Billionaire Harry Triguboff has been approached by large Chinese building groups interested in buying his prolific apartment developer Meriton, as the wave of Chinese interest in Australian property deepens.
Mr Triguboff will be in Guangzhou next week and will meet with Chinese builders there. He declined to name the companies.
“(The builders) are bound to want Meriton,” Mr Triguboff told The Australian. “We have the stock, we have the land and the know-how.”
“Its not simple to be a builder in a foreign country.”
However, Mr Triguboff said he was not that interested in selling the profitable company.
“As long as I am useful, I would like to be there,” he said.
He also noted that his 24-year-old grandson Daniel was working in the business.
Mr Triguboff said Meriton was worth about $6.25 billion. The company produces about 2000 apartments a year and earns about $350 million annually in rents from apartments that have been kept as investments.
Meriton plans to start work on 3000 units over the next year, including 600 at Southport on the Gold Coast.
“We have bought a lot (of sites), we need to develop fast,” Mr Triguboff said.
Meriton has looked at expanding into Melbourne, with Mr Triguboff saying the site it had been eyeing was snapped up by another developer.
“I will have to think if it’s worthwhile (developing in Melbourne). The profits are not as much as in Sydney,’’ he said.
Mr Triguboff said he was still bullish on the apartment market and on buying sites, saying he did not expect an oversupply on the back of heavy investment by Asian developers.
“It’s one thing to buy the land, and it’s another to build,” he said.
The wave of Chinese developers and apartment buyers provided momentum to the market, he said.
“Take them away and if we have to depend on our buyers and our bureaucrats, then our building industry will grind to a halt,” he said, estimating unit prices would drop 10-15 per cent in a number of areas if Chinese investment halted.
Mr Triguboff, who was born in the Chinese city of Dalian, said rents would rise if Chinese developers withdrew, as stock levels would drop.
Chinese businesses and unit buyers were long-term investors who were unlikely to retreat from the Australian real estate market in the way Japanese and US investors had in the past. “The Chinese are conservative, they will be here forever if we let them,” Mr Triguboff said.
Mr Triguboff’s comments came after the parliamentary inquiry into foreign investment in residential real estate released its terms of reference.
The inquiry, headed by Liberal MP Kelly O’Dwyer, will investigate whether foreign investment is directly increasing the supply of new housing and bringing benefits to the local building industry and its suppliers; and how Australia’s foreign investment framework compares with international experience. The committee has denied targeting Chinese investment.
Mr Triguboff also called on state and federal governments to reassess the first-home owners grants to enable first-time buyers back into the housing market.
“Although the NSW government doubled the grant amount in 2012, it really needed to look at lifting the threshold from $650,000 to at least $850,000, so first-home buyers can compete with their grants in hand.”
Mr Triguboff noted that the Queensland apartment market had finally begun to improve, with better sales over the past month. Queensland was seeing the start of Chinese buyers, he said, with the universities in Brisbane and on the Gold Coast becoming a drawcard to Chinese students, similar to the patterns in Melbourne and Sydney.