The Australian’s Robert Gottliebsen, the mouthpiece of billionaire Meriton apartment developer Harry Triguboff, argues that higher interest rates in Australia and abroad are not bringing down inflation at the rate that central banks and economic forecasters had anticipated.
This stubborn inflation, in turn, is delaying interest rate reductions.
Gottliebsen said that he received a phone call over the weekend from Triguboff who reiterated his forecast that higher interest rates in the current environment will not force inflation down to the Reserve Bank of Australia’s (RBA) targets without a very severe recession.
Instead, Triguboff argued that higher interest rates would raise costs and trigger a reduction in supply, further exacerbating costs and limiting inflation reductions.
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Triguboff’s arguments surrounding interest rates and housing supply are broadly correct. High interest rates combined with rampant building cost inflation have driven dwelling approvals rates to decade lows of around 150,000 a year annualised.
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This rate of dwelling approvals is obviously way below the Albanese government’s target to build 240,000 homes a year.
However, while Triguboff might be correct on interest rates, we should also remember that he last month called for higher immigration at the same time as he is cutting supply and withholding apartments from the for sale market.
Triguboff told The Australian last month that he will develop fewer apartments because selling them will be difficult due to high interest rates:
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“It is harder to sell apartments now than ever before”, Triguboff said.
“The market for selling is definitely not rising…and it won’t rise much until we drop our interest rates”.
“Of course, I will not be starting so many flats again”, he said.
Triguboff also lamented that there are fewer buyers coming from China and he demanded more migrants “from everywhere.”
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“Our people (buyers) do financially worse than before because things in China are nowhere as good as before”, he said.
“The migrants we bring must be from everywhere”.
“Even though the Chinese are very good. Many countries have residents who would be only too happy to come”.
“Many people suffer overseas and they are often very well educated and used to hard work. We must have both of these”, Triguboff said.
Triguboff also told Gottliebsen that Meriton would retain two-thirds of its new apartments for rent, making it the nation’s largest landlord.
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“Many Australians wanting to buy apartments simply can’t raise the money, given the restrictions on bank lending and the high interest rates. And the new apartments are competing with older apartments being sold by the Chinese”, Gottliebsen wrote.
“Triguboff has always held some apartments back for rent, but is now only putting one third of his new apartments on the open market, with the rest being retained by Meriton and rented. Meriton is set to have an enormous stock of rental properties”.
If Harry Triguboff and Robert Gottliebsen are so worried about the housing crisis, why do they actively promote mass immigration?
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Rents have risen due to high immigration rates, making it more difficult for young people to save for a deposit. It has also helped to drive up inflation and interest rates, which Triguboff pretends to care about.
Perpetual high immigration will likewise transform Sydney into a high-rise city, to the detriment of residents but to the benefit of Meriton:
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This is why Harry Triguboff continues to demand more migrants to fill his high-rise shoe boxes while simultaneously reducing supply and becoming the country’s largest landlord.
Always bet on self interest.
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