Harry Triguboff is remarkably calm about Australia’s worst real estate slump in a generation considering he’s got more at stake than perhaps anyone on the planet.
“We have our ups and downs and we keep building,” Mr Triguboff, 85, said in an interview from his office overlooking George Street, one of the busiest in Sydney. The developer, who’s worth US$9.2 billion, according to the Bloomberg Billionaires Index, plans to push on with expansion, even as the Sydney property market slides deeper into the doldrums.
“If prices fall, I’ll buy the land cheaper,” Australia’s second-richest person said. “As long as you don’t lose your cool. You have to look at things in the longer term.”
Sydney has been caught up in a property downturn sweeping the globe. Manhattan’s median condo price has dipped below US$1 million for the first time in three years, Hong Kong home values recently endured their longest losing streak since 2008, and prices in London’s prime central neighbourhoods are 19 per cent below their 2014 peak.
Ben Udy, an economist at Capital Economics, expects Sydney prices to keep dropping until mid-2020, eventually bottoming out at 20 per cent below their peak. Apartments could bear the brunt of the downturn, after a building binge that’s left a glut of units, he said.
For many investors, this is the first time they’ve seen a sustained decline.
Mr Triguboff, though, has weathered slumps before, most notably in the mid-1970s when debts almost crippled the business and led to an insistence on funding projects from his own reserves.
He’s overcome tougher obstacles. Mr Triguboff fled to Australia as a boy from a Russian community in China after World War II. After arriving in 1948, he then spent time in the UK, Israel and South Africa before moving back to Australia in 1960. He ran milk delivery and taxi businesses before building his first block of units in 1963.
Mr Triguboff remains as active as ever. Current projects include Pagewood Green in Sydney’s eastern suburbs – the biggest project he’s undertaken – and his first beachfront tower, the 75 level Ocean development on the Gold Coast.
Despite the recent tumble in prices, Mr Triguboff isn’t slowing down. “We build at the same rate,” he said.
That confidence stems from flexibility in his strategy. Mr Triguboff builds apartments for the sale, rental and short-stay markets, and changes the amount of stock made available based on where demand is strongest.
Meriton has 9,000 units available for rent, Mr Triguboff estimates, and he expects that to climb to 10,000 by next year. Its Meriton Suites division is the largest owner of hotel rooms in the country.
“I don’t care whether they lease or they buy,” added Mr Triguboff. “So where leasing is concerned we are very strong. I build 40 units a week and I can lease 150 units a weeks. So where is the problem?”
Growing the business in a cooling market will be difficult. Constraints on foreign buyers add to the challenge, and a slowdown from China could be particularly problematic for Mr Triguboff, whose brand of affordable high-rise apartments is a hit with migrants from the world’s most populous country.
Mr Triguboff remains optimistic. “China has more than one billion people,” he noted. “And they love Australia. I think they love Australia as much as we love Australia. So there will always be enough of them that will buy.”
A sale of Meriton was considered in 2014, but five years later Mr Triguboff remains firmly in control. His grandchildren Daniel and Ariel Hendler, both in their 20s, are involved in the family business and stand as potential successors to the octogenarian.
And what about his health?
Mr Triguboff describes himself as looking better than he feels. He said he had just one day off work through ill health last year. “How many did you have?” he joked.