A once in a generation property market in south east Queensland is fuelling a shift in the way commercial investors and tenants think about property. And nowhere is this more evident than Noosa, where population growth continues to drive demand and the uncertainty of 2020 seems long forgotten.
Like many regional centres, the well-known tourist destination has become a haven for investors, innovators and entrepreneurs who are leaving the city in droves for a seachange or tree change on the back of the pandemic’s work from home surge.
While other locations across the country saw strong declines in employment and business prosperity as a result of COVID-19, many coastal areas of Queensland, including Noosa and surrounds, continue to flourish.
Demand for commercial assets continues to grow into 2021 after the onset of COVID-19 which saw many vendors and purchasers put property decisions on hold.
STRONG BUSINESS GROWTH DRIVES MARKET DEMAND
The 2020 calendar year saw a 3.13% growth in registered businesses across the Noosa Shire to 6,853 businesses. A similar trend is evident across the greater Sunshine Coast which grew by 3.56% to 31,387 businesses.
The continued demand to both buy and lease premises is testament to this growing entrepreneurial location.
“We are seeing company directors or people in senior positions in mid-to-large companies moving up here and working remotely, in some cases bringing some team members with them and launching small regional offices,” Ray White Commercial Noosa and Sunshine Coast North co-Principal Paul Butler says.
“Tradies, retail store owners and café owners from Sydney and Melbourne are deciding to move here for the lifestyle, bringing their businesses with them or starting a new one, making the commercial property market even more competitive.”
LIFESTYLE LEADS A “TRAJECTORY SHIFT”
Population growth is driving confidence, with the areas surrounding Noosa experiencing some of the most significant growth in the country.
The December 2020 quarter saw Queensland net migration grow to 9,763 of which only 4,470 people chose a capital city location, with the remaining 5,293 moving to other, mainly coastal areas.
Leading demographer and social commentator Bernard Salt told the Property Couch Podcast this trend is set to stay as stronger regional centres or “Goldilocks” towns within 150 kilometres or so of major cities continue to grow in appeal.
“This is not an aberration. It is a trajectory shift … Australians are so motivated by lifestyle, I think that is a value that has transcended generations.”
With increased demand comes increased property prices. The area occupies three of the top 10 spots for regional house price increases across the country for the first five months of 2021. The Noosa hinterland has experienced a 24.3% increase (the second-highest behind the Richmond Valley in NSW) while Gympie-Cooloola prices have increased by 22.4% (sixth position) and Noosa by 20.2% (tenth position).
UNPRECEDENTED COMMERCIAL AND INDUSTRIAL DEMAND
This population tide is fuelling unprecedented commercial demand and significant price growth in retail, office and industrial stock across the region. At Ray White Commercial Noosa and Sunshine Coast North, we are seeing record prices for properties deliver exceptional results for investors.
Businesses are also looking outside of the main areas to local centres like Noosa Junction and Coolum, which are starting to gain momentum.
Another trend is a shift in traditional uses of office, retail and industrial premises. With supply short, character properties in demand and unusual partnerships emerging, Paul reports seeing industrial sheds and former retail premises switching to mixed-use.
“Normal usages are a thing of the past, especially when people are working remotely. One spouse could be a financial planner, the other a florist and they may also run an export business. Such uses defy traditional planning and people are finding spaces that can accommodate these mixes within the relevant approval processes.”
GFC RENOVATIONS REAPING REWARDS
Many investors took the opportunity to spend big on renovations during and post-GFC, using the market downturn to improve post-downturn yields.
“Improvements made in Hastings Street during that time turned out to be good investments. As the economy became stronger, momentum built and returns increased. Now those properties are in high demand and others are scrambling to renovate to catch up,” says Ray White Commercial Noosa and Sunshine Coast North co-Principal Paul Forrest.
“Everything eventually gets renovated in Hastings Street. Investors need to keep evolving and spending money to improve their assets or they will be left behind.
These earlier investments are making properties even more appealing for business owners looking for a contemporary space to move their café or restaurant from the city to a regional area.
So, what’s next for Noosa? Well, no one knows. But with continued low interest rates, regional migration and closed international borders, the resilient performance of Noosa’s commercial and residential sectors is expected to continue well beyond 2022.
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