Billionaire apartment developer Harry Triguboff could not hide his delight at the prospect of an interest rate cut in June and the re-elected Morrison government’s planned help for first-home buyers.
The Reserve Bank has given its strongest hint yet that interest rates will fall, almost certainly at its June meeting.
In the final week of the election campaign, Prime Minister Scott Morrison announced a scheme to guarantee the deposit of first home buyers who had only saved 5 per cent of the purchase price.
“I won’t have to discount anymore,” Mr Triguboff told ABC’s The Business.
“I sell now probably at a 10 per cent discount and, besides that, I give [buyers] money at 3 per cent and help them with the stamp duty, so I think at first I should be able to get the full price.”
He would not put a dollar figure on what his average 10 per cent discount was.
“It will be very good, it will be a great help to the real estate market which has been very weak, and I think it will give hope or it will give the people the confidence to buy, not to pull out and not to think,” he said.
Mr Triguboff believes there is now a floor-in-the-housing market and “we’ve definitely seen the bottom”.
“I think [property prices] will rise – I don’t think it will be a quick rise, but it will rise.”
‘I can already feel the difference’
The 86-year-old property developer is particularly buoyed by the Morrison government’s re-election.
“I can already feel the difference,” he told the program.
He said he rang and congratulated Mr Morrison on his election win.
“I congratulated him, and he said without my help he couldn’t do it,” he said.
“Which, of course, is an exaggeration,” he added with a big smile and a laugh.
Meriton sold five apartments on the Gold Coast on Monday following the election.
“The buyers didn’t know whether to go ahead or not, but once they saw the results of the election they are going ahead,” he said.
“The way that Labor ran it, they wanted people to lose money, and nobody wants to lose money.
“They’ve said [since the election] that they didn’t explain their policies, but I think they explained their policies very well to have got the number of votes they got.”
Economists and market watchers raised concerns about the government’s plans, supported by Labor, to help first-home buyers who cannot save up a 20 per cent deposit to buy into a market where mortgage stress is already rising.
Those concerns were only amplified by news that APRA is reducing the floor for mortgage affordability.
“Needless to say a combination of loosening credit restrictions plus a cut in interest rates increases the risk of another housing boom, which I am sure is not what the powers that be would want, but they may well yet get,” warned property analyst Louis Christopher, from SQM Research.
However, Mr Triguboff dismissed such concerns about debt levels and mortgage stress.
“There are people struggling, but that’s because the price of houses come down so they can’t sell. That is the real problem, not that they can’t repay.”