Harry Triguboff, who heads up Australia’s biggest apartment builder Meriton, says talk of an oversupply is nonsense. But this won’t bring much relief to those worried about their off-the-plan investments. After all, Triguboff’s job is building and selling apartments.
And a further clue for those trying to define whether the market is about to turn: Tribuboff has begun offering vendor finance to Chinese buyers to keep them in the market.
Triguboff, who happens to be born in China, went public this week and talked down claims that a glut of apartments was putting the market at risk, saying that this could then infect the wider market for residential property.
Triguboff told the South China Morning Post that Chinese buyers account for up to 40 percent of new Meriton apartments, and their numbers had slowed since September.
Triguboff’s comments hosing down any market panic were re-inforced by senior Westpac banker George Fraser, a former head of St. George, who dismissed concerns of a glut in Sydney and Melbourne and said neither capital was looking at an oversupply.
But while Fraser was talking down the apartment glut this week, in September his boss at Westpac Brian Hartzer was saying the bank is sufficiently concerned about apartment lending to be looking at a “micro level” down to “every single building” before deciding whether to lend.
Everyone, it seems has a view on the apartment market and we won’t know who is right until it happens.
From a rival bank, NAB chief economist Alan Oster says that “settlement risk” – of the possibility of a rapid increase in defaults, won’t be known for “12 or 18 months” when the market will see finalisation of many developments.
“We haven’t seen major signs of settlement risk,” said Oster.
“What would worry us is if all the Chinese buyers decided to sell all at once, but I can’t see why they would do that.
“But saying that, Melbourne is probably two times overbuilt and we don’t expect to see apartment prices, particularly for dog boxes, going north. We see them rather heading south.”