Maylands $52 Million Development Under Review Amid War-Driven Cost Surges
The future of the planned $52 million Lyric Lane development in Maylands is under review, as the developer cites overnight price hikes exacerbated by the ongoing war in the Middle East. Australian Development Capital's Adam Zorzi stated that the group is evaluating options for the seven-storey mixed-use project on Eighth Avenue, where apartments have already been sold off-the-plan.
Escalating Construction Costs and Design Considerations
Mr Zorzi indicated that while some form of development is likely to proceed at the site, design changes may be necessary to mitigate rising expenses. He highlighted that developers have faced increasing pressure in recent years due to relentless building cost increases, with the Middle East conflict adding a new layer of financial strain. Specific cost pressures include a 40 per cent jump in the price of PVC pipes, essential for plumbing, which is partly derived from petroleum now in short supply.
Freight costs for materials such as bricks, steel, glass, and cabinetry have surged by over 20 per cent, as companies impose extra charges to cover heightened fuel expenses. "That's overnight increases," Mr Zorzi remarked, emphasizing the sudden impact on project budgets.
Market Competition and Government Influence
Strong local competition for labour and materials has already driven construction prices to elevated levels, with Mr Zorzi partially attributing this to State Government spending. "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, which is a major driver of costs."
He noted that Perth is unlikely to see new apartment developments commence under current cost conditions, except at the luxury end where higher construction expenses can be factored into pricing. However, in areas like Maylands, there is limited flexibility to increase product prices to offset these costs.
Industry Challenges and Proposed Solutions
Mr Zorzi called for reforms in the development industry, criticizing excessive fees and lengthy approval timeframes that contribute to overall costs. He suggested that controlled skilled migration could help address labour shortages, but warned that mishandling this could worsen housing market pressures by increasing demand in an undersupplied environment.
Project Background and Delays
ADC acquired the Eighth Avenue site in 2019 and received planning approval for the mixed-use development in 2021. Originally valued at $30 million, the project was designed to include:
- 52 apartments
- Two communal open-space areas
- Five commercial tenancies, featuring a tavern, two shops, a restaurant, and a fast-food outlet
The City of Bayswater approved minor modifications in 2022 and an extension for work to start in 2024. New design changes were endorsed last year, when the project was noted as a $52 million development. ADC failed to meet its construction schedule in the last quarter of 2025, with the project aiming to become a local landmark revitalising historic buildings in Maylands' retail and dining precinct.
As costs continue to climb, the review of Lyric Lane underscores broader challenges in the construction sector, where global conflicts and local market dynamics converge to impact urban development.
