"It is impossible to work with them"

Property developers will have to raise new apartment prices by at least 20% to counter the impacts of bad weather, high petrol prices, and increased labour and building costs, according to billionaire developer Harry Triguboff.

Triguboff, Australia’s wealthiest private developer, told The Australian that developers of apartment towers with more than 100 units will be forced to hike prices. Otherwise, he said, they will either go broke or be unable to build.

“Our costs have gone up, and it’s a bottleneck – everyone wants the goods, and there’s delays everywhere,” he said. He added that developers are still buying sites, but not settling their acquisitions as they can’t secure council planning approvals within sufficient timeframes.

Triguboff, who has developed about 80,000 units since he founded Meriton Apartments in the 1960s, said he has given up on acquiring development sites in Sydney unless he can secure a bargain. He also said that clashes with local councils convinced him not to pursue projects in some areas.

“I will not buy sites where councils are crazy,” he told The Australian. “The craziest council is Parramatta. It is impossible to work with them. I can make money, but I can’t make time. There are some councils in Sydney I can work with – Bayside Council is one of them.”

Triguboff said Queensland was still attractive to developers.

“We have many old people who want a warm climate [in Queensland]... and housing and living is cheaper in Queensland,” he told The Australian. “So, we in NSW must be more accommodating. If we can’t learn this, we will keep falling behind.”

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Triguboff said Meriton was adapting to current economic conditions and purchasing smaller development sites, “not half-monster sites” like in the past.

“Not the 70-storey and 80-storey ones,” he said. “I can turn the smaller sites around faster.”

Deutsche Bank predicted last week that residential prices would fall by 15% over the 12 months to mid-2023 before recovering by 5% by mid-2024. Triguboff scoffed at the prediction, calling it “nonsense.”

“Builders already can’t make a profit,” he said. “If prices drop a lot, the government will step in and lower the crazy costs which they impose on builders. The government cannot allow for housing to drop.”

However, Triguboff told The Australian that Meriton was still confident in the residential market and would continue to build apartments.

“If temporarily the prices are too low, we are happy to lease the apartments,” he said. “At present we lease 10,500 apartments. I never built anything that did not bring a decent return.”