Noosa magic: How the jewel in the Sunshine Coast’s crown sailed through a property downturn to reign over Australian real estate

It’s no secret Australians enjoy packing up the car for stretches of saltwater and sand, but property hunters are flocking to a particular coastal suburb on the south-eastern border of Queensland, and spending big money to own a piece of paradise.

While the cooler months usually herald a softer market, the unit market in Sunshine Coast’s Noosa Heads was anything but slow and steady, according to the latest Domain House Price Report.

The median unit price in Noosa Heads is $1.8 million, up a staggering 38.5 per cent in the 12 months to June.

In the last five years, that median skyrocketed by 164.7 per cent – making it the strongest-performing unit market in the nation.

Known for its stunning beaches and national park, it’s no surprise that property hunters are finding a home in Noosa Heads. But what’s driving that growth?

“Simple economics,” Jesse Stowers of Tom Offermann Real Estate says. “Supply and demand. There’s a national demand but our supply is very finite.

“Noosa is unique in that we haven’t had a lot of developments coming or being built at the moment and if they are, generally, something would have to be knocked down to make space for something new.”

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21/42 Hastings Street, Noosa Heads QLD 4567

While sea changers are very much alive and well in Noosa Heads, with its median house price of $2.225 million – up 10.3 per cent in the 12 months to June and 98.7 per cent in the last five years – property buyers, particularly investors, are setting their sights on units instead.

And they are making a sweet return on their purchases. For a unit in Noosa Heads, a tenant could expect to pay a median asking rent of $788 a week, up 13.3 per cent in the past year and 66.1 per cent in five years. The median gross rental yield was 4.49 per cent, Domain data showed.

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12/6 Quamby Place, Noosa Heads QLD 4567

“The unit market is generally geared towards rentals … if you wanted to live in Noosa, you’d certainly try and buy a house as opposed to being in a unit, which is saturated with short-term holiday rentals,” says Damien Styring of Dowling Neylan.

“COVID-19 laid out a lot of the groundwork of the market here and accelerated [Noosa Head’s] property performance … with a lot of people moving out of Melbourne and Sydney during the lockdown. But I never would’ve imagined the market to move so quickly and by so much.”

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2/16 Katharina Street, Noosa Heads QLD 4567

According to the 2016 census, Noosa Heads’ population was 4484. By the 2021 census, during the peak of the pandemic and when sea changers were making their moves to the Sunshine State, the suburb was home to 5120 people.

Despite rising interest rates, Styring says a “new level of wealth has come into town”.

“These days, a lot of the buyers we’re dealing with don’t need to borrow money – it’s all in cash,” he says. “Whereas, five years ago, it was always subject to finance.

“The amount of money that has come into the Noosa market, predominantly over the last three to four years, has been phenomenal.”

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2/29 Allambi Rise, Noosa Heads QLD 4567

Stowers adds that height restrictions and a lack of available property “puts pressure on the demand and price”. But a particular beachfront strip has driven that price further.

Hastings Street is described as the heart of Noosa Heads, hosting a number of restaurants, bars, cafes and resorts.

Apartments in the street have sold for as high as $16.1 million for a four-bedroom, 412-square-metre unit, while a one-bedroom, 69-square-metre unit sold for $1.32 million recently.

“There are about 240 units on the beachfront of that street,” Stowers says. “When you compare it to the beachfront developments in the Gold Coast, there are plenty of towers and apartments there, but on Hastings Street, there are not that many.

“And it’s tightly held, so when there is a property that comes to market, it’s interesting to see how fast things get snapped up.”

Article source: Queensland Property Investor