Pressure on developers

A SALES launch of a major new apartment tower at Main Beach will test the market amid significant challenges for developers, with some hitting the pause button on construction.

While major projects such as The Star’s Dorsett hotel tower and Sunland’s Hedges Ave high-rise are moving ahead, others are facing delays because of uncertainty in the marketplace during the COVID-19 pandemic.

Avanti Project Marketing’s Trent Milburn said they had brought forward the sales launch of Heran Group’s Midwater tower at Main Beach because of strong levels of inquiry. A soft launch for agents would be held tomorrow.

“We’ve had to get it into the market because we’ve had such pent-up demand with the agents, buyers and everyone else that we have said, ‘this is not going to last forever’.

“We stuck one sign up on the site and got 300 leads.

“I don’t know how it is going to go because it is a bit of an unknown with COVID-19.”

The Midwater project was

designed as a 55-storey giant but plans have since been scaled back to 38 floors and 119 units. Construction has yet to start and prices start from $800,000.

At Broadbeach, Raptis Group has paused construction of The Gallery after work started in January. Early works have been completed including the basement for the 21storey tower.

Joint managing director Evan Raptis said construction would move ahead once the company reached an unspecified level of presales.

“The Gallery was in preliminary works and we hadn’t started to come out of the ground with structure, so we took the prudent approach of pausing to give us an opportunity to assess the impact of COVID-19 on construction and the economy,” Mr Raptis said.

“Now that the effect of the pandemic in Australia has been evaluated and we’ve been provided more certainty, we have been able to further value engineer the project and improve its feasibility.”

At Varsity Lakes, construction of nine- and 10-storey buildings called Capital Court by industry heavyweights Homecorp and Condev Construction has been pushed back to later this year.

Condev boss Steve Marais said the project was due to start in June but had been delayed to July or September.

“That’s a month delay, which is not catastrophic,” he said.

In contrast, Mr Marais said work on stage two of VLine Developments’ Waterville Residences at Hope Island, which had been postponed, was now moving ahead, with the crane for the four-level building going up on Monday.

Master Builders Queensland boss John Duncalfe warned the true impact of COVID-19 would be felt midyear as the economic stimulus began to be wound back.

“We had an initial impact which saw some businesses have contracts suspended or put on hold and this put a panic through people,” he said.

“The biggest issue going forward is going to be whether people can have their debts serviced and that’s when you’re going to see more projects put on hold. But right now project builders are suffering because people cannot go into their display homes.

“The full impact will not be felt until after the end of the financial year because that’s when we will see the true statistics. There’s always a lag.”

Mr Duncalfe called on the council to consider incentives for the building industry similar to those introduced in the wake of the global financial crisis, including cuts to infrastructure charges.

“The big unknown right now is going to be if the banks tighten up lending,” he said.

“We need some sort of stimulus going forward as well as capital expenditure on major public works,” he said.