Consolidated Properties boss Don O’Rorke says the time is ripe for apartment development

The numbers add up for a new wave of apartment development in South East Queensland, and the creation of quality new homes for thousands of people should not be compromised because of lack of Government action, writes Don O’Rorke.

Covid has been the cause for one of the great disruptions of the last century. A confluence of severe factors such as pandemic, war, fire, flood, inflation, hyper fiscal intervention, and lockdowns have completely distorted what was the norm up to 2020.

Brisbane has been one of the winners out of this period, evidenced by people from around Australia and across the world wanting to move here because of the combination of climate, living conditions, and employment opportunities.

The allure of Brisbane has also been magnified by the 2032 Olympics and Paralympics.

In 2022, the Queensland population increased by over 116,000 people, with immigration accounting for over 92,000 and is forecast to increase by a further 2.2 million by 2046, all of whom must be housed, in a very tight rental market running at about 1 per cent vacancies. The Southeast will be the primary benefactor of this growth with Brisbane growing at the highest rate of the major capitals.

But why the case for apartments?

Apartments in the Brisbane suburb of West End. Picture: David Clark

The average price of houses in Southeast Queensland has grown at 9.5 per cent over the past 12 months, whereas apartments have only grown at 5.1 per cent, creating one of the biggest gaps between these two accommodation types in history.

Construction costs for apartments have risen by 45 per cent since 2020, meaning supply of new apartments has been severely curtailed. The supply of houses has not been similarly constrained in Greater Brisbane, as the well-publicised massive building of houses occurred during Covid.

The apartment supply has been further hampered by rampant builder insolvencies, leading to a significant lack of capacity to deliver the demand.

High demand coupled with high replacement costs has created the driver for above trend price and rental growth for both existing and new apartments. There is no reason to believe this growth will not continue given the demand and supply imbalance.

There is no doubt Australia’s housing and apartment markets are expensive, and will not get any cheaper.

The only way to arrest continuing high price increases is to supply the market with more land to allow more homes to be produced. Also make the approval system efficient, so that costs can be contained. The quality of our homes cannot be compromised because of lack of Government action. The industry is calling on all three levels of Government to address supply and planning efficiency immediately.

Don O’Rorke is the chief executive and chairman of Consolidated Properties Group