Blocks of flats have become a popular investment category during the pandemic, particularly in southeast Queensland with Brisbane experiencing one of the tightest rental markets nation-wide.
A property located at 50 Bess Street, Windsor sold for $2,410,000 at auction — 25 per cent above reserve — a great result for the vendor and Ray White Special projects principal Matthew Fritzsche and associate director Andrew Burke.
The 885sqm site comprises four two-bedroom flats and two one-bedroom flats and is development approved for a four-lot subdivision with freehold title houses.
The property received a lot of interest, with 150 enquiries prior to auction, and 10 registered bidders on the day.
Mr Burke said there had been a real surge in interest in this kind of property — a cross between a residential and commercial asset.
“The record low interest rate environment has driven a significant compression of yields through 2021 for residential and commercial investments, with substantial free capital in the market seeking low risk investment alternatives to bank returns or residential houses,” Mr Burke said.
“Flats and boarding houses tend to transact in the sub-$5 million category and therefore are highly sought after by ‘Mum and Dad’ or first time investors.”
Mr Burke said blocks of flats had recently become a very popular target for interstate investors looking for a foothold in the Brisbane market, stimulated by the 2032 Olympics bid announcement.
“Blocks of flats as an investment class are seeing benefit from Brisbane having one of the tightest rental markets nationwide, with a vacancy rate of 1.30 per cent recorded for May 2021,” he said.
“This is expected to tighten further as southeast Queensland continues to be the country’s major beneficiary of interstate migration.”