2 March, 2023

What do continued rate rises mean for the Noosa region?

In the face of continued interest rate rises the Noosa region is evolving into a two-tiered market. The lower end is beginning to feel the impact of deteriorating interstate markets and increasing mortgage pressure, while the top end, which is less impacted by rate rises continues to sell at record prices when buyers have the opportunity to secure prized positions.

NAB residential property survey predicts a gradual slowing of the property market over the coming months and anticipates more rate rises over the next two meetings before pausing at 3.6 % through the rest of the year. According to NAB Analytics, the market across the Sunshine Coast has fallen by 10% over the last 12 months and is expected to fall a further 11% over the next year before again cycling upwards.

As mentioned in previous monthly reports we are yet to see evidence of this decline here in Noosa. Noosa remains a coveted location and properties continue to be in short supply.

That said, last month we saw fewer people at open homes which may translate to reduced values in the lower end of the market over the coming months.

It should be noted that only 30% of Australians have a home loan, and one could assume that a portion of those, lucky enough to be at the wealthiest end of the spectrum are not impacted by incremental rate rises.

According to NAB, these interest rate rises on average represent 5% of a borrower's household income. Most Australian homeowners have a strong pride in ownership and find ways to weather the increases and redistribute income in order to hold onto the family asset. So those expecting a price drop of significance in Noosa may be disappointed.

We expect the Noosa property market to normalise as interest rates hopefully plateau over the balance of the year. We will still feel some effects of declining interstate markets but whether we will reach NAB Analytic’s estimated 11% remains to be seen. Certainly, for buyers, the best time to act is over the next couple of months, before this normalisation occurs, and before the warmer months when Noosa’s ideal climate traditionally brings more buyers to the market.

Rental market remains challenging for local families.

The rental market remains tight, which is particularly daunting and sad. Everything possible should be done to construct more affordable housing in Noosa and the surrounding areas.

Noosa desperately requires housing, not for singles or couples, but large enough for families. Every day we are seeing local families desperate to secure a home to facilitate their well-established lives in the area. These families are fully employed or own small businesses, and have great kids enrolled in local schools and community activities, but have found themselves trapped in an unforgiving, competitive rental market. It is incumbent on both the Council and the community to look after locals in these challenging times.

19% of total new Australians moved to the Sunshine Coast last year, of these 30,000 came to the Noosa area. Considering this influx, plus interstate migration, in addition to our local population, it is no surprise we have such an issue that really must be dealt with in a more proactive manner.

Dan Neylan
Director
+61754473855
info@dowlingneylan.com.au
www.dowlingneylan.com.au