Soaring construction expenses have forced developers to scrap an $80 million luxury apartment complex in Hobart, despite strong buyer interest and completed approvals.
The 56-unit Macquarie Place development was cancelled after building quotes came in 30% higher than expected – a $13 million cost blowout that made the project financially unviable.
Developer Paul Huggins from Macquarie Street Investment told realestate.com.au the price increases were unprecedented across all building materials and services.
“It’s very disappointing. We have never had a failed project ever,” Huggins told the property website.
“But some items were 200 to 300 times more expensive than what was quoted on the QS (quantity surveyor) report just three months ago.”
“The price of windows was double the QS report. Demolition was two-and-a-half times higher. Concrete was 250% more than expected. Plaster was 200% higher. Joinery, cabinetry and stone were 500% higher.”
The project had attracted significant buyer interest, with three of four penthouses selling for $3 million each and 40% of stage-one apartments purchased off-the-plan within weeks of launch.
“It’s also disappointing for the people who were making plans to move into these homes,” Huggins said.
He said all purchaser deposits will be refunded.
The developers are now negotiating with an electric vehicle company to convert the former Holden dealership site back into a car showroom.
