Low supply and high demand pushing apartment prices up
Meriton founder sees no end in sight to boom.
Increasing demand without matching supply for apartments is causing price increases as houses become more out of reach for buyers.
Meriton group founder Harry Triguboff argues the high demand for apartments is due to ever-increasing home values, with both owner occupiers and investors seeing apartments as the affordable option. He says that supplies are not able to meet the growing demand and therefore values will continue to increase.
“Today we are in a situation where the apartment supply this year is not, I’m afraid, likely to meet the demand and that can mean only one thing - buyer competition forcing prices higher,” said Triguboff.
“Sadly, many mooted projects that were due to start by other developers have not and some of them never will start due to regulatory and financial restrictions.”
Meriton developments he says will not be dampened by funding regulation,s commenting “we’ve been around for a long time and we’re our own banker.”
This commentary comes after the release of the CoreLogic Home Value Index earlier this week which reported increases in house prices across seven of the eight Australian capital cities.
Triguboff added that low interest rates have also played an important part in increasing demand “for owner occupiers, the cost of money means buying is cheaper than renting. For investors, the return on renting out a new apartment is much better than depositing it with a bank.”
These comments are in stark contrast to other reports of there being an oversupply of apartments in some of Australia’s capital cities, most notably Brisbane and Melbourne.