The Sunshine Coast prestige market can be categorised into three distinct sectors, the general Noosa area, the central Sunshine Coast encompassing Minyama, Buddina, Mooloolaba, Alexandra Headland and units in Maroochydore and the third is the smaller prestige market in Caloundra further south.
The Dynamic Noosa Market
The Noosa market is the most dynamic and is the subject of this update. It is heavily influenced by buyers from major capital cities like Sydney and Melbourne and to a lesser extent, Brisbane. With the highest entry point, this market has increasingly become the playground for high-net-worth individuals seeking holiday homes or lifestyle changes. It is not uncommon for buyers to purchase $10 and $20 million sites with intentions to redevelopment these into new homes.
The sale volumes of properties priced over $4 million approximately doubled between 2020 and 2021, before stabilising at historically strong levels throughout 2022. However, the year 2023 has seen a considerable decline in market activity, with buyers adopting a far more cautious approach. The market has become extremely tightly held, with few listings available. The scarcity of listings is underpinning the market and had resulted price growth in some sectors, while others have experienced slight declines, often dependent on specific location or property.
Market Challenges & Policy Changes
The market faces challenges, including the change to Noosa Council’s short-term accommodation policy. This policy now requires approval to operate for short-term letting and a documented history of recent short-term letting. As a result, there is a significant price difference between those properties with approval and those without, particularly in some localities whilst its is inconsequential in some markets. In some key holiday precincts, these price differences can be as much as 30%.
A more recent issue impacting the Noosa region is a significant increase in rateable land values, which became effective from 1 July 2023. This increase follows the substantial price growth in the market, with existing rateable values lagging significantly behind the market. Non-resident property owners now face soaring land tax costs, reportedly tripling and potentially quadrupling in some instances. These elevated holding costs will likely impact holiday rental tariffs, potentially putting the area further out of reach for some holiday makers. The increase in holding costs will make many of these holdings too costly for some property owners who have held property prior to the significant price rises. Therefore, we anticipate a lift in supply into 2024 following the Christmas holiday period and as costs begin to bite.
One of the most interesting recent sales in the Noosa market was that of a personal project by a highly regarded Noosa designer. Surprisingly, this non-beachfront or waterfront property sold for an impressive $13.3 million, emphasising the prestige and desirability of the Noosa region.
Image credit: century21.com.au - Castaways Beach