the Australian Taxation Office at least $6m and its director, Mark Merhi, left Australia.

Merhis is unable to fix defects on its completed apartments as it can no longer raise money.

In Perth, developer Sirona Urban said surging construction costs coupled with labour shortages had forced its decision to axe a $165m luxury residential tower where more than 50 per cent of apartments had already been bought off the plan.

Mr Triguboff’s Meriton Apartments, which has been developing for 60 years in Sydney and more recently on the Gold Coast and Brisbane, noted it had an unblemished construction completion record and was “committed to 80,000 apartments and delivered every single time”.

Over the weekend, Meriton bought its third major apartment site on the Gold Coast for a $1bn, 1000-unit development just back from the beach.

The company bought it from Chinese developer Tony Fung, who has been trying to exit the site for four years.

Meriton Group plans towers with 200, 300 and 500 apartments in separate developments on this site. In a statement, the veteran developer said the latest buy showed his “immense confidence” in Australia’s tourism capital.

But Sialepis is cognisant of the effect the collapses of other developers’ apartment projects will have on the housing market.

“Recently, a record number of developments have been pulled from the market and buyers refunded their deposits due to the large spike in construction costs,” Mr Sialepis said.

“Although some buyers may feel relieved at retrieving their deposit, this is a small consolation in areas such as the Gold Coast where prices had risen in excess of 20 per cent in a year.

“These unlucky buyers will now need to pay the increased price elsewhere if they wish to re-enter the market.

“Nowadays, buyers must be very aware and proper due diligence needs to be conducted before buying from a developer.”

Mr Sialepis said Meriton customers buy at a fixed price inclusive of construction costs regardless of price rises in building material costs.

“Our long history with our subcontractors ensures we have the workforce to start, but more importantly finish what we promise our buyers and rectify issues if required,” he said.

Mr Sialepis said that since the RBA rate increases, the number of buyers who applied for Meriton Property Finance had grown by 25 per cent.

Meanwhile, Mr Triguboff stepped up his calls for migration to return to pre-Covid levels.

“In the Western world we are all worrying about inflation. However, nobody talks about the obvious,” Mr Triguboff said.

“As soon as interest rates are raised in democratic countries, workers ask and get more money.

“So on the one hand we stop inflation and on the other hand we let it continue. Everyone gets higher wages; only some pay mortgages.

“We have been raising interest rates yet inflation is still the same. So obviously raising interest rates is not the answer.

“We all know that there are not enough workers. But we still don’t bring migrants or workers. “Of course, if we don’t have enough workers prices will rise. Not only do we need more workers we also need more students.

“We are afraid of inflation, yet we don’t approve enough apartments. So rents go up.

“I cannot build any more apartments in NSW and am only using the land that I have.

“The old myth that bureaucrats can force developers to obey all their demands is wrong.

“No one will build to lose money so we have very little production.

“To build in remote areas is impossible because they have no workers,” Mr Triguboff added.

*The story by Lisa Allen first appeared on The Australian.

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