We Can't Solve the Gold Coast's Housing Challenge by Doing More of the Same

We can't solve the Gold Coast's housing challenge by doing more of the same.

That was at the heart of the Gold Coast Central Chamber of Commerce Property Forum last Friday.

I had the privilege of organising the event on behalf of the Chamber, with the support of our Board, bringing together a panel that could genuinely challenge how we think about the next phase of growth on the Gold Coast.

And with 300+ developers, business leaders and property professionals in a packed room, there was clearly an appetite for the conversation.

The event was framed around a major question:

How does the Gold Coast accommodate its growth toward a population of one million, particularly as we head toward the Brisbane 2032 Olympic and Paralympic Games?

Mayor Tom Tate opened the afternoon and Assistant Minister Rebecca Young also provided an overview, giving the room important government context before we moved into the industry discussion.

Our MC, Jack Corbett, brought an important practitioner's perspective of his own. As a developer involved in delivering around 200 homes annually, Jack knew where to challenge the panel, push the discussion further and get the most out of the afternoon.

Our panel brought together Adrian Puljich, Michael Matusik, Drew Bowie, Michael McNab and Andrew Gray, each bringing a different perspective to one of the biggest challenges facing the Gold Coast and Australia more broadly: how we actually deliver enough housing.

The Issues Are Interconnected

Because the issues are interconnected.

• Construction costs remain high.
• Productivity remains at very low levels.
• Labour and materials remain expensive.
• Finance is becoming more selective.
• And buyer and investor sentiment is being tested.

If a Project Cannot Attract Funding, It Does Not Get Built

Drew Bowie made one of the most important points of the afternoon.

A project can have a great site, strong demand and sound fundamentals — but if it cannot attract funding, it does not get built.

Capital is becoming increasingly competitive.

A Gold Coast project may be competing for funding not only with another development down the road, but with projects in Brisbane, Sydney, Melbourne, Perth or elsewhere.

Drew also cautioned that the market is likely to be challenging over the next few years.

And when you look at the ingredients already in place, it is easy to understand why.

• Higher construction costs.
• Weak productivity.
• More expensive capital.
• Greater scrutiny from lenders.
• Changing investor settings.
• Pressure on affordability.
• And uncertainty around where property prices and demand settle.

Individually, each is manageable.

Together, they create a much more difficult development environment.

That Makes Innovation Even More Important

We explored modular construction, backyard and smaller homes, shared-housing models, alternative forms of density, vertical communities and better use of the land and infrastructure we already have.

But even some of the solutions bring new challenges.

Modular construction manufactured offshore, including in China, may offer cost and delivery advantages, yet funding can be difficult because only a limited number of lenders are currently comfortable financing materials and components before they arrive on the Australian building site.

What Does It Really Cost to Deliver a New Home?

We also had a great debate around what it really costs to deliver a new home today.

The proposition was that it is extremely difficult to deliver one for much below $750,000.

Michael Matusik challenged that, arguing it can be done closer to $650,000.

That is exactly the sort of constructive disagreement we wanted.

Adrian Puljich also shared a very different approach to housing and community development, including GemLife's move toward vertical communities, with the first being developed at Currumbin.

The Takeaway

The takeaway for me was simple.

House prices can fall and we can still have a housing affordability and supply problem.

If construction costs remain high, productivity remains low and otherwise viable projects cannot secure capital, new supply will remain difficult to deliver.

As a Board member of the Gold Coast Central Chamber of Commerce, I was proud to bring this event together and see such a strong cross-section of government, property and business leaders engaging seriously with these questions.

The Gold Coast's growth is coming.

The next few years may be challenging, but that makes it even more important that we finance, design and deliver housing differently.