The reality of the nation’s serious under-supply of homes is made starkly obvious by the emergence of shortages in the location best known for bouts of major over-supply.

The Gold Coast, which traditionally has delivered weak capital growth because of regular periods of over-supply of high-rise apartments, these days has the opposite problem.

The Gold Coast has been trending towards under-supply for the past 2-3 years and it’s getting worse - and will continue to do so for the foreseeable future.

The Gold Coast has long been one of the nation’s most spectacular population growth venues and currently has a population of about 700,000 - making it the largest regional city in Australia.

It’s projected to reach a million residents within the next 20 years.

This notable history of population growth and the allowance of mega high-rise buildings has made the Gold Coast a prime target for big developers - and there have been many periods of massive construction of mega towers.

Often this has resulted in over-supply, which has taken the market years to absorb. Up until about three years ago, the median apartment price for Surfers Paradise was at the same level as a decade earlier - in other words, no capital growth for 10 years.

But that has all changed. The population growth has continued and in recent years demand has risen. The trend we call the Exodus to Affordable Lifestyle has increased demand for appealing coastal cities and the Covid lockdown period increased buyer demand for the Gold Coast.

In the meantime, the level of major new construction has declined dramatically.

Quite simply, many developers have done their sums and concluded that 40 and 50 storey apartment towers don’t stack up financially. The costs of building these structures have escalated to the point where the end price developers would have to charge to be profitable would be beyond the market’s capacity or willingness to pay.

One of Queensland’s biggest and most experienced developers told me recently they could not commit to a high-rise building unless they believed they could sell the apartments for a minimum of $1 million each.

Many big developers have decided that, with costs growing so fast, it’s difficult to budget for the cost of the development that takes years to plan and construct.

So big developers have cancelled or deferred projects.

According to a recent report by experienced Queensland property analyst Michael Matusik, for a number of years before 2021 the Gold Coast market was producing enough new dwellings to meet the demand from its rising population - indeed, a little above the required levels in some years.

But since 2021 that has changed dramatically. The line on the graph depicting supply has fallen more and more below the line representing underlying demand.

The Gold Coast market is now in severe under-supply and likely to get worse.

It’s a national problem with the Gold Coast providing a snapshot of a broader Australia-wide issue for which our elected representatives appear to have no solutions.