High-rise Harry to crash Sydney rents

Amid the collapse in international tourism, Meriton’s Harry Triguboff has made the “painful” decision to convert several short-term holiday apartment towers into long-term rentals:

In a major blow to the tourism accommodation sector real estate mogul Harry Triguboff has taken the difficult decision to convert up to five proposed serviced apartment towers planned for the eastern seaboard into residential complexes…

The Sydney-based Mr Triguboff, worth around $15.5bn, said the lack of tourists and the dropping accommodation prices had led him to the difficult decision, which will see the removal of thousands of rooms from the nation’s accommodation stocks.

“The serviced apartment prices have dropped by 10-15 per cent and they are not going up,” Mr Triguboff said in an interview on Wednesday night…

Mr Triguboff said that by axing the serviced apartments in favour of residential towers “we just felt that we could make more money”.

Sydney’s apartment rental market is already heavily oversupplied, as evidenced by ballooning listings:

And crashing rents:

Projections released last month by the National Housing Finance & Investment Corporation (NHFIC) also forecast worsening oversupply in 2021 and 2022 owing to the collapse in immigration amid strong construction:

High-rise Harry’s decision to convert holiday apartments into long-term rentals will only worsen the oversupply.

Great news for renters. More bad news for apartment investors.

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