In a bold move that could reshape Adelaide's skyline, the South Australian government has unveiled a groundbreaking apartment construction scheme, just ahead of the 2026 election. But here's where it gets controversial: the plan involves a $500 million financial guarantee to boost mid-tier apartment development, but only if the units fail to sell. Could this be the game-changer Adelaide needs, or is it a risky gamble with taxpayer money? Let’s dive in.
The government’s proposal aims to reignite apartment construction in the city’s CBD by acting as a safety net for developers. Premier Peter Malinauskas explained, “We’re essentially stepping in as a guarantor. Developers build and sell the apartments, and our guarantee is only activated if those sales fall through.” If an apartment doesn’t sell, the government can acquire it at a 10% discount below market value. This approach, Malinauskas argues, addresses the market’s reluctance to finance projects without pre-sales—a major hurdle for over 2,400 approved but unbuilt apartments in the CBD.
And this is the part most people miss: the scheme targets apartments priced under $1 million, with the goal of making housing more affordable for working professionals. “Nurses, police officers, and other key workers shouldn’t be priced out of living in the city,” Malinauskas emphasized. But is $1 million truly affordable? That’s a question sparking debate.
The Property Council of Australia (PCA) has thrown its weight behind the plan, with board member Nick Emmett calling it a “great enabler for supply.” He believes it will accelerate CBD apartment construction, addressing the current market failure. However, opposition housing spokesperson Michelle Lensink isn’t convinced. She questions the scheme’s cost-effectiveness and whether $1 million apartments can genuinely be considered affordable for young buyers.
Prominent developer Theo Maras, however, sees the scheme as a win-win. He argues it will restore confidence in apartment development while strengthening the CBD’s residential population. “A city without people living in it isn’t viable,” Maras pointed out, highlighting Adelaide’s population decline from 75,000 to 35,000 over the past 70 years.
Here’s the burning question: Is this scheme a bold solution to Adelaide’s housing crisis, or a costly experiment with uncertain returns? And what does ‘affordable’ really mean in today’s market? Let us know your thoughts in the comments—this is one debate you won’t want to miss!
