Houses Aren’t Always the Better Investment

What Brisbane’s data reveals about the Sunshine Coast and why the market is shifting beneath us

For years, one of the most repeated lines in Australian property has been:

“Houses outperform units.”

It’s simple. It’s comfortable. And increasingly, it’s being challenged by the data.

Recent analysis from Tim Lawless at CoreLogic (via their stratified Housing Value Index) breaks the market into price quartiles not just a single median. And what it shows, particularly in Brisbane, is something we’ve been talking about for some time:

The strongest growth is not always at the top end of the market. It’s often at the most accessible end.

While the report focuses on Capital Cities, in considering Brisbane, the implications are also highly relevant to the Sunshine Coast, where many of the same structural pressures are not only present, but amplified.

The Median Problem: Why We’ve Been Looking at the Market the Wrong Way

The median price has long been treated as the scoreboard of the property market. But it’s a blunt instrument.

It tells us what sits in the middle of all transactions,  not what is actually performing, not where demand is deepest, and certainly not where future pressure is building. (See more here and here)

On the Sunshine Coast, this distortion is even more pronounced. A handful of premium sales (waterfront homes, prestige stock, lifestyle acreage) can shift the median significantly, creating the illusion of broad-based growth. But that doesn’t reflect how most of the market is behaving.

What the quartile approach does is strip that illusion away. It allows us to see how different segments of the market are moving relative to each other and importantly, where demand is concentrating.

Brisbane’s Signal: The Lower Quartiles Are Leading

The CoreLogic data shows that, lower-priced quartiles have been outperforming higher-priced segments.

This isn’t a coincidence. It’s a reflection of where buyers actually are.

As prices rise, affordability becomes the defining constraint. Buyers don’t simply exit the market; they adjust. They move down the price spectrum, recalibrating what they can afford, what they’re willing to compromise on, and ultimately, what they compete for.

That creates a compression effect.

Demand builds at the lower and middle end of the market, and when supply doesn’t meet that demand (which is exactly what we’re seeing) prices respond accordingly.

The Sunshine Coast: A More Constrained Version of the Same Story

If Brisbane is showing this trend, the Sunshine Coast is living it.

This is a market where:

• supply has consistently lagged population growth
• approvals have not translated into delivered housing
• and the type of stock being built does not align with how people are living

The result is a structural imbalance.

We’ve long highlighted the “missing middle” the undersupply of well-located, smaller dwellings that suit the reality of modern households. More than 60% of households are now one or two people, yet much of the stock pipeline remains skewed toward larger detached homes.

At the same time, rising prices have pushed traditional house-and-land product beyond the reach of a growing portion of the market.

So where does that demand go?

It doesn’t disappear. It concentrates.

Into smaller homes. Into attached product. Into anything that provides an accessible entry point.

Why Smaller Assets Are Becoming Strategic, Not Secondary

This is where the long-held hierarchy of “houses first, everything else second” starts to break down.

Because the question is no longer just about land content it’s about depth of demand.

On the Sunshine Coast, smaller properties are increasingly sitting at the intersection of multiple buyer groups:

• first home buyers trying to enter the market
• investors seeking yield and lower price points
• downsizers looking for lifestyle without maintenance
• and households adjusting to affordability constraints

That convergence matters as it creates competition; and competition is what underpins both price growth and liquidity.

There is also a practical layer to this that often gets overlooked.

Higher-value houses may show strong long-term growth on paper, but they operate within a narrower buyer pool. In contrast, more accessible properties benefit from a far broader market, which not only supports pricing but provides a clearer, more reliable exit strategy.

In simple terms: It’s not just about what grows, it’s about what sells.

Yield, Risk and the Reality of Holding Property

The other dimension often missed in the “houses vs units” debate is holding capacity.

As values rise, yields on larger, higher-priced assets tend to compress. That increases reliance on capital growth alone, while also exposing investors to higher holding costs.

Smaller properties, by contrast, often maintain stronger relative yields. That doesn’t just improve cash flow, it reduces risk.

In a market where interest rates, policy settings and economic conditions can shift quickly, that resilience matters.

It provides options, and in investing, optionality is power.

Scarcity Has Changed And So Has the Opportunity

There’s no question that land is finite.

But what’s becoming increasingly scarce isn’t just land, it’s affordable access to the market.

And as that access tightens, demand doesn’t chase the largest assets. It concentrates where participation is still possible.

This is the shift the Brisbane data is highlighting. And it’s the same shift we’re seeing play out on the Sunshine Coast, just with tighter supply, stronger migration pressures, and more pronounced constraints.

This doesn’t suggest a wholesale shift away from houses; rather, it reinforces the need to think more strategically about which houses, and why.

While townhouses and units must increasingly form part of a considered investment strategy, particularly as affordability continues to shape buyer behaviour, the data also validates our focus on smaller, terrace-style housing.

These assets sit in a highly strategic position within the market.

They provide:

• proximity to amenity, which remains a key driver of both owner-occupier and tenant demand
• lower land components, reducing overall entry price without sacrificing location
• improved accessibility for a broader buyer pool, supporting both growth and liquidity
• and stronger depreciation and tax outcomes, given the higher proportion of construction value

Importantly, terrace-style homes bridge the gap between detached housing and higher-density products. They retain the liveability and appeal of a house, while aligning more closely with the price points the market can sustain.

In a market increasingly defined by affordability constraints, this is where demand converges and where we see the most consistent balance between growth, yield, and exit.

It’s not just about moving down the density scale, it’s about positioning within the demand curve.

And right now, that curve is favouring well-located, smaller-format housing (in the form of terrace houses, townhomes and apartments) that more people can both afford to buy and to hold.

This isn’t an argument against houses. It’s an argument against assumptions.

Because markets don’t move based on asset type, they move based on people; and right now, the weight of people (their budgets, their constraints, their choices) is sitting firmly in the lower and middle segments of the market.

That’s where demand is deepest.

That’s where pressure is building.

And increasingly, that’s where performance is being driven.