Brisbane's Housing Revolution: How 3-Storey Homes Could Solve Our Affordability Crisis
The dream of owning a home in Brisbane feels like it’s slipping away for many.
You see it in the weekend auction results, you hear it in conversations with friends, and you feel it in your own budget. The relentless climb of property prices and the tightening squeeze of the rental market have become defining features of our city. For first-home buyers, growing families, and even savvy investors, the question is no longer just where to buy, but how.
But what if the solution wasn’t about building further and further out, creating more urban sprawl? What if it was about building smarter, right here in the suburbs we already love? A groundbreaking proposal from the influential Grattan Institute is sparking a nationwide conversation, and it has the potential to completely reshape Brisbane’s housing landscape. The idea is simple, yet revolutionary: allow the construction of three-storey homes across our city’s residential heartland.
This isn't just another policy paper. It's a potential lifeline for thousands of Brisbanites, offering a tangible path towards more affordable housing in Brisbane. It’s an opportunity to create diverse, vibrant communities and provide the "missing middle" housing that our city desperately needs. For those looking to build, it represents a new frontier of possibility. Let's explore what this housing revolution could mean for you and for the future of Brisbane.
The Squeeze is Real: Brisbane's Housing Crisis by the Numbers
Before we look at the solution, it’s crucial to understand the scale of the problem. Brisbane is no longer the sleepy, affordable capital it once was. A perfect storm of high interstate migration, strong economic growth, and preparations for the 2032 Olympics has supercharged our property market, leaving many behind.
The statistics paint a stark picture of the affordability challenge in 2025:
- Soaring Property Prices: The median house price in Brisbane has surged past the million-dollar mark, with various reports placing it between $977,000 and $1.08 million. Even the median price for a unit is now hovering between $670,000 and $775,000. This rapid appreciation has pushed the dream of a standalone house with a backyard out of reach for an entire generation of buyers.
- Extreme Rental Stress: The rental market is arguably in an even more critical state. An astonishing 78% of Brisbane renters are experiencing financial stress, meaning they spend more than 30% of their income just to keep a roof over their heads. With vacancy rates at a critically low 0.9-1.0%, landlords hold all the cards, and finding a suitable, affordable rental has become a competitive sport.
- Mortgage Pressure: It’s not just renters feeling the pinch. Nearly 38% of mortgage holders in Brisbane are also in financial stress, grappling with higher interest rates and the sheer size of their home loans relative to their incomes.
This isn't a temporary blip; it's a structural crisis. For decades, our city has expanded outwards, but we've failed to adequately increase density in our established, well-connected suburbs. The result is a chronic undersupply of homes where people actually want to live—close to jobs, schools, public transport, and community hubs. This is the problem the Grattan Institute’s plan aims to solve head-on.
A Radical Solution: Unlocking Brisbane's Suburbs with Upzoning
The Grattan Institute’s report, "A Housing Policy Revolution," proposes a bold and decisive move to tackle the housing crisis at its source: restrictive zoning laws. For too long, these invisible rules have dictated what can be built and where, effectively putting a cap on housing supply in our most desirable areas.
The plan’s core recommendation is to overhaul these planning systems by:
- Permitting three-storey homes (like townhouses and small apartment blocks) on virtually all residential land in capital cities like Brisbane.
- Allowing six-storey apartment buildings within 800 metres of major transport hubs and town centres.
This is what planners call upzoning. It’s about allowing for slightly more density—not skyscrapers in every suburban street, but thoughtfully designed medium-density housing that can coexist with existing homes.
For Brisbane, this is particularly significant. The report highlights that three-quarters or more of residential land in Brisbane is currently zoned for buildings of two storeys or fewer. This has created a "missing middle" in our housing stock. We have sprawling single-family homes on one end and high-rise apartments in the CBD and inner-ring suburbs on the other, but very little in between. This lack of diversity pushes prices up and forces people into housing that doesn’t suit their needs or budget.
The potential impact is staggering. The Grattan Institute estimates that these changes could boost housing construction by 67,000 homes per year across Australia, leading to a 12% cut in rents and slashing over $100,000 off the average home price over a decade. It’s a plan designed to make our cities "wealthier, healthier, and more vibrant" by allowing more people to live closer to where they work and play.
Of course, such a radical idea has its critics. Concerns about infrastructure capacity—whether our existing water, sewerage, and transport systems can handle more people—are valid. However, as Real Estate Institute of NSW chief Tim McKibbin noted, "when you’re in a crisis you have to look at all available opportunities... There’s going to have to be some brave and unpopular decisions made if we are to solve the housing crisis."
Is Government Listening? Policy Shifts in Queensland and Brisbane
The good news is that this call for "brave decisions" is not falling on deaf ears. Both the Queensland Government and Brisbane City Council are already taking significant steps to address the housing supply shortage, and their initiatives align closely with the philosophy behind the Grattan Institute's proposal.
The state government's "Homes for Queenslanders" plan is a comprehensive strategy aimed at delivering more homes, faster. A key component is the ShapingSEQ 2023 regional plan, which sets ambitious housing supply targets for South East Queensland and promotes density in well-located areas. The government is backing this with a $3.1 billion investment, including a $2 billion Housing Investment Fund to fast-track social and affordable housing projects. We are already seeing the results, with thousands of new homes under construction in Brisbane suburbs like Woolloongabba, Burpengary East, and Joyner.
At the local level, Brisbane City Council's Housing Supply Action Plan is directly tackling barriers to development. A key initiative is the Housing Supply Incentive Policy, which offers significant reductions (50-75%) in infrastructure charges for eligible new developments. This is specifically designed to encourage the construction of more diverse housing types, such as smaller apartments and townhouses, which are crucial for improving affordability.
These government actions signal a clear shift in thinking. The old model of endless suburban sprawl is being replaced by a focus on smart, sustainable growth. This creates the perfect environment for the Brisbane 3-storey homes concept to flourish, moving it from a radical idea to a practical, government-supported solution.
The "Missing Middle" Advantage: Why 3-Storey Homes are a Win-Win
So, what does this "missing middle" housing actually look like, and why is it such a powerful tool for affordability? Three-storey townhouses and terrace homes offer a unique blend of benefits that cater perfectly to the needs of first-home buyers, families, and investors.
A Game-Changer for Affordability
The primary advantage of townhouse construction is its inherent cost-effectiveness. By sharing walls and building on a smaller land footprint, developers can significantly reduce construction costs compared to a traditional detached house. These savings are passed directly on to the buyer, creating a more accessible price point. Furthermore, ownership costs are often lower. The shared-wall design makes them more energy-efficient, leading to smaller utility bills, and shared maintenance responsibilities can reduce the financial burden of upkeep.
Smart, Flexible Living for Modern Families
A three-storey design offers incredible lifestyle flexibility. The vertical layout allows for a clear separation of living spaces, which is ideal for modern families. Imagine a ground floor with a garage and home office, a second floor for open-plan living and dining, and a third floor dedicated to quiet bedrooms. This layout provides privacy and functionality that a single-level home on a small lot simply can't match. It’s the perfect solution for those who need space but want the convenience and community of an established suburb.
A Golden Opportunity for Investors
For property investors, three-storey townhouses represent a strategic sweet spot. They are more affordable to acquire than a house but often generate higher rental yields than an apartment. Their broad appeal to a diverse range of tenants—from young professionals to small families and downsizers—ensures consistent demand and low vacancy rates. As Brisbane continues to grow, well-designed townhouses in desirable suburbs are poised for strong capital growth, making them a resilient and profitable addition to any investment portfolio.
Brisbane's construction trends are already leaning into this model, with a focus on high-quality, sustainable designs. New townhouse developments increasingly feature luxury finishes, subtropical architectural elements to suit our climate, and community amenities like pools and green spaces, offering a premium lifestyle at an attainable price.
Building Our Way Out: How More Townhouses Can Reshape Brisbane
Ultimately, the housing crisis is a problem of supply and demand. The solution lies in building more of the right type of homes in the right places. Allowing more Brisbane 3-storey homes to be built across the city directly addresses this challenge.
By unlocking the vast potential of our middle-ring suburbs, we can:
- Dramatically Increase Housing Supply: Releasing the handbrake of restrictive zoning would unleash a wave of "missing middle" development, quickly increasing the number of available homes and easing the intense competition among buyers and renters.
- Put Downward Pressure on Prices: Basic economics dictates that when supply increases to meet demand, prices stabilize and can even fall. This is the most effective long-term strategy for improving affordable housing in Brisbane.
- Create More Liveable Communities: Gentle density allows more people to live in established suburbs with existing infrastructure, schools, and amenities. This reduces our reliance on cars, shortens commute times, and fosters vibrant, walkable neighbourhoods where local businesses can thrive.
- Offer Greater Housing Choice: A more diverse housing stock means more options for everyone, at every stage of life. Whether you're a first-home buyer, a growing family, or an empty nester looking to downsize, a market with a healthy "missing middle" provides choices that fit your lifestyle and budget.
This isn't about turning our leafy suburbs into concrete jungles. It's about thoughtful, incremental change that adds to the character and vitality of our communities while making them accessible to more people. It’s about building a more equitable, sustainable, and prosperous future for Brisbane.
Seize the Opportunity: Build Your Future with Markon Group
The landscape of Brisbane housing is on the cusp of a revolution. The conversation started by the Grattan Institute is gaining momentum, and government policy is already moving to support smarter, denser development. This shift presents a once-in-a-generation opportunity for those ready to embrace the future of urban living.
Whether you're a first-home buyer seeking an affordable entry into the market, a family wanting a modern and spacious home in an established suburb, or an investor looking to capitalize on this city-shaping trend, the time to act is now. Don't just watch the change happen—be a part of the solution.
The experts at Markon Group specialize in designing and building custom Brisbane 3-storey homes that maximize value, style, and functionality. We understand the nuances of modern townhouse construction and are passionate about creating innovative living spaces that meet the needs of Brisbane families.
Contact us today to discuss how we can help you navigate these new opportunities and build the home of your future. Let's build a better Brisbane, together.
