What’s Happening With The Noosa Market?
January 25 2022
The past 12 months have seen extraordinary capital growth through all parts of Noosa, for apartments and houses.
| Suburb | Median 5 years ago | Median 12 months | % difference from 5 years ago |
| Noosa Heads QLD | $ 852,500 | $ 1,557,500 | 82% |
| Noosaville QLD | $ 907,500 | $ 1,605,000 | 77% |
As I predicted in April of 2020, we were not going to suffer a market crash of 30-40% as declared by the so-called experts (including the Reserve Bank of Australia), but a bounce as soon as our first national lockdown ended – because now that you know you can work from home, now that you have greater interest in and choice about lifestyle, where would you want to live?
Noosa of course!
To understand the new dynamics, and how to be successful in this market whether as a seller or buyer, we have to understand what the market is doing.
We are in a low inventory environment which can also be called a seller’s market because there are more buyers than sellers – it is simply a supply and demand issue.
The fact is that right now there is about half as many homes for sale around the world than there were just a couple years ago. The demand has gotten greater and the supply has declined
This isn’t just a COVID situation – it’s been building up for years and was just accelerated by the pandemic.
The first thing that happened to get us to where we are today is that baby boomers – those of us born in the 50s through early 60s were for the last 20 years our biggest client group. They are the ones who are usually making moves buying and selling the majority of the real estate.
When the pandemic struck in early 2020, they became less certain, and they took a step back. They didn’t really want to move anywhere. They felt it safer to stay where they were. And so there wasn’t the kind of new inventory of listings from downsizers and relocations coming to market that buyers were expecting.
And as 2020 rolled on, and lockdowns came and went in our capital cities and southern states particularly, a younger buyer group got itchy feet and demand started to ramp up.
With companies allowing staff to work from home, young families particularly started looking to the regions for fresh air and space between neighbours, and a better family lifestyle.
And that caused a ripple effect. Every listing that doesn’t go on market has another couple of buyers that are out there in the market looking for a home to purchase.
Combine that with the global housing market crash that kicked off in 2008, means there has been less construction for new homes than ever before. Fewer people built homes in the past decade than historically. And in places like Noosa, there is no new land to accommodate new housing estates.
Combine that with historically low interest rates, which is pushing buyers to get into the market because a property effectively costs less over time than the same property would at a higher interest rate, it’s a great time to buy.
But those interest rates are also a cause of fewer properties listing, as many owners simply re-financed to lower their monthly payments.
Or, low interest rates tempted property owners to purchase another property because their monthly payments are low and rental income on the second property would cover that mortgage anyway.
All of this together has created a situation where there was hardly anything to buy. And that’s how we we ended 2021.
While demand will remain strong, the price growth won’t match the past two years.
- The panic buying evident in 2021 has gone. Now that our borders are open and COVID has arrived in Queensland, we have lost our COVID “premium”.
- 2022 will see more properties listing for sale as sellers relax and start to think about moving on, giving buyers greater choice.
- We have also seen some recent buyer resistance to overly high pricing and perceived value is not there.
Sellers are warned to take note.
Regardless of the market conditions, there are three truths in real estate:
- Your property is not on the market in isolation. Buyers have a choice and that choice is increasing.
- There is full transparency of transactions and prices. What you paid and when, is public knowledge listed on a dozen different real estate sites over which we have no control.
- A property is worth only what a buyer is prepared to pay for it, and very often your first offer is your best offer, as those buyers seemingly snapping up properties have been looking for a while and missed out on properties already.
If you are currently selling and you are not getting the price you want – you may be above the market. Yes, even a seller’s market.
The thing to remember is that we have the best selling conditions ever experienced – that is a global truth.
Even with more properties coming on market in 2022, we will remain in a low inventory market for some time.
If you can’t get the price you want now, you never will. But you will still get a great price…if you sell now.
And buyers will still get great properties for less than in the capital cities, with an enviable lifestyle on offer. It’s a win-win!