For those visiting the Gold Coast for the first time, there appears to be something missing. It can take a while to put your finger on it, but unlike Sydney, Melbourne, or Brisbane, Australia’s largest non-capital city does not have a defined city centre.

Once poised to be the beating business heart of the Gold Coast, Southport’s transformation into a thriving urban hub has stalled. Despite its prime location, extensive infrastructure, and streamlined planning processes, the pace of development has been slower than anticipated, with many sites remaining undeveloped despite having approvals in place.

The Problem with Land Banking

Land banking – where developers gain approval for a project but never move ahead with it – has become a key issue in Southport. In a bid to stimulate development, Gold Coast City Council recently proposed a ‘use it or lose it’ approach, meaning developers who fail to break ground on their projects will lose their approvals.

“Land banking is blocking the growth and rejuvenation of Southport,” says Kollosche Commercial lead agent Adam Grbcic. One of the key challenges, he explains, is that existing commercial buildings are often viewed as interim solutions, with their highest and best use tied to future redevelopment.

“This makes landlords hesitant to invest heavily in upgrades, particularly when their long-term goal is redevelopment,” Adam explains. “At the same time, many leases contain a 6-12 month demolition clause, which attracts lower-quality tenants who are less inclined to invest in fit-outs, ultimately impacting the area’s vibrancy.”

A Tougher Stance on DAs

Under the current system, approvals for developments expire after five years but can be renewed indefinitely. The new proposal being considered by council would see an unused approval expire after three years, with no option for renewal, forcing projects to be resubmitted at substantial cost.

In the 12 years since Southport was granted Priority Development Area (PDA) status by the state government, billions of dollars in development have been approved but not progressed. The council’s proposed changes will form part of a revised masterplan, expected to be unveiled in the first half of the year and implemented by 2026.

The Real Barriers to Progress

While the policy aims to accelerate development, Adam believes it fails to address the core issue preventing projects from moving forward.

“It does nothing to combat the key point of resistance stopping projects from commencing, and that is financial viability,” Adam says. “Southport is positioned in a lower socio-economic area, meaning new residential projects would need to be priced at entry to mid-level price points. However, in the current construction climate, the cost to build exceeds what the units would realise upon completion. As a result, many sites are sitting idle, waiting for the market to improve and construction costs to stabilise.

“The most meaningful impact I see this policy having is reducing council workload and streamlining DA approvals, as fewer applications will be left inactive due to the three-year expiry.”

Incentives Over Penalties

Instead of penalties, Adam suggests that a more effective approach would involve targeted incentives that bridge financial gaps and support development feasibility.

“Reducing infrastructure charges, offering construction grants, or supporting specific development types like build-to-rent or affordable housing could make a real difference,” Adam suggests. “Southport needs a mix of affordable housing, projects that attract young professionals, and student accommodation. With the right policy mix and market conditions, the city can create a thriving precinct that benefits both investors and the wider community.”

Southport’s strategic location and strong infrastructure make it well-positioned for future growth. Unlocking its full potential, however, will depend on fostering a more favourable economic environment to encourage developers to act.