Joe Russo forecasts "clean-out" of smaller Melbourne developers

Joe Russo forecasts
Joe Russo forecasts "clean-out" of smaller Melbourne developers

Melbourne high-rise developer Joe Russo has suggested finding new sites for development in Melbourne that stacked up was now a lot harder. 

He forecast a lot of smaller developers would run into trouble with banks tightening up their development lending criteria following changes enforced by APRA.

"To get a loan now you need a proven track record and you have to have more pre-sales," he said.

"So there will be a nice clean-out of development sites from these developers, who paid a lot of money, but who now can't make them work.

"They will try to offload them, but there aren't a lot of takers," he told The Australian Financial Review.

He said sites with permits had too-high price tags, while those without permits now came with too much planning risk, following new interim height controls last year by Victorian Planning Minister Richard Wynne.

Caydon has recently received approval for the first stage of its $700 million Moonee Ponds development in Melbourne's inner north-west.

Caydon has yet to secure a permit for the $1 billion Nylex site development in Cremorne.

Mr Russo paid over $42 million to buy the 13,400-square-metre Moonee Ponds site from Leighton Properties and Qualitas in April last year with plans for over 1200 apartments.

Picture of Caydon's Margaret St Moonee Ponds development

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Development Moonee Ponds

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