Addressing the Real Estate Crisis: A Closer Look at the Challenges and Opportunities

As I touched on in my previous market update, the primary cause of our current housing crisis is the lack of supply. The continually rising costs of building only compound the issue, particularly in the affordable segment of the real estate market.

In contrast, the higher end of the market tells a different story. Quite simply, buyers in this space have the financial capacity to meet the asking prices—whatever they may be. This is clearly reflected in the latest Urbis Report, which reveals that apartment prices in Australia’s largest cities jumped a record 24% in the December quarter. That’s right—24% in just one quarter. These price increases have been largely driven by construction costs, labor shortages, and a shift toward higher-quality, owner-occupier developments.

The average sale price has now soared to over $19,000 per square metre. According to Urbis, this leap is the largest seen in over a decade of data collection. Year-on-year, presale and under-construction projects across Sydney, Melbourne, Brisbane, Perth, and the Gold Coast have seen a 34% increase, with demand in Brisbane leading the charge—off-the-plan prices there surged 33% from the third quarter to $23,000 per square metre.

Urbis goes on to highlight a growing struggle in Australia’s east coast apartment market: the balance between affordability and viability. Prospective buyers are now paying up to 20% more than pre-COVID-19 levels, simply to make projects financially feasible for developers.

This underscores the issue for people who don’t have the income or savings to access high-end properties. Many can no longer afford to buy houses at all, leaving them unable to enter the property market. This is exactly where government attention needs to be focused—on how to support the affordable segment of the high-rise housing market, where demand is greatest and where support can truly make a difference for everyday Australians.

Here on the Gold Coast, one might suggest looking to the city’s outer edges for more affordable options. While this might sound reasonable, it’s just not practical for most people. The majority of work opportunities are located centrally, and people need to live within close proximity to these job markets. An hour-long commute simply isn’t a viable solution for most, especially given the limited reach of our public transport network across many housing areas.

That’s why my team and I are currently exploring build-to-rent high-rise developments in key locations. These are designed and built to meet a price point that ensures they remain accessible. They are absolutely essential if we want to provide housing for key workers—those who are vital to both the growth of our city’s economy and the delivery of essential services. I’ll share more on this initiative in the future, but for now, it’s clear where the problem lies: we are not building enough affordable apartments to meet the needs of the largest segment of our population—those who are urgently seeking a place to call home.

Before I go, I’d like to mention that we are just weeks away from this year’s Annual Business Meets Sports Lunch, taking place on Friday, 30th May at The Star Gold Coast. We’ll be joined by a leading Gold Coast sports identity, and we’re continuing our popular Local Billionaire Series. This year’s story features a former Southport High School student who ventured into real estate and rose to become one of Australia’s mining moguls. It’s a fascinating journey, full of lessons on what drives success.

Join us for an afternoon of engaging conversation, great food, good company, and a couple of drinks. Whether you’re after a single ticket, a few spots, or want to host a table of 10, details are available now. I look forward to seeing you there on the 30th of May.

Warm regards,
Andrew Bell

Andrew Bell

Andrew Bell, OAM
Chairman
The Ray White Surfers Paradise Group