The separation of Australian housing production from its consumption has long-term consequences for sustainability in the built environment, and for anticipatory adaptation to climate change. This article investigates how the institutional structure of the Australian private housing development industry influences its risk profile and its ability to innovate, particularly in the type of housing produced. Consumers on the other hand are reluctant to invest in climate-adapted housing, particularly if adaptive products are costlier. Using the results of a multi-method study, including a questionnaire survey and a series of interviews and focus groups, the broader issue of sustainability in housing development is revealed. The article highlights the complex and diverse structure of the various players in the development industry, and shows how their position within the broader structure of the housing and financial market influences their adaptive capacity.