Boomer project under review as war heaps new ‘overnight’ costs on developer
LOS ANGELES: The burgeoning consequences of war in the middle east is ripping around the world.
The future of the planned $52 million Lyric Lane development in Maylands is under review, as the developer claims the project has been hit with overnight price hikes amid the war in the Middle East.
Australian Development Capital’s Adam Zorzi said the group is considering its options for the seven-storey mixed use development on Eighth Avenue.
Mr Zorzi said it was likely some kind of development would go ahead at the site — where apartments have already sold off-the-plan — but it could involve a design change to bring down costs.
He said developers have been increasingly been “up against it” in recent years as building costs continue their relentless rise.
The war in the Middle East had added another layer of financial pain. New cost pressures include a 40 per cent jump in the cost of PVC pipes required for plumbing. PVC is partly made from petroleum — which is in short supply amid the war.
He said delivery costs for everything required to build a structure, which includes bricks, steel, glass and cabinetry, had gone up “north of 20 per cent” as freight companies slapped on extra costs to cover their own heightened fuel costs.
“That’s overnight increases,” he said.
Mr Zorzi said strong local competition for labour and materials had already pushed construction prices high, claiming the State Government was partially to blame.
“There is so much competition in the market for materials and labour,” he said.
“The State Government is spending a lot of money at the moment. . . and that’s taking a lot of the demand for people and materials, and that’s a major thing driving costs.”
He said Perth was unlikely to see new apartment developments starting amid current costs, unless they were at the luxury end of the market where the heightened construction costs could be factored into the final price tag.
In the Maylands market however, there was little scope to boost prices.
“In an area like that, there is not really the elasticity to keep increasing the product price to offset the construction costs,” he said.
“We are just working through our options.”
Mr Zorzi called for change in the development industry, claiming there were excessive fees and approval timeframes which added to overall development costs.
He said controlled skilled migration could help address the labour shortages, but if mishandled, could end up becoming counterproductive by adding to pressure on the undersupplied housing market.
ADC acquired the Eighth Avenue site in 2019, and received planning approval for the mixed use development in 2021.
At the time, the $30 million project was set to have 52 apartments, two communal open-space areas, and five commercial tenancies, including a tavern, two shops, a restaurant and a fast food outlet.
The City of Bayswater approved minor modifications in 2022 and an extension of time for work to start in 2024.
New design changes were approved last year, when it was noted as a $52 million development. ADC failed to meet its construction schedule in the last quarter of 2025.
The project aimed to become “a proud local landmark, revitalising a treasured historic building in the heart of the Maylands retail and dining precinct, bolstering the area’s vibrant and growing destination appeal”.