In the latest episode of Between the Lines, Ray White’s head of research Vanessa Rader sat down with two experts deeply embedded in the Brisbane apartment block market; James Hanley from Ray White Special Projects (Qld) and buyer’s agent Nikki Carrodus from Cohen Handler, to unpack what’s driving one of the city’s most tightly held and intriguing asset classes.
Brisbane’s residential sector, they agreed, is running hot. Unit growth is leading the charge, while new residential development remains sluggish and the rental market is under immense pressure. It’s a perfect storm that has made small apartment blocks one of the most attractive investments in the city.
“Unit blocks are an incredible investment, particularly here in Brisbane,” said Nikki, who specialises in sourcing these assets for investors. “Usually they're four, six, eight or ten-pack, brick, walk-up blocks built in the 60s, 70s or 80s on big parcels of land. They’ve got great bones, solid rental potential and, importantly, they’re not heritage protected like many character homes in Brisbane. That means there’s development upside down the track.”
Vanessa agreed that the fundamentals are hard to ignore. “The rental market is very tight, so I can see why it’s so attractive for investors. These properties are tightly held and lucrative; they’re providing families with long-term income streams, and the rents being achieved are very strong.”
James Hanley described the market as “incredibly thinly traded,” adding that apartment blocks are typically held within families for generations. “They’re an intergenerational asset, often built by parents or grandparents and passed down. They’re a real trophy asset class and rarely hit the market. When they do, demand is fierce, and auctions tend to be the preferred method of sale because of that competition.”
For Nikki, her experience goes beyond brokering deals; she’s a long-time investor in this niche. “Before I was a buyer’s agent, I was actually an investor in these assets, which I still am with a consortium in Sydney,” she said. “We buy them, fix them up a little to get the yields up, then hold for a while. For example, we purchased a six-pack two years ago on a 5 per cent yield. After investing about $20,000 in improvements, we moved the yield up to 9 per cent.”
She sees three main buyer groups circling these blocks. “There are developers, there are mum-and-dad investors and there are short-term stay operators.”
James also noted a structural shift in how some investors are approaching the asset. “We’re seeing more people buy whole blocks, strata-title them, and sell the units off individually. The cost of fire safety compliance can be significant, but the premium achieved makes it worthwhile. Given how strong unit prices have grown, strata-titling can deliver a big return.”
James explained that most apartment blocks that do come to market are under-rented. “You really have to factor in the future market rent when assessing them,” he said. “On a market yield, they trade around four to five per cent, but if you look at some transactions, they might appear closer to two or three because the rents are lagging.”
He mentioned an example currently on offer: “We’ve got a block of four in Ipswich that’s a good entry point for an investor. In Brisbane metro, you generally can’t get a six-pack for under $3 million. The bigger the block, the more sophisticated the investor becomes - and there’s huge market depth between $2-5 million.”
Financing remains a quirk of the sector. “Once you get above four units, you generally need a commercial loan,” James said. “Even though these are residential in nature, lenders typically have a strong appetite for them - particularly in Brisbane. They like that tenants are easier to replace than in, say, a retail shopfront.”
For developers, holding income during the development approval phase is a major drawcard.
Nikki shared one recent success story. “We had a client purchase a five-pack in Nundah on Brisbane’s north side. It was bought three years ago for $1.4 million, given a light refresh - some new paint, window coverings - and we purchased it for $2.5 million. The previous owner did really well, but we think we got a deal because the rents are still under market. We also have a gun property manager who takes care of these assets for our clients.”
“A good property manager is a secret weapon,” Vanessa said. “They not only handle the day-to-day, but often project-manage upgrades, stay across legislative changes, and have those difficult conversations with tenants. They can make a huge difference in the long-term success of these investments.”
In a market where growth, scarcity and rental demand all converge, Brisbane’s humble walk-up unit block is proving anything but ordinary, it’s becoming one of the most sought-after plays for investors chasing both yield and long-term capital gain.
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