12th Sep 2017

Apartment downturn could impact super

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Apartment downturn could impact super
Drew Patchell

Australia's biggest apartment builder, billionaire Harry Triguboff, is worried about the slowdown in the apartment market and the severe impact it will have on the economy (and your super).

Mr Triguboff’s latest company figures show that sales have dropped over the past six months and overall prices are also down around 10 per cent.

The restrictions on capital flowing out of China, new limits being placed on investors seeking finance from local banks, poor domestic wage growth and the Government policies on taxing foreign investors have all contributed to this slowdown in the apartment industry.

“Australians could lose an enormous amount of wealth,” said Mr Triguboff.



These Government interventions were purposely designed to slow down the market. Until recently, annual prices were rising in double digit percentages, and Mr Triguboff is suggesting the industry is feeling the effects of this slowdown. There are even signs that apartment glut is beginning to strike, with more than 30 construction companies in Queensland alone going bust this year.

Mr Triguboff believes a review is in order to investigate the taxation policies for foreign investors. He also believes that more needs to be done to allow access to superannuation for housing purposes.

What do you think? Should we be more cautious about accepting foreign investment, and where possible, tax these investments heavily? Is a slowdown in the apartment market a good thing? What impact could this have on your superannuation funds going forward?

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COMMENTS

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Waiting to retire at 70
12th Sep 2017
11:13am
“Australians could lose an enormous amount of wealth,” said Mr Triguboff.

Sorry, that should read "Mr Triguboff could lose an enormous amount of wealth."

What Australians are actually saying Harry is pay your fair share of tax, then, and ONLY then, will you be heard.

Until the money is 'jingling' in the Treasury coffers, WE CAN'T HEAR YOU!
George
12th Sep 2017
12:00pm
Agree 100%. This is the same guy who has increased his wealth massively by selling Australian property to the Chinese or as he called them "the Chinaman" in a radio interview earlier this year when he admitted half of his investment sales were to the overseas Chinese.

Thanks to China for restricting outflow of wealth, no thanks to our weak Govt for not stopping such rampant market-distorting purchases by overseas Chinese which is the major factor for the recent massive price booms in Sydney & Melbourne.
George
12th Sep 2017
12:13pm
Of course, this is just scare-mongering about Australians losing wealth for his self-interested purpose. If any review of taxation is done, it should be to restrict / massively tax such unnecessary & detrimental foreign investments.
KSS
12th Sep 2017
1:13pm
Pretty self-serving comments from Mr Triguboff don't you think?
Tib
12th Sep 2017
1:44pm
Yes I agree. I notice he has his eye on superannuation as well.
Old Man
12th Sep 2017
1:19pm
When any government introduces new legislation, or makes significant changes to existing legislation, there will always be a group which is disadvantaged. The aim has always been to ensure that this group is as small as possible. What we are seeing with this article is that some developers will be disadvantaged in an effort to slow the increase in housing to enable first home buyers to have a chance at getting into the market. Whether super funds are being administered by a financial group, or are self managed, regular reviews will make investors aware that a part of the real estate industry is lagging and adjustments should be made. Aside from apartment builders, I can't see too much of a problem with super funds and a plus for first home buyers.
Puglet
12th Sep 2017
2:39pm
Even with a 10% downturn in sales I doubt this billionaire will be applying for the pension quite yet. If he really wants to help retirees he could let all his empty apartments to pensioners who don't own their own home and are really struggling to pay bills and pay for food.
Rae
12th Sep 2017
2:44pm
The property cycle is moving along normally. If you wanted gains two years ago was the prime selling point in this cycle and super funds made 28% then from property held in their portfolios.
If Triguboff failed to take profits then I'd be very surprised.

Prices will move down now together with rents. This is good for renters and new purchasers as long as they have the patience to hold off until interest rates start rising.

Triguboff is right. The wealth will dissipate on paper. Property wealth is never collected until you sell or receive rents anyway. Some developers and speculators always get hurt during the down wave but it isn't as if the cycle is unknown.

Buying into the fall over the past year or so wasn't a good idea nor being slow finishing projects off.

Interest rates should rise next and that will be nice for cash investors. The cost of money has been far too low for far too long.
Bee
12th Sep 2017
3:59pm
This fellow Harry triguboff wanting government help is in the top 10 richest people in Australia.
But we do live in an age of self entitlement so I expect he will get it.
Bob
13th Sep 2017
7:16pm
“Australians could lose an enormous amount of wealth,” said Mr Triguboff.

Properly stated it should read "I could lose an enormous amount of wealth," said Mr Triguboff.

The trouble with Government intervention is that it is never done correctly. There is absolutely nothing wrong with foreign investment as long as it is in AUSTRALIAN OWNED BUSINESS. Investment in Australian housing should be totally taboo.
As far as the taxation of foreign investment returns I really believe that as long as these investors pay their proper amount of tax and not use smart assed accountants etc. to avoid their responsibilities, then that's O.K. with me.

With regards to the impact on superannuation funds, well I do think that there are many ways to alleviate this by finding other investments until the market for apartments finds its new lower level. Better for the new prospective buyers.


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