Harry Triguboff wants more Sydney sites as he anticipates Chinese developers could develop a presence
Meriton boss Harry Triguboff is seeking fresh Sydney residential development sites, as well as increasing output, as he’s noticed an uptick in local apartment buying interest.
After having about 70% of his market made up by Chinese investors, he told The Australian it’s now a 50-50 split with local buyers.
“It started before interest rates fell, due to rents going up and fixed [home loan] rates were already coming down,” he says.
Triguboff has noted a drop in building projects during the financial crisis had also resulted in pent-up demand.
"People who were sharing, at home or renting are feeling more secure [about buying] as rates are coming down.”
Triguboff says he has his eye set on sites in Green Square near the airport and Dee Why in Sydney’s northern beaches after spending $25 million on a site in Sydney’s North Ryde and a further $55 million in Chatswood on Sydney’s north shore.
His acquisitions could total $150 million.
“We will probably build 1,700 [apartments] a year now, it may get to 2,000, but I can’t see more than that.”
His investment push coincides with the recent interest rate cuts. Triguboff expects the Reserve Bank will cut the cash rate by a further 50 basis points over the next year but wants them to go further.
"No one thought the bank would cut 50 basis points.”
Meriton’s apartment rents have increased 5% over the past year, with some buildings performing better than others.
Despite wider residential apartment price decreases in Sydney, Meriton’s apartment prices have remained stable, according to The Australian.
In the Gold Coast however, Meriton’s apartment prices are down 20% from two years ago.
In Sydney, Meriton averages about $480,000 for a one-bedroom unit and $550,000 for a two-bedroom unit.
Triguboff says Meriton has been able to build more quickly to respond to demand with improved technology and mechanisation and some councils shifting to a more pro-development standpoint.
He foresees an increase in competition, sensing that large Chinese developers could take a footing in the Australia market.
Currently he says he faces little competition.
"So far, it’s only small developers, apart from Frasers."
