An artist impression released in 2024 of the outlook from one of the apartments proposed in Kokoda Property’s ‘Ruby Ruby’ development in Milton. Image supplied.
Skyrocketing construction costs have been blamed for terminated contracts at a 144-apartment tower, with revised prices as much as $1m higher per unit – amid a warning this is not the only one.
Kokoda Property Group confirmed it had exercised its contractual rights to terminate existing sales at its Ruby Ruby development in Milton after reviews with its panel of experts concluded costs had escalated beyond expectations.
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Luxury developer Kokoda Property’s early renders of how Ruby Ruby would look. Picture: Supplied
Ruby Ruby is a stone’s throw from Suncorp Stadium in Milton. Image supplied.
“Following extensive review with our quantity surveyor, builder and financiers, it became clear that additional revenue must be secured for the development of Ruby Ruby to be feasible and to meet finance conditions for construction,” the company said in a statement to The Courier-Mail.
“As a result, Kokoda Property Group has exercised its contractual rights to terminate the contracts. Buyers have been offered the opportunity to secure their residence at revised pricing.”
The developer warned it was not the only one in this position, with more projects having to reassess their position.
“Legal and industry advisers have confirmed these pressures are not isolated to Ruby Ruby, with a number of developers electing not to proceed with projects due to the extent of cost escalations and the inability to secure viable finance.”
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Kokoda said “extraordinary conditions” caused the project to be revised. Image supplied.
There are two, three and penthouse options in the project. Image supplied.
The statement said “since Ruby Ruby was launched, the industry has faced extraordinary conditions including severe shortages of key construction materials, limited availability of contractors, labour constraints, unreasonable pricing practices, and the insolvency of various builders and subcontractors.”
“These issues have resulted in construction costs increasing at unanticipated and unprecedented rates, to a point where the project could not satisfy funding requirements at the existing contract sales revenues.”
The decision has left buyers facing the choice of walking away with their deposit refunded or attempting to secure their apartments again at higher revised prices, among whom were retirees Daniel and Pascale Sinclair, who paid a $257,000 deposit on a three-bedroom apartment priced at $2.6 million after selling their business last year.
The couple told 9News their contract was terminated just days before Christmas under a “sunrise clause”, which allows developers to cancel agreements if construction does not commence within a specified time frame.
The Sinclairs were then offered the chance to repurchase their apartment at a revised price of just over $3.8 million – about $1.2 million more than originally agreed.
“We bought for $2.6 million, they’re going to put it back onto the market at $4.14 million and they’re going to give us an 8 per cent discount on that,” Mr Sinclair said.
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An artist’s impression of the multi-residential project, Ruby Ruby, in the heart of Milton, Brisbane. Picture: Supplied
On Wednesday, the developer said “Kokoda Property Group remains fully committed to delivering Ruby Ruby to the high design and quality standards for which the Group is known”.
“Early works have commenced, and construction will continue once financing conditions are met.”
Queensland’s Office of Fair Trading continues to advise buyers to seek specialist legal advice before entering off-the-plan contracts, and to carefully review clauses that allow projects to be terminated if conditions are not met.
The 21-storey Ruby Ruby tower was approved by council in late 2023 and marketed as a resort-style luxury development about 2km from Brisbane’s CBD in 2024 when prices ranged from $654,000 to $2.495 million for two- and three-bedroom apartments, and penthouses priced from $3.75 million-plus. The expectation at the time was for the project to commence construction in early 2024 and complete in late 2025 – with the tower to have a rooftop infinity pool, wellness facilities, private dining and cinema spaces.
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