Qld’s phantom homes: The hidden crisis of unbuilt housing projects

An empty site in Surfers Paradise earmarked for an apartment development. Picture Glenn Hampson

Thousands of planned Queensland homes have been abandoned by developers, part of a nationwide ‘phantom approvals’ crisis adding pressure to an already strained housing market.

About one in six approved apartments had not yet commenced construction two years later, Australian Bureau of Statistics figures show, blocking development pipelines across Brisbane, Sydney and Melbourne as surging costs make projects unviable.

By contrast, about 95 per cent of approved free-standing houses were built.

Among recently shelved projects, a $180m South Brisbane tower was scrapped after builder Descon went into receivership.

Design renders for a South Brisbane a site for sale with development approval after the project went into receivership.

The Merivale St site of Tallis Property Group’s planned 30-storey building, named Akin, is now for sale by Colliers.

It follows the 2023 sale of a Toowong site earmarked for the failed $450m Aviary mixed-use project, purchased by IJ Capital for $53m.

Meanwhile, Spring Hill venture Oria by Keylin has been resurrected after being put on ice in 2023, with revised plans for 132 apartments priced from $1.2m listed for sale this month.

On the Gold Coast, Daydream Property’s Alegria tower and Central Equity’s Pacific One towers were both shelved, with the latter returning to the drawing board and announcing new cost-cutting plans for the skyscraper this month.

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And Melbourne rich lister Tim Gurner’s $1.75b Budds Beach project La Pelago has stalled amid difficulties securing a builder despite $350m in pre-sales since its 2022 launch.

A spokesperson for the Gurner Group said they were “currently working through construction pricing” for the project, aiming to start early 2026.

Also hopeful for a start despite a four-year delay, SPG Land’s massive Paradiso Place in Surfers Paradise has been re-designed with two extra storeys and a more modest pool deck to boost profitability.

Developer Rob Gray, of Graya, said delivery times had ballooned to five years for developers without an internal construction arm or established industry connections.

Graya founders Rob and Andrew Gray onsite at Palm Beach as construction of Kloud gets underway

He said developers faced material price hikes, labour shortages, red tape, and financing difficulties as banks demanded greater pre-sale levels.

“There are many reasons to stop a project going ahead, but in 2025 the biggest one by far is construction costs,” Mr Gray said.

“It is just getting more and more expensive, which then makes it a lot less feasible to go through the pain and risk of a development for not much reward on the other end.

“The only ones that are actually getting off the ground these days are medium-scale or larger developments.”

Artist’s impression Aviary, another Brisbane project abandoned by the developer

SuburbTrends analysis shows a dramatic slowing in residential construction, with Queensland completions down 25 per cent from 2017.

A report by MCG Quantity Surveyors shows dwelling completions in Queensland peaked at 18,148 units in the third quarter of 2017, falling to 13,721 for the year 2023.

Latest data shows 9,604 units were completed in the last quarter of 2024.

MCG director Mike Mortlock said the housing pipeline had failed to keep pace with surging population growth.

Net overseas migration rebounded to over 500,000 last year, yet national completions were stuck near 175,000 – levels last seen 10 years ago.

MCG Quantity Surveyors director Mike Mortlock

“It’s a pretty dire situation,” Mr Mortlock said. “We don’t just have a supply problem. We have a project pipeline conversion problem.”

Mr Mortlock said dwindling completions rates had fuelled rent rises and soaring property prices, with the affordability squeeze worse in growth belts including Logan-Beaudesert, where approvals fell over four straight quarters, along with Morton Bay South, Strathpine and North Lakes.

“We already know when looking at approvals that we are not even close to where we need to be to meet the national target of 1.2m new homes in five years, but when you look at completions it’s even worse,” Mr Mortlock said.

“Units have a bigger part to play in addressing the affordability problem. We need unit construction to be outperforming targets. The reality is the opposite.”

Development sites left deserted, years after project approval

SuburbTrends founder Kent Lardner said the data matched every building approval lodged since July 2021 against commencements and completions two years later. It revealed median unit build times had increased about 50 per cent over the past five years, from about 15 to more than 18 months.

“Elongated construction times mean even a healthy approval pipeline delivers dwellings more slowly than a decade ago,” Mr Lardner said.

Housing Industry Association (HIA) chief economist Tim Reardon dubbed the rising number of apartment projects unlikely to ever materialise “phantom approvals”.

“We are commencing half the number of units as a decade ago and there is no indication they are going to pick up,” Mr Reardon said.

HIA Chief Economist Tim Reardon. Picture: Tertius Pickard

Escalating building and tax costs pushed new apartment prices to levels the market won’t pay, he said.

“Few households are willing to pay the [premium] for a new unit when established units are so much cheaper,” he said.

Increased taxes on foreign investment had backfired, forcing builders to finance domestically, while a tighter lending environment following 13 successive interest rate hikes between 2022 and 2023 exacerbated the issue, Mr Mortlock said.

Queensland’s soaring land values lured interstate developers, according to Mr Gray.

“A lot of these developers are then looking at all the risks and headaches and just selling their sites,” he said.

“Looking at the way land prices have gone up, they are still ahead because there has been such great uplift in the land,” he said.

Keylin’s Oria development at Spring Hill was resurrected with revised plans to offset soaring costs

A recent uptick in national apartment approvals was skewered by developers seeking re-approval for older housing projects.

The MCG report detailed a boom-and-bust cycle in national residential dwelling completions over the past 25 years, with completions peaking around 2016-18.

Construction surged through the mid-2010s, particularly for apartments, with completions peaking around 2016-2018.

– With Aidan Devine

The post Qld’s phantom homes: The hidden crisis of unbuilt housing projects appeared first on realestate.com.au.