SEQ Grapples with High Risk, High Reward in Run Up to Olympics

He may be the new kid on the inner-city Brisbane block—albeit after almost four decades in the property game—but Christie Leet couldn’t have summed up the development race to the 2032 Olympics any better. “It’s a fingernails business,” he said. “Just like the Olympics at the 100 metres—you can only win by fingernails at the moment.” With that metaphor Leet perfectly captured for the 400-strong gathering at last week’s The Urban Developer 2026 Brisbane Outlook event the high‑pressure, finely balanced, easily derailed feasibility development landscape across South-East Queensland. One in which he deems affordability, settlements and delivery risk the central challenges. The prolific Gold Coast-based developer and son of a North Queensland cane farmer has skin in the game in the state’s two biggest cities and can certainly speak from experience in navigating the prevailing uncertain lay of the land. That uncertainty was underlined by the event’s keynote speaker, KPMG director of planning and infrastructure economics Terry Rawnsley. In closing his presentation, he put up a final chart “just to bang home how much uncertainty there is”. The latest Uncertainty Index for Australia showing a sharp rise in the past 12 months, he explained—prompting a chorus of chuckles—was based on, among other metrics, the number of times the word uncertainty has appeared in news articles. “Very scientific, I know,” Rawnsley said. “But you can kind of see where we’re at the moment. “People are unsure about what’s happening with the economy. People are uncertain about Donald Trump. What is he doing? What does it mean for Australia? People are uncertain about the broader Asia Pacific region, and people are uncertain about what does AI mean to our jobs?” Rising uncertainty across South-East Qld It is against this backdrop of what he described as a “pretty unprecedented” level of uncertainty, that South-East Queensland’s next development cycle—and the intensive Olympics build—will play out. But according to Rawnsley, while the latest data indicated the region was running hotter than the national average, that is both its strength and its Achilles heel. ▲ KPMG director of planning and infrastructure economics Terry Rawnsley: SEQ running hotter than national average. On the labour market front, he said SEQ’s unemployment was sitting at 3.9 per cent—“kind of below our 4 per cent sort of speed limit” below which the economy starts to overheat and push up inflation. “So that’s telling us that the challenge of finding skilled labour is tougher than the rest of the country, which means you’ve got more inflationary pressures sitting in South-East Queensland,” he said. That tight jobs market, combined with the strong but slowing growth in SEQ’s population (now nudging 4 million people), is feeding directly into rising construction costs, capacity constraints and stubborn inflation. “The Reserve Bank is trying to tap the brakes [to slow the economy]...but if you look at the various CPI components … in SEQ, they’re all pushing above the national average,” Rawnsley said. “It’ll run a bit hotter and there’s nothing the Reserve Bank can really do about that.” For developers, that means higher input costs, continued tender volatility and an elevated risk profile for project feasibilities—at the same time as underlying demand remains robust and the region confronts a multi-front building challenge. “You’ve got to build more homes … you’ve also got all that infrastructure you’ve got to build just to support that population [growth], and then you’ve got the Olympics build on top of that,” Rawnsley said. “There’ll be a lot of pencil sharpening on projects over the next few years, about how we actually try and deliver all these things at once, and it’s going to be pretty tough.” Next three years ‘more difficult’ Queensland-based builder-developer Michael McNab agreed. “The next three years are going to be more difficult—let’s be clear about it,” the McNab Group executive chairman told the event’s attendees during a panel discussion. Particularly, that is, for those developers who don’t have “deep relationships with supply chains and labour”. ▲ McNab Group executive chairma Michael McNab: The next three years are going to be more difficult. “In a pure contracting sense, the market is constrained, supply and demand is out of whack. So guess what? Our margins can be different…and that's not good for the industry.” McNab said his company’s core construction costs (labour and materials) jumped 7 to 8 per cent last calendar year, and even when working with its long-term supply and subcontract partners the increase was about 4.5 to 5 per cent. He expects continued high escalation this year, and possibly even higher the following year. “I don’t want to put a downer on anyone but that’s the reality in my view,” McNab said, quickly adding that, nevertheless, he is “very bullish as a builder and a developer” because he sees strong structural demand and believes his business is strategically positioned to outperform in a challenging market. He noted the group had locked in offshore supply chains (facade, structural steel and joinery) because “the South-East Queensland supply market’s just not big enough to deal with what’s going on at the moment”. Policy-driven demand for residential, social and affordable housing meant there was “a pipeline that’s coming for a while” and he expects continued strong growth in the industrial sector as well. But McNab said sites in SEQ remained “very hard to stack up”. “So my view, as a developer, is that we need to drive our costs differently and really change the game up quite dramatically, not just by bits and pieces.” The two-for-two market Traders in Purple Queensland development director Alex Levy said it had been an “incredibly strong” start to the year from a sales perspective for its SEQ projects. ▲ Traders in Purple Queensland development director Alex Levy: Bullish, but also super wary of what the affordability challenges may be. “We continue to see great price growth,” she said. “And I heard a new expression this week, which is we’re in a ‘two-for-two’ market—meaning that if you want a two-bedder, the prices increasingly going forward are going to have a two (millions, that is) in front of them. “So we’re bullish, but also super wary of what the affordability challenges may be going forward with depth of market. “We would love to move into something a little bit more mid market, with a greater depth. But at the moment, construction price forecasts mean that we probably will operate in that owner-occupier, higher-end band.” KPMG’s Terry Rawnsley said its data showed that while building approvals have ticked up, they remain below the levels needed to keep pace with demand, particularly in the more affordable price bands. He also highlighted the shift in approved home values toward the $900,000-$1 million bracket and above, citing that construction cost inflation had effectively pushed the traditional $600,000–$700,000 product out of reach for new supply. “And we’re not going to go back—that ship has sailed, construction prices just don’t make sense there,” he said. “The development sector has kind of gone to that higher end, higher margin, where it’s a safer bet for them to build. “If you want to get into the housing market in this country, you’ve got to drop $900,000 or a million bucks. That’s kind of your entry level whether you’re in Melbourne, Brisbane, or even regional areas.” KPMG forecasts house prices in the Queensland capital will jump a further 11 per cent in 2026 driven by strong demand and limited supply. Nationally, its data shows first homebuyer households that could once afford about 30 per cent of homes can now only access closer to 12 per cent. In Queensland, Rawnsley said it had been even more brutal—from around 60 per cent of the stock being attainable five years ago to roughly 15 per cent today. As a result, he said SEQ’s affordability advantage was starting to be eroded—particularly blunting its attractiveness for the younger interstate migrants aged 15 to 44 who have been surging north over the past few years. “The historical movements of people coming out of Melbourne and Sydney for affordability, lifestyle and cheaper housing has kind of slowed,” Rawnsley said. ▲ A rendering of Sherpa Property Group’s debut Brisbane tower, the $240-million, 27-storey Flourish Symphony. Meanwhile, just in the past few weeks, Christie Leet’s Sherpa Property Group has broken ground on its debut Brisbane tower, the $240-million, 27-storey Flourish Symphony that brings its touted affordable, multi-generational apartment living brand to the River City’s South Brisbane precinct. Leet said his strategy was not about chasing top-line revenue but hedging against a volatile market—with disciplined planning and design, tight builder partnerships and product strategy so projects can withstand market shocks. Settlement, not revenue driven “I’m not really revenue driven, I’m settlement driven,” he said, adding that he originally comes from Airlie Beach where “when the tap goes off, the tap goes off”—pointing to how quickly markets can turn. “We’ve decided that building costs are building costs. So all we can do is react to the building costs. “As a business, we’re below-the-market revenue wise,” he said. “It’s not an easy thing. You have to have an intention to do that. “And that’s one of our strategies… to enable, to the best of our ability, people to turn up on settlement day and exchange some money for some keys.” “So we spend every minute of the day thinking about that.” To that end, he has taken a step back from the high-end beachfront marketplace in Sherpa’s longstanding stomping ground of Palm Beach on the Gold Coast and moved into its neighborhood zone on the western side of the Gold Coast Highway “to really drive affordability”. Bringing Sherpa’s below-the-market strategy to Brisbane’s inner-city he conceded had been “a little bit more difficult to do… [but] has been well received”. “We press hard every day on that,” Leet said. Aside from three penthouses that will be $20,000 gross per square metre, most of Symphony’s 138 apartments are in the $15,000 to $16,000 gross per square metre range. “And that’s really good,” he said. Good enough, it seems, to declare he is actively in the market to buy another site in Brisbane. In a market where the Uncertainty Index is climbing, construction costs are elevated and Olympic‑driven demand is coming whether the system is ready or not, SEQ’s development sector is clearly up for the challenge of what is shaping as a decisive decade: high risk, high demand, and—for those who can navigate the constraints—high opportunity.

SEQ Grapples with High Risk, High Reward in Run Up to Olympics

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