Club Sapphire is looking for developer interest in its plan for Merimbula units

Council gave approval to Club Sapphire for its estimated $22.68m plans to build 40 units contained in two blocks on land owned by the club on Merimbula's Main St in August 2021.

READ ALSO: Club Sapphire has plans for 40 units

The club had originally planned to undertake the development and had gone out to tender on the building work but in March 2022 CEO of Club Sapphire Damien Foley issued a statement to members saying the board of Club Sapphire had taken the decision to temporarily cease actively marketing the proposed residential units at 95/97 Main Street whilst it investigated a range of future options for the project.

"The initial marketing/sales strategy for this development focused partly on the local 'down-sizing' market however, the current take up rate in this demographic has been less than ideal due to what some consider to be the unpredictability of the local real estate market over the next two years," Mr Foley said.

In particular there was concern from potential buyers that they might have been committing to buy off the plan at the height of the market only then to sell their existing home in two or three year's time in a possible falling market.

Since the club issued its statement the highly overheated housing market has started to cool a little and the prospect of further interest rate rises is likely to add some uncertainty to the situation.

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Added to the market issues there is also the question of building costs. Mr Foley said estimated 10 per cent rises put more pressure on unit sales because more units would have to be sold off the plan in order to get the borrowing equation right.

The club committed to a financially prudent strategy that it would only go ahead if it could sell enough units off the plan, prior to work starting, to cover costs.

"Ultimately we're seeing escalating building costs, increasing interest rates and a cooling of the housing market. Plus there is uncertainty around when we could start work given the limited availability of local class 2 builders (needed for multi-storey buildings).

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"The board has therefore taken the responsible and safe decision to take it off the market for the time being. We didn't want to unintentionally mislead or confuse buyers about the likely completion date."

He had previously indicated that one of the options the club could investigate was to sell the development in its entirety to a residential unit developer.

The board has now decided to list the property as a development ready site.

Mr Foley said the club would test the market but "if it's not attractive we can afford to wait".

The DA still has over four years to run.

"The work we have done has led to a significant increase in the value of the property," Mr Foley said.

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