New research has highlighted a potential solution to problems that have brought the Gold Coast property sector to crisis.

Across the Gold Coast, high construction costs and a lack of Tier 1 builders have slowed new projects dramatically. As a result, the number of new apartments coming to market is only a fraction of what is needed to meet a burgeoning population and the South East Queensland Regional Plan targets.

Under the plan, established to ease the region’s housing crisis, a goal has been set to deliver 100,254 apartments in towers of nine storeys or more by 2046, or 4,010 more apartments every year. It’s a big ask and one that seems highly unlikely if current conditions persist.

Among the developments that are breaking ground few, if any, cater for the entry level or mid-range buyers. It is predominantly within the luxury apartment sector where projects are reaching margins that stack up financially.

According to Adam Grbcic, commercial sales agent at Kollosche, there are very few projects proceeding because of the difficulty to price a build or obtain a builder, with the sheer size of some projects creating too great a risk.

But what if there was a way to mitigate the risk of construction costs, increase the pool of builders and create supply that is more attainable by the average homebuyer, while also presenting a compelling case for investment?

Achieving this may indeed be possible, according to data and analysis contained in recent K Property Insight reports, produced by Kollosche in conjunction with expert industry analyst Michael Matusik.

Adam says the research, as well as on-the-ground intel, has made it clear that either alternative or lower-density schemes on current sites that reduce the number of basement levels required will drastically increase their viability.

“This means that these developments will scale down from high to medium-rise [less than 12 storeys] which will also increase the number of building companies able to take projects on,” he says.

“This will likely see developments move further from the premium locations, such as the beachline.

“It will also reduce the presales required to satisfy financiers, which means sooner commencement for projects.”

A lower barrier to entry on the apartment value means the pool of potential purchasers and investors will widen to include those previously priced out of the Gold Coast market, Adam says.

“Depending on site value and when it was purchased, it’s a way forward for developers to consider and an option they could pivot towards relatively easily,” he says.

“I think you will see more developers consider secondary sites because there’s high demand which needs to be filled.

“There is more than just the luxury high-rise market – there’s low and medium too.

“There is still a demand for high-end projects, but maybe we will see new precincts created through secondary sites.”