Queensland property in focus: supply pressures, macro forces, and what the Brisbane 2032 Olympic and Paralympic Games mean for industry
Insights from the Westpac Women in Property Luncheon, Brisbane.
Key takeaways
- While Brisbane LGA is experiencing rapid growth, constrained housing supply, driven by high construction costs and labour shortages, remains the central challenge across Queensland’s residential market.
- Economic uncertainty is reshaping investment behaviour, with capital increasingly gravitating towards defensive, long term assets.
- Brisbane 2032 Olympic and Paralympic Games presents a significant opportunity for the property industry, but benefits will require careful planning and a long term legacy focus.
Female leaders from across Queensland’s property sector came together in Brisbane for the Westpac Women in Property Luncheon, sharing insights on the forces shaping the industry and the opportunities of hosting the 2032 Olympic and Paralympic Games.
The event featured a keynote address from Antonia Mercorella, Chief Executive Officer of the Real Estate Institute of Queensland (REIQ), followed by a panel discussion with Sarah Urquhart, Property Risk Manager at Westpac, Caitlin Shields, Partner and Quantity Surveyor at Mitchell Brandtman, and Penelope Layton, Director of Masterplanning and Place at Lendlease.
Across the discussion, several clear themes emerged, many of which continue to define Queensland’s property outlook.
Brisbane is growing fast, but facing mounting housing pressures
Brisbane continues to grow rapidly, but housing supply is struggling to keep pace. Strong population growth has collided with rising construction and financing costs, placing sustained pressure on prices, rents and vacancy rates across the residential market.
While demand from owner-occupiers, first home buyers and investors has remained resilient, new supply, has struggled to keep pace, placing ongoing pressure on prices, rents and vacancy rates. Although building approvals have lifted, activity is still well below the level required to meet housing targets under the National Housing Accord. Rental markets are particularly tight, with vacancy rates well below 1 per cent in many regions.
As REIQ CEO Antonia Mercorella put it, the challenge is structural rather than cyclical, with affordability and rental pressures unlikely to ease until supply constraints are addressed at scale. “Queensland’s housing challenge isn’t a lack of demand; it’s a lack of supply. Until we close that gap, pressure on affordability and rentals will persist,” she said.
Beyond affordability, Mercorella, highlighted the pace of Brisbane’s structural shift relative to other capitals. “Brisbane LGA has moved in a northerly direction at a pretty rapid pace. We’re now more expensive than Melbourne, and if the trajectory continues - that is, extrapolating out the very same growth rates - it’s not insurmountable for Brisbane to overtake Sydney.” she said.
Macro uncertainty reshaping investment decisions
Beyond residential fundamentals, broader economic conditions are increasingly influencing how investors approach property.
The panellists discussed how ongoing geopolitical uncertainty, higher interest rates and slower economic growth have tempered risk appetite, while capital availability remains strong. From a consumer investment perspective, the shift has been less about whether capital is available, and more about where it is prepared to deploy.
“There’s still a significant amount of money that needs to find a home,” said Westpac Property Risk Manager, Sarah Urquhart. “What’s changed is where that capital is willing to go.”
Investors are becoming far more selective, prioritising defensive assets with long-dated income streams and strong fundamentals.
Living sectors, including residential, aged care, retirement living and medical assets, continue to attract interest, alongside neighbourhood and convenience-based retail.
There is also growing momentum in so called “tough tech” assets, such as data centres and advanced manufacturing facilities, which sit between property and infrastructure and are becoming increasingly important to economic transformation.
At the same time, a divide between prime and secondary assets is widening. Properties with shorter leases or uncertain income streams are proving harder to price, reinforcing a more asset specific approach to investment.
Construction feasibility: cost, labour and timing
On the delivery side, many projects are still moving forward, but feasibility remains highly sensitive to project type, cost pressures and labour availability.
Shorter duration projects, including civil subdivisions and single dwelling developments, are generally stacking up, provided valuations keep pace with rising costs. Industrial and warehouse developments also continue to progress.
Higher density residential projects, particularly those targeting affordability, remain more challenging. Labour shortages, volatile input costs and contractor risk pricing are weighing on feasibility across the pipeline.
As Mitchell Brandtman’s Caitlin Shields explained, while construction cost escalation has eased slightly with it still tracking at around 6-8 per cent per annum, for the next 12 months, underlying pressures remain - particularly around timing and labour as the Games approach. We anticipate a sharper escalation after this time.
“It’s the storm before the calm – a lot of people want to get developments in and done before the looming Olympics comes in and activity ramps up around that,” Shields said.
With major infrastructure projects accelerating, competition for skilled labour is expected to intensify across residential and commercial pipelines alike, increasing feasibility risk for projects that delay decision-making.
Brisbane 2032 Olympics and Paralympics – opportunity and complexity
The Brisbane 2032 Olympic and Paralympic Games loom large - offering both a once in a generation opportunity and a complex delivery challenge for the property sector.
From a city shaping perspective, the Games are already accelerating long term urban renewal projects, with major precincts and enabling infrastructure set to influence Brisbane’s growth well beyond 2032.
According to Lendlease Director of Masterplanning and Place Penelope Layton, the Games are reinforcing a shift in how cities think about long-term value creation. A strong focus on legacy, ensuring assets remain functional, productive and valuable after the Games, is central to current planning.
Timing, however, remains critical. Despite the perception of a long runway, productivity constraints mean the effective window for projects to commence with confidence is narrowing. Many developers are seeking to move early to manage escalating costs and labour competition.
For landholders with undeveloped sites, rising holding costs and financing pressures are also increasing the likelihood of difficult decisions in the years ahead.
What this means for the industry:
- Supply constraints will continue to shape housing outcomes across Queensland until material delivery capacity improves.
- Capital remains available, but increasingly favours defensive, high-quality assets with clear income certainty.
- Construction costs and labour availability remain the key pinch points for feasibility.
- Brisbane 2032 is a powerful catalyst, but not a cure-all, requiring coordination, productivity improvements and long-term planning to realise its full potential.
- There are broader social implications of housing stress, particularly for older women. Women over 55 are the fastest growing demographic of people experiencing homelessness in Australia.
Looking ahead, the property sector is navigating a mix of structural challenges and emerging opportunities. Market conditions remain uneven, with outcomes increasingly influenced by asset quality, location and execution. At the same time, longer term fundamentals and major catalysts such as Brisbane 2032 could help drive innovation and lift productivity across the sector over time.
If you’re interested in exploring how these trends could affect your business, please get in touch.
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