The holiday hotspot with the steepest home price growth in the country

Properties in the Queensland holiday hotspot of Noosa Heads have recorded the sharpest price jump of any suburb in the country, more than doubling over the past five years.

Apartment prices there soared 179.5 per cent in the five years to March to a record median of $1,775,000, Domain data shows, jumping 44.9 per cent over the 12 months to March.

Apartments in the coastal hub – once better known for its beaches, national park and everglades — have sold for as high as $16.1 million, while a one-bedroom, non-beachfront unit recently sold for a hefty $2.75 million.

House prices jumped 129.2 per cent over the five years – the fifth-largest suburb increase nationally – and 15.8 per cent over the year to a median of $2.2 million.

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Apartment prices in Noosa Heads increased by 179.5 per cent in the five years to March 2023. (SMH)

Selling agent Adrian Reed, director of Reed & Co, said the market had been ignited by increased demand from sea-changers and holiday home buyers in the pandemic.

“There was huge demand from people in Sydney and Melbourne and, together with the acceleration in domestic tourism, they supercharged prices off of a fairly low base,” he said.

“There’s also been a shortage of good-quality, larger units in Noosa but, with an ageing population looking to move into units, to free up equity and be able to lock up and leave, that’s pushed up prices. These retirees are often incubated from the pressure of interest rate rises, too.”

Reed’s agency recently sold a one-bedroom apartment at 4/35 Picture Point Crescent, Noosa Heads, for $2.75 million.

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A large one-bedroom non-beachfront apartment recently sold for $2.75 million. (SMH)

Demand for units also increased off the back of a 2020 decision by Noosa Council, which adopted a new shire plan that banned short-term accommodation in houses in low density residential zones, shifting a large chunk of investor funds away from houses and into units.

Many buyers who had intended to purchase a house to use as a holiday home and rent out on platforms like Airbnb and Stayz for the remainder of the time, ended up buying apartments.

Tom Offermann of Tom Offermann Real Estate said there was high demand for the limited number of apartments in the area.

“They’re in limited supply with no new apartment approvals coming up as there’s no more land on which to build them,” he said. “Also, there’s a six-storey restriction on their height.

“But demand is still high as this is a highly desirable location for holidaymakers and second homes as well as full-time living. We still have an over-hang of buyers from post-COVID still in the process of selling their homes elsewhere … to come here.”

Among the agency’s sales was the record-smashing four-bedroom apartment at 5/81 Hastings Street, Noosa Heads, which sold for $16.1 million to an interstate buyer in 2021.

More recently contracts were signed for $88 million of property in just four weeks, with eight homes in the $5 million to $10 million range, and one higher.

The recent return of overseas buyers is also keeping demand strong, according to Georgia Scharer of Queensland Sotheby’s International Realty.

“We’re now seeing a large number of international buyers from South Africa, New Zealand and now China again,” said Scharer, who just sold one apartment within two hours of it being put on the market, and another two apartments within a day.

“We’re still seeing a lot of Sydney and Melbourne buyers too, but a lot came here to live and have since gone back, keeping their apartments as holiday homes. They found the place wasn’t busy enough for them, and nothing opens after 8pm.”

Noosa4Sale founder Alex Harris said the popularity of units in the area was being boosted by a lifestyle shift towards living in larger, high-quality apartments, particularly among families who find the communal amenities like pools, gyms and gardens great for kids.

Two long-term master planned apartment complexes at Noosa Heads, the five-hectare Parkridge Noosa, just beyond the tourist bustle and across the road from the Noosa Springs Golf Resort & Day Spa, and Settler’s Cove nearby, are both whetting appetites for bigger units.

“Most existing units in Noosa are around 40 years old and most don’t have lifts, so we have a limited supply of good apartments [due to few approvals],” said Harris, who’s currently selling two apartments in Parkridge.

“Parkridge, for instance, was built on an old sand mine which was a bit of a scar and a dump, so its development won approval.

“These new apartments are selling fast, and we have lots of celebrities coming here to buy. An entire duplex of two four-bedroom properties in the Parkridge Terrace Homes precinct, worth $6.3 million, was an RSL Lotteries prize but are now being resold for over $3 million each.”

Article source: Queensland Property Investor