When Governments Don’t Pull Together, And Why Housing Supply Keeps Lagging

Australia’s housing challenge isn’t just about demand, it’s about decision-making that doesn’t line up.

Across federal, state and local government, policies are often developed in isolation, priorities shift, and responsibility is routinely passed around. The result is delay, confusion, and supply that continues to fall well short of what’s required.

For residential property investors, this matters deeply. Because when governments don’t work together, housing doesn’t get delivered at the pace the market needs and this unfortunate outcome creates significant opportunity. 

Aura South: A Necessary Option Back on the Table

On the Sunshine Coast, there has been a meaningful and welcome shift.

Aura South (the Caloundra South Urban Development Area) is out for public consultation under a Public Environmental Report. This is a significant step, and one we’re glad to see on the table.

The Caloundra South UDA has long been identified as a logical location for large-scale housing delivery. It sits within an existing growth corridor, with established planning frameworks, proximity to infrastructure, employment and services, and the scale required to actually move the needle on supply.

For some time, Sunshine Coast Council have been against this potential development pushing a different agenda, favouring alternatives that, while politically appealing, were far more complex, slower to prepare and unlikely to deliver housing in the near term. In a recent article the Council ‘source’ response appears to show a softening in their approach – our hope is that there is a growing recognition that pragmatism matters, and that housing-ready land must take priority if we’re serious about addressing shortages. 

It’s prudent to point out the resistance to Aura as a development, the largest master planned community in Australia’s history and delivering 10 years ahead of schedule while still not denting the undersupply was actively fought against by the Council of the time. It had to be called in by the State and is now delivered under their approval process, not that of the local government. 

Aura South is not a silver bullet, but it is realistic, achievable, and necessary.

The State Steps In But Alignment Still Matters

We’ve also seen the Queensland State Government take decisive action recently, approving the Coochin Creek Tourist Park using ministerial call-in powers after prolonged delays at a local level.

We agree with the approval. Not because process doesn’t matter, but because inaction has consequences.

While Council processes are important, they have increasingly become slow and reactive, often shaped by loud minority opposition rather than broader regional needs. In an environment of acute housing and accommodation pressure, waiting years for consensus simply isn’t viable.

That said, this isn’t about the State being “the hero”. While the approval was a positive step, it also highlights a deeper issue: governments stepping in because systems aren’t working together as they should.

Decisive action shouldn’t require override powers, it should come from aligned planning, shared objectives, and clear accountability across all levels of government.

The Federal Layer: Influence Without Coordination

At a national level, the challenge becomes even more complex.

The Federal Government doesn’t control local planning approvals, but it exerts enormous influence through funding, taxation settings and population policy. Too often, that influence has added confusion rather than clarity.

Billions have been allocated to housing initiatives, from future funds to rental relief and crisis pledges, yet delivery remains slow and outcomes opaque. Tax settings that directly affect investor confidence, such as negative gearing and capital gains tax, continue to be treated as political tools rather than components of a long-term housing strategy. The result is policy uncertainty and sentiment whiplash.

Most critically, the Federal Government controls immigration. Record levels of population growth have been introduced at precisely the same time housing supply has been constrained by planning delays and construction bottlenecks. Demand has been accelerated without corresponding coordination on supply.

Responsibility is routinely pushed down to states and councils, without the funding models, infrastructure mechanisms or regulatory clarity required to act in a coordinated way. The missed opportunity isn’t just what hasn’t been done, it’s what has been allowed to persist.

What This Means for Investors

Across all levels of government, the pattern is clear:

• Decisions are fragmented
• Timelines are stretched
• Supply remains well below demand

While there are encouraging signs: Aura South moving forward, state intervention where needed, the system as a whole still lacks cohesion.

That’s why understanding where real progress is happening, and where it isn’t, matters more than ever.

Behind the scenes, we’re closely involved in these conversations, tracking which projects are genuinely viable, where bottlenecks remain, and how shifting policy settings affect delivery timelines and market pressure. This forward looking research has allowed us to deliver predictions with incredible accuracy while targeting opportunities for our clients that create real, positive, and sometimes (often, usually) life changing outcomes. 

For residential property investors, this environment rewards strategy, selectivity and informed decision-making, and our research and property targeting and sourcing is the glue to maximising this knowledge to form a personalised strategy. 

If you’d like to understand how these changes affect your position and what opportunities still exist despite the noise, we invite you to book a strategy session and explore what’s possible.

Because while governments may move at different speeds, the fundamentals remain unchanged and those who understand them are best placed to act.