Chinese wall: How a half-finished residential lot in Ascot contains a twist to the ongoing housing crisis

The saga surrounding a stalled development in one of Brisbane’s most prestigious suburbs has embroiled everyone from disappointed homebuyers to the Chinese government, writes David Fagan

Jul 02, 2024, updated Jul 02, 2024

Rising tension over the stalled development of more than 200 new homes in one of Brisbane’s ritziest suburbs is about to boil over.

It will set aspiring residents of the Aurora Ascot estate against a secretive developer ultimately controlled by the Chinese Government. The federal government also has a role in the emerging row.

At stake are 234 sold or partly completed homes just 7 km from the city centre, adjacent to a rail station but on a fenced-in construction site, abandoned except for security guards safeguarding it from vagrants and thieves stripping it of building materials.

This is yet another face of the housing crisis confronting Queensland where skills shortages and skyrocketing materials costs are hurting across the community – from those who can’t afford, let alone secure, a roof over their heads to million-dollar-plus home buyers stranded by the financial collapse of builders.

Aurora Ascot is not yet a profile issue for any level of government – as obsessed as they rightly are about housing shortages – and has attracted little attention even though it has left its purchasers in limbo. Right now, they are either waiting for their dream homes to be built or the developer, Poly Developments, to honour their contracts’ sunset clause which at least allows a refund of their deposits.

This development should be the textbook example of what Lord Mayor Adrian Schrinner talks about when encouraging residential infill development of underused Brisbane sites. But the collapse of the builder, GCB Constructions, two years ago makes it just the opposite.

Buyers are airing their frustrations on a Facebook site set up by one of them. Principal frustration is the reticence of the developer to update them on what is happening with what they had hoped would be their future homes in a master-planned medium density community.

After almost two years of silence and 48 hours after InQueensland approached it for clarification, the developer last night emailed purchasers a letter, blaming the delays on building industry conditions, dismissing the likelihood of the coming legal action and offering to negotiate contract buyouts individually. It also assured that it was continuing to search for a builder to complete the project.

But there are other worries for the purchasers: partly built and unprotected town houses exposed to the weather subject to mildew, steel framing vulnerable to rust, fittings being stolen and the reality that a new builder (if one can be found after two years) will demand a higher price which will be passed through to the buyers.

These concerns will be tested when the first of the five-year sunset clauses on 2019 purchase contracts comes into play shortly. There is widespread belief among owners, fuelled by silence from the developer, that deposits will simply be refunded only when they have to be, that the project will be rethought and the homes will be put back on the market for vastly more than their original purchase price.

Some buyers say they have have been told by agents for the developer that it will consider an early release of deposits so long as they meet the legal and administrative costs.

The Aurora builder, GCB Constructions, collapsed with debts of more than $50 million in 2022 amid litigation with Poly over design changes to the development. They allegedly added to the unbudgeted costs that contributed to dragging the business under.

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An interesting by-product of this – and another pressure point – is the involvement of the federal government which has paid out $1.7 million in entitlements to GCB’s terminated employees and is now lining up to fund the liquidator, David Stimpson of SV Liquidators, to continue the litigation in the Supreme Court.

Underlying all of this is a concern about the financial state of Poly, the Australian subsidiary of one of the largest businesses in China’s development sector which is under widely acknowledged pressure.

The global investment website, Simply Wall St, says Poly’s debt levels cast a shadow over the business “like a colossus towering over mere mortals”.

While its security may be underwritten by its major shareholder the Chinese Government, its flexibility in finishing projects will be limited. Poly has publicly acknowledged it is pulling back in Australia but the purchasers of Aurora Ascot have no direct knowledge of what this means for their investment.

The picture Poly and its agents painted of Aurora was truly attractive when it went to market in 2019 – 214 townhouses, 10 freestanding houses and 15 apartments across 6ha of “public parks, a community garden, an outdoor swimming pool, BBQ, entertainment facilities and mindful pedestrian networks (providing) an open and socially connected environment”.

But then Covid happened, building costs exploded and now the entire Chinese development sector is under pressure.

While this, on one level, is a dispute between 200-plus disappointed home buyers in Ascot, a developer and builder, it has a flow-on effect. Completion of the project would not only satisfy the hopes and dreams of those who have pinned their future to Aurora, but would free up another 200 homes or apartments for rent or sale in the tight and ever tightening Brisbane housing market.

InQueensland approached Poly and its representatives multiple times since Friday for clarification of what the future holds but has met the same silence that has, until last night, greeted the purchasers of Aurora.

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