Looming shortfall in medium-high density housing stock

Core Logic has released new data that supports what we’ve been reporting for over a decade, that there is a looming shortfall in medium-high density housing stock on top of an already existing housing and rental crisis.

While Core Logic reports on a broad scale across multiple property markets, we have the numbers that show just how dramatic the supply and demand imbalance is on the Sunshine Coast, with medium-density housing the most in-demand and most undersupplied. This is good news for those who have invested and can invest in property here as the competition for available property will continue to increase rents and property values. However, it’s troubling news for those looking to buy their first home or rent here.

Prefer to watch rather than read? Take a look at our video explainers inside the Sunshine Coast Property Market Update here.
We recommend watching ‘The Missing Middle’ and ‘Supply-Demand Imbalance’.

By 2043 the Sunshine Coast needs to create an additional 56,000 dwellings through infill development (building apartments, townhouses and duplexes in existing suburbs rather than building on new land releases) to meet demand according to the South East Queensland plan.

Our estimate is that only 12.5-15K will likely be completed in this time based on the current speed of delivery to market slowed by numerous constraints by local and state governments.

Even if the region miraculously doubled the output from what we expect to be feasible, there would still be a massive undersupply according to the state’s projected population forecasts. But are the state’s demand forecasts even correct?  Our research suggests not and that the forecast population number is grossly underestimated. The current modelling takes a ‘regional’ and ‘historical’ approach to forecasting population growth. As such, the Queensland Government Statisticians Office calculations are based on data that suggests that from now until 2041, every 5 years fewer people will move here than the 5 years prior.  It simply doesn’t make sense when you look at the number of ‘game-changer’ infrastructure projects and new business investments underway across the Sunshine Coast that are changing the trajectory of the region forever.

The real undersupply of property on the Sunshine Coast could be the scale of the entire city of Mackay by 2043. 

To prevent a worsening of the current housing and rental crisis, we need a rapid ramp-up of investment in the medium-high-density housing category to accommodate all the people already here and those who are coming.

This won’t undermine investors already in the market or those just entering, because the scale of the undersupply is so massive that it won’t be resolved in our lifetime – take a look at the video linked above called Supply-Demand imbalance for more on this. Property values and rents will continue to rise, but if more investors enter the market we can see win-win scenarios for investors to build wealth and for people to have places to call home.

If you’re keen to dive into the data, take a look at our current Sunshine Coast Property Market Update, specifically pages 36-46 to see all the projections for supply, demand and the property types needed.

If you’d prefer to talk to someone about how all this insight can apply to your specific circumstances and investment opportunities, then please reach out to our property coaches for a free strategy session.