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Vanishing sub-$600k units spark off-market scramble in Brisbane
Recent REA Group data showed that Brisbane’s apartment market had undergone a major shift, with zero new listings below $600k and the nation’s largest percentage of units over $1.5 million.
Pinnacle Buyers Agents founder Michael Lezaja said that while the data showed no new apartments listed in the lower price range, that didn’t mean they didn't exist; they were often just sold off-market.
“It can be hard to find that stock on online platforms because it is the kind that sells immediately or off-market,” Lezaja told Smart Property Investment.
“That is the market that always goes up because it has the most amount of active investors.”
Lezaja said investors have been increasingly turning to units, as houses tend to surge early in the cycle while apartments often deliver their growth later.
“For the first few years, people are actively buying that (well-situated house and land), and a lot of these properties grow so much that they become out of reach.”
“That’s why at the end of the cycle, you tend to see apartments perform really well, because people still want to get into the market and will just buy the next best asset that is affordable.”
Lezaja said that the clearest example of the strength of units from an investment standpoint was the Brisbane market.
“Let’s bust the myth that units don’t grow, because Brisbane units have busted that myth better than anywhere else.”
“They’ve performed incredibly well over the last few years, even outperforming houses.”
Apartments in the city have experienced significant value growth over the years, which Lezaja said was driven by a lack of supply to meet Queensland’s high levels of interstate migration and by strong infrastructure investment.
Lezaja said he expected the Brisbane market to continue growing through 2026 and saw no reason this would change, given the continued lack of supply.
“I don’t think the exodus from the southern states has come to an end. I think Queensland is still the place to be.”
“I’m still talking to people who are looking to move up here next year or after their kids finish school, or even in five years’ time.”
He said that interstate migration played a more significant role in the state’s local economy than international migration, as it often involved movers selling their assets and putting those funds into the community.
Lezaja said the majority of movers were looking to the region for its lifestyle appeal, creating a strong situation for investors to capitalise on the interest.
For investors looking to buy into a market, Lezaja said minimising competition was the strongest strategy they could employ and encouraged using a buyer's agent to find off-market properties before other interested parties.
“My job is to try and not only secure them the deal ahead of all of the other competition, but to also try and get it below market value if possible.”
“The more we avoid competition on a purchase, the better it is.”
Because of the intense competition, Lezaja said he avoids auctions whenever possible.
“I don’t like bidding against anyone that’s emotional or could be paying more than we’re prepared to pay.”
Conversely, Lezaja said that when selling an asset, vendors should aim to generate as much competition as possible, as this would lead buyers to pay more than the asset's market value.
“When you are looking to sell, you’d want to make sure it was marketed correctly, and then go to auction in a competitive environment,” Lezaja concluded.
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