One of Australia's largest developers says it has paused work on a major housing estate after delays meant some contracts had to be cancelled, with buyers left out of pocket and potentially locked out of the property market.

AVID Property Group is behind the sprawling Harmony estate on Queensland's Sunshine Coast, already home to more than 7,500 residents.

The company is working on $5 billion worth of projects across Australia.

The local council ordered it to stop work earlier this year due to "unauthorised construction activities".

'Stress and financial strain' for buyers

Sunshine Coast Mayor Rosanna Natoli wrote to the developer's chief executive, Cameron Holt, amid reports of buyers being left in the dark about what was going on with the properties they had signed on to purchase.

Some were eventually told a lack of approvals meant their contracts would be cancelled and deposits refunded.

AVID hopes to have the lots ready by March next year.

"These issues have caused significant stress and financial strain due to repeated deferrals of completion dates by AVID," Ms Natoli wrote.

AVID concedes it offered pre-sale contracts on properties in stages 25 and 27 before it had secured specific development entitlements from the council.

But the company said contracts had clauses noting that development approvals were yet to be secured, which was allowed under the state legislation.

First-home buyers affected

Councillor Christian Dickson said people were promised one deadline but "those dates kept shifting".

"They're going to lose their finance from the bank, because they were told this year they'd have their lots ready in May and we're now told it's going to be March 2025," he said.

Mr Dickson said buyers might now lose the $30,000 first-home owner grant because their contract with AVID had to be cancelled due to time conditions on the incentive.

"People have been continually promised things throughout the whole life of the development and things continually push out or don't happen," he said.

Developer says it was up-front with buyers

In a statement, AVID said the contracts made clear that buyers could end the contract and have their deposit returned if the approvals took longer than 12 months.

A spokeswoman said AVID had received approvals from the water utility and informal approvals from the council, so it "had every confidence that these blocks would be registered and ready for settlement".

AVID confirms it has now "paused" future land releases as it works with the council and other authorities on approvals.

The council also claimed the property developer had made "slow progress" on delivering sewerage infrastructure for its growing estate.

"The mayor has further requested that AVID expedite all the necessary actions to resolve the sewerage infrastructure in order for releases 25 and 27 to be approved and registration of titles to occur," the company said.

The spokeswoman said AVID would work with any customer who wanted to leave the contracts so they could buy elsewhere.

Homes now further out of reach

The delays means any buyer with a refund is entering a much more expensive market.

The average cost of houses in Palmview, where the Harmony estate is being built, has gone up almost 8 per cent in the past 12 months, or added more than $50,000 to a median price of $840,000.

Across the broader Sunshine Coast, the price of housing has gone up 17 per cent in some suburbs to a median of more than $1.15 million.