Wake-up call: When Brisbane’s unit supply will dry up without urgent action

Brisbane’s apartment pipeline will dry up soon unless there’s urgent government action, with one group calling for a ban on foreign investor taxes.

The Property Council says unit supply will plummet without government intervention.

Brisbane’s apartment supply pipeline will dry up in just 18 months unless urgent government action is taken including abandoning foreign investor taxes, according to the state’s peak property industry lobby group.

Independent research commissioned by the Property Council of Australia shows without

government intervention Brisbane’s apartment supply will plummet, with projects under construction set to drop to zero after 2025.

A little under three thousand apartments are under construction in Brisbane in 2024, with that number set to drop to less than 1500 in 2025, the research shows.

“Abandoning prohibitive foreign investor taxes that continue to drive developers with a proportion of foreign ownership out of Queensland would go far,” Property Council of Australia Queensland executive director Jess Caire said.

Jess Caire, Executive Director Queensland, Property Council of Australia.

“Encouraging this investment to locate their capital in Queensland will help kickstart much-needed new apartment projects.

“These taxes add to the cost to development further challenging the feasibility of projects whilst driving out investment — regardless of how it’s sold to the public. The truth is simple, it’s a housing tax.”

Ms Caire said there was no guarantee the projects already under construction in Brisbane would be completed.

Consolidated Properties Group’s ‘Monarch Residences’ is one of the few apartment projects under construction in Brisbane.

“If all the projects under construction proceed it will only bring 4,356 dwellings to market, well short of the 7,500 attached dwellings needed for Brisbane each year according to the government’s South East Queensland Regional Plan,” she said.

“This is deeply concerning, particularly given the state government’s focus on infill to solve our housing woes.”

In a statement, Deputy Premier, Treasurer and Minister for Trade and Investment Cameron Dick called on the state opposition to rule out any reduction in taxes on foreign landholders because “under no circumstances will we cut them, as those funds are needed to pay for police and nurses.”

An artist's impression of The Prescott by Mosaic Property Group, which is one of the few apartment projects under construction in Brisbane.

Local developer Damien Cavallucci of Cavcorp said removing foreign investor taxes would be a start as it would help developers achieve higher sales targets.

“We have to reach new sales levels to match the new construction costs, so anything that will help achieve the new sales levels,” he said.

“In 2013, we were building for $200,000 per unit and selling for $400,000, now it’s $800,000 and selling for $1.6 million — same apartment.”

Luxury developer Kokoda Property has received development approval for its multi-residential project, Ruby Ruby, in the heart of Milton, but construction is yet to start.

New figures from BuildSkills Australia found the industry needs to attract an extra 90,000 tradespeople nationally in the next three months.

BuildSkills head of research Rob Sobyra said Queensland would need a proportionally higher percentage of that number than any other state because it had the strongest population growth.

“The labour shortage is still the biggest constraint facing the sector,” Mr Sobyra said.

“A lot of government projects are keeping builders going, but they’re absorbing quite a lot of resources at the moment.”

Mr Sobyra said there were “bottlenecks” in the migration system that needed to be unblocked, with construction workers making up only 1.2 per cent of the nation’s migration intake.

“Every new migrant is adding to (housing) demand, but not enough are tradies, so it’s actually exacerbating the problem.”

Mr Cavallucci said the trade shortage was making residential projects in Brisbane financially unviable.

“The only solution is that we need more young people to commence apprenticeships and learn trades,” he said.

“This will take time, and until this happens, we will have massive trade shortages and make most residential projects unviable.”

Mr Cavallucci said those tradespeople who were available chose to work on a government project over a private housing project because wages were usually higher.

“All government projects should have the same trade wages as a tradie working on a suburban townhouse project,” he said.

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