Chapter 1: What recent trends are impacting Noosa's real estate market?
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And welcome to another episode of the Real Estate Podcast, available on iHeartRadio every morning and also on Spotify and Apple and wherever you get your podcasts from. Well, it's a Wednesday morning. It is back again with us, the middle of the working week, the 21st day for September for 2022. And coming up in just a moment, we're talking to Alex in Noosa.
Yes, Noosa, a real hotspot on the Sunshine Coast. Luxury homes, luxury prices everywhere. And I guess the holiday ultimate getaway home that a lot of people have, but the market, it is changing. And we'll find out what the latest is in just a moment. As we know, the higher interest rates have cut the maximum amount people can borrow, but could ultimately benefit new homebuyers.
That's the news from Jonathan Kearns, the RBA's head of domestic markets. He said that the increase in mortgage interest rates have reduced borrowers' maximum loan size by about 20%. This was reported by realestate.com.au. He said that only about 10% of borrowers take out the loan close to the maximum.
And the RBA modelling in April estimated a 200 basis point increase in interest rates would lower real housing prices by around 15% over a two-year period.
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Chapter 2: How has Noosa's median house price changed over the years?
And the model also suggests that if interest rates reverted to their initial level after that two-year period, then the interest rate effect on prices would be expected to eventually unwind. But I guess like anything, it's guesswork, isn't it? And time will be the true revealer of what eventually does take place.
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Chapter 3: What factors contribute to Noosa being a desirable location for homebuyers?
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Well, let's go and check out what's happening in Noosa where house prices in the quiet village in the Noosa Shire increased by 195.5% over the five years to June. Now, That is the steepest growth for any suburb in the country, making it the first Queensland suburb with a median house price north of $3 million. And that is coming from a recent domain report.
So joining us this morning, we have Alex Harris. She is the principal from Noosa for Sale. Good morning to you, Alex. Welcome to the Real Estate Breakfast.
Chapter 4: How have interest rates affected borrowing and property prices in Noosa?
Good morning, Craig. Thank you. So what is going on in Noosa? Unbelievable prices. The median house price in the Sunshine Beach was just shy of $1.1 million in 2017. It now sits at $3.25 million.
Yeah, look, it's very rare for a regional centre to have a higher median price than an urban centre or a capital city. That is the case for Noosa and it has been for quite some time now. With that $3 million median, I've got to remind people that we're still very cheap compared to southern states. And there are plenty of properties under $3 million, but not a lot under the million.
Yeah. And, you know, it's not just these houses, but unit prices also more than doubled in the past five years, increasing from 127.3% to $1.5 million, the second steepest jump for a suburb.
Yeah, absolutely, and we've seen that across Noosa, not just Sunshine Beach, but Noosa Heads and Noosaville too.
And Noosa has been described as the playground for the wealthy, and they've certainly been turning up in their droves. They've been heading to Noosa to play and to relax on the Sunshine Coast.
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Chapter 5: What demographic changes are influencing Noosa's housing demand?
There just seems to be this appetite for Noosa, and like a lot of other areas, you know, this was very much undervalued for so many years.
Yeah, absolutely. Undervalued is the key factor here because right up to 2020, we were selling so cheap, even though it was an increasing market. It's not just the rich and famous coming here. It's ordinary families from southern states and even from Brisbane looking for a better lifestyle. We have everything here.
We've got the river, we've got the national park, we've got the ocean, whether you want surf or a main beach where it's quieter. Every possible natural asset makes this an incredible place to live.
Alex, how long have you been there? Because I guess you would have seen so much change, particularly in the last three years.
Oh, absolutely. I've been here for over 21 years and really couldn't think of anywhere else I'd rather be. And definitely significant change, not just in the property market, but the overall township. You know, little centres like Noosa Junction are now very vibey and fun with lots of bars and restaurants, which you hadn't seen previously, you know, to the last three years.
So that's an exciting change, I guess, that COVID allowed, surprisingly, was the opening of all these new little businesses.
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Chapter 6: How is the rental market in Noosa evolving post-COVID?
And what is it with the population? I remember some years ago, there was only so many people going in, and I think that that had something to do with building in Noosa with the council. Can you just give us a bit of a 101 update on that?
Yeah, correct. It's a bit of a myth that we had a population cap. However, the council was and remains very aware of our limited infrastructure and the inability to retrofit infrastructure. So they do have a theoretical cap on population just to manage our water supplies and roads and so on. New people are still coming into the area as some people leave.
You know, there is that turnover of property.
And once upon a time, a $3 million property would buy a home with ocean views, guaranteed of that. Buyers today, probably for that money, get a knockdown or a reno with ocean glimpses. Is that a fair comment in terms of what's going on right now?
It is a fair comment for Sunshine Beach, but there are other parts of Noosa like Noosaville, which are much more affordable and have family homes in the mid one millions. And that's still very cheap for Southern buyers.
The other point I'd like to make out is even though the interest rates are increasing, a lot of our buyers are cash buyers because they're selling in Melbourne or Sydney and coming to Noosa, buying a beautiful family home for mid one nines and pocketing a million dollars.
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Chapter 7: What predictions can be made for Noosa's real estate market by Christmas?
So it's not all bad news for buyers.
Oh, it's good for the retirees. That's right. A million dollars in the hip pocket. Not bad. And the market, it has slowed a little bit, but just maybe just bring us up to date in terms of what is happening right now. Still very transactional?
Yes. Even though the market has slowed and properties are sitting on the market longer, we're still around that 50 days, which is very much a balanced market. It's not anything to be scared about for sellers and certainly for buyers. It gives them more choice with more properties on the market.
But all those predictions of doom and gloom and 30% and 40% price crashes from those so-called experts, they were wrong in 2020. They're wrong now. And the reason is we have such strong demand and such strong northern migration still, and no new land.
Chapter 8: What advice does the guest have for potential homebuyers in Noosa?
So the only thing that can happen here is that balance of supply and demand. And at the moment, we still have demand outstripping supply.
Yeah, they're not growing any more land. That is one of the significant things about Noosa. And in terms of Noosa, Noosa has a lot of holiday homes, but that's sort of changing now, isn't it? With so many people now deciding to move into the area permanently.
Yes, it's actually affected our rental market as well. So a lot of our landlords through the COVID lockdowns down south actually moved into their rental properties here, whether they be holiday homes or permanent rentals. So we lost a lot of properties out of the rental market. A lot of those holiday homes in residential areas are converting back to either permanent rentals or owner occupiers.
And the only buyers we've had over the last two years really have been owner occupiers. So we would welcome some investors back in the market.
Yeah, and just having a look at those rents, I see that they've climbed rapidly with the median house rents increasing by almost two-thirds to $900 per week over the last five years to June. That's from a domain data. And also unit rents jumped by 51% to $650. So that has only been going one way.
Absolutely. And while that's good news for investors, it's pretty hard on locals who work in the hospitality industry and working for resorts and restaurants and so on. It's really becoming unaffordable for them.
So that is something that's on the agenda for Noosa Council and for anyone involved in business in Noosa because we now have a shortage of staff just because of those rental prices and people not being able to live in the middle of town.
And you talk about the pundits getting it wrong. I think, you know, a lot of the economists, they, to their credit, they do come out and say, yes, we did get that wrong. And in some cases, horribly wrong. So let's just do a little bit of a prediction with you here, Alex, because we are sort of starting to look towards Christmas.
What do you think is likely to happen with Noosa between now and Christmastime?
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