Noosa Property Market Update | Winter/Spring 2023

NOOSA MARKET UPDATE

Winter / Spring 2023

Land tax increases & how they may impact you

Many property owners in Noosa and the Sunshine Coast have found their land tax bills increasing over the past few years. In this market update, we explore why.

Who is liable for land tax in Queensland?

If you own land in Queensland valued over $600,000 that is not used as your principal place of residence, you’re likely to be liable for land tax. This includes investment properties, commercial properties, or vacant land. You can also be liable for land tax on your principal place of residence if you have additional dwellings or use your land for business purposes.

The Queensland government calculates the amount of land tax you need to pay based on the ‘unimproved capital value of the land’ - that is, its value without any buildings, structures, or other improvements.

When working this out, the government’s valuers will consider various factors, including the property market, the land’s physical attributes, how the land is being used and any constraints on its use.

The land tax rates, thresholds, and exemptions vary depending on how you own the land (i.e., whether as an individual, corporation, trustee, or absentee), and companies and super funds generally have to pay more land tax than individuals.

The government also calculates your liability based on all the land you own in Queensland. For instance, if you own three properties, each worth $500,000, it will assess you based on a land value of $1,500,000.

How much more land tax do you have to pay?

That depends on factors including how much the value of your land has increased and whether you own it as an individual or through a vehicle such as a company or super fund.

Written by Robbie Neller Director / Sales Agent 0473 577 828

But say you own properties with a combined land value of $2 million that increased in value by 50% so that they’re now worth $3 million. The difference in land tax would be $16,500 ($37,500 v $21,000 as an individual or $45,000 v $29,500 for a company or super fund).

A further potential increase ruled out

If that wasn’t enough, the truth is that this wasn’t the only rise that the Queensland government had initially planned. The Revenue Legislation Amendment Act 2022 was intended to introduce significant changes to land tax in Queensland from 1 July 2023. This included counting a taxpayer's total landholding value in Australia when determining their land tax liability.

However, the government’s plans were abandoned when governments in other jurisdictions refused to comply by sharing property records in their States or territories.

That said, the government also has various land tax exemptions. These include if you live in the property as your main residence, or use it for certain activities such as a sporting club.

You’ll need to claim that exemption - for instance, if you begin living in a holiday home as your main residence. You can find out how to do that via the Queensland Revenue Office website.

Impact on Property Investors and Property Owners with Substantial Assets

Still, the increased land values our area has seen are likely to have a real impact on many people’s budgets.

For example, property owners with multiple properties or properties worth over $4 million could be facing land tax bills upwards of $30,000 per year. This could alter budgets and even result in financial difficulties for those who rely on rental income.

Alternatively, it may mean that some landlords are forced to increase the rent on their homes or holiday lettings - even beyond their already high levels, leading to further issues around housing affordability in our area.

We have had discussions with several property owners who are concerned about the sharp jump we have seen in UCV's.

If you’re likely to be affected, you should seek professional advice now. There will no doubt be cases where families who have held land or homes across several generations may be forced to sell due to affordability. We’ve also seen property owners exploring alternative investment options to diversify their portfolios.

Prestige Property Sales

THE BEST OF NOOSA

Local Find: CLO Studios

In our latest feature as part of our Local Finds series, we interview Chloe Tozer, founder of CLO Studios. As an interior design atelier, CLO Studios is responsible for the interiors of some of the most iconic properties in Noosa, and offers a selection of unique furniture and works by local artists in their recently expanded boutique. Chloe talks about her journey from jewellery artisan to interior designer; the recent rebranding of her business, and her plans to expand their online store. Scan the QR code above to read the full interview.

clostudios.com.au

• nellerre.com.au/articles

In this edition, we speak with Oliver Bruce, the Director/Auctioneer of Marshall White’s Port Phillip office – a diverse, bustling region south of Melbourne’s CBD.

Melbourne, Australia

What is the general state of the market at present in the city of Port Phillip?

“ We are dealing with levels of under supply I have not witnessed during my 20+ years in the industry; this scarcity of available stock has heightened competition amongst buyers vying for the properties that are on market, pushing up prices and in some cases, recording record results, particularly in the prestige sector.”

What do you feel has attributed to the recent changes in the market?

“ The increase in interest rates and trepidation around this has certainly caused hesitation amongst vendors; many not confident that the timing to sell is right, and therefore holding their property for longer and playing the waiting game. This uncertainty has exacerbated the shortage of stock, reducing choice for buyers.”

Have you noticed an influx of people moving back to Melbourne now the Pandemic has reached its peak?

“ No, not an influx – however, there has been some noticeable movement on a micro scale in this area; there is certainly movement back interstate and inland to the country. ”

How do you expect the market to perform in Melbourne for the remainder of the year and beyond into early 2024?

“ Generally, winter is the least active time, then as we hit school holidays and head towards spring it gets busier with not only increased stock levels, leading to a more balanced market and possibly downward price pressure related to the more listings creating a wider choice.”

What would be the best advice for any vendor who is on the market at present?

“ Polished professional marketing is essential to ensure your property stands out, it enhances perception of value as well as volume of enquiry; and of course, presentation needs to be first-class.”

Have you noticed an increase in people moving from your area to Noosa?

“ Yes, I know people including clients, friends and those in my wider network who have relocated to Noosa, even a few real estate agents; I’m not anticipating they will move back any time soon, if ever! ”

Team Spotlight

At Neller Real Estate, our unmatched internal operation practices and the attention to detail of our team mean we’re always available to provide outstanding care, communication and service to every one of our clients. We constantly invest in professional training, mentoring and skills development to keep us one step ahead.

Our unique team-based approach to selling property provides our clients with a distinct edge when compared to the traditional agency model - our team truly works together in complete collaboration from beginning to the completion of your eventual sale to ensure optimal results and a first class client experience.

We believe recent trends such as digital marketing and data-driven analysis have transformed the real estate sector, offering new potential for agents to attract buyers and service their clients. We embrace this new technology, complementing it with a collaborative team-based approach to provide an effective and smooth sales process.

In doing so, we combine old-fashioned hard work with the latest, most effective marketing techniques to help find the right buyers for your home and achieve the best price and provide you with an unparalleled level of support. If you are considering selling your home, contact us on 07 5471 4000 to arrange a complimentary appraisal.

Neller Real Estate offers a culture of collaboration and innovation, where the latest technology is coupled with team-based excellence in customer service.

THE BEST OF NOOSA

Local Find: Lucio’s Marina

In the business of feeding people for generations, hospitality truly does run through the veins of the Galletto family. Son to Italian immigrant parents, Matteo Galletto continues the family tradition of offering fine Northern Italian cuisine, showcasing the best quality local seafood our region has to offer. Overlooking Noosa River, Lucio’s Marina offers an unforgettable fine food and dining experience, within contemporary elegant surrounds. To make a reservation, visit:

luciosmarina.com

Seizing Opportunities in a Dynamic Market

The global economic landscape is evolving, presenting a range of opportunities for savvy investors. As core and headline inflation show signs of easing worldwide, it's an optimal time to consider strategic investments that can potentially yield favorable returns. While the Reserve Bank of Australia maintains a cautious stance with incremental rate increases, it also recognizes the importance of monitoring global factors such as household spending, inflation, and the labor market.

Diversification, a Key to Navigating Uncertainty

With the prospect of weaker global growth extending into 2024, investors can proactively safeguard their portfolios by diversifying their asset allocation. By carefully selecting a mix of investment options, individuals can position themselves to mitigate potential headwinds and capitalize on emerging opportunities. Now, more than ever, it is crucial to explore avenues that offer stability and growth potential in an evolving economic landscape.

Navigating Economic Challenges

While the Australian economy has experienced a slight slowdown, it is not yet at a magnitude that would deter further interest rate hikes. Although the recent growth rate of 0.2% in the March quarter was lower than the previous quarter, the annual growth rate of 2.3% indicates resilience in the face of challenges.

Monitoring productivity growth and rising unit labor costs will be crucial to identifying sectors that can potentially outpace population growth and generate positive returns.

Equities

A Source of Resilience: Equity markets have demonstrated strength in 2023, offering investors positive returns year-on-year. This buoyancy can be attributed to factors such as economic resilience, the promising prospects of AI, receding headline inflation, and ample liquidity. As the market adjusts to tightening liquidity conditions, the outlook for equities will depend on a projected recovery in earnings. Balancing growth prospects with currency trends will be instrumental in identifying resilient investment opportunities.

The evolving economic landscape presents an array of investment possibilities for individuals seeking to capitalize on shifting trends. By diversifying portfolios, keeping a pulse on currency and bond markets, and identifying thriving sectors, investors can navigate the challenges and seize opportunities in an ever-changing financial landscape.

THE MARKET OUTLOOK

WRITTEN BY ELIZABETH TILLEY, NEWS CORP QUEENSLAND REAL ESTATE NEWS EDITOR

The fear and uncertainty that gripped the market earlier this year seems to be thawing coming into winter, especially in ever-sunny Noosa.

While there is still no shortage of buyers for Noosa property, they are generally more cautious and want to know they are not overpaying for a property - except for the top end of the market, which continues to outperform.

Despite the headwinds of higher interest rates, home hunters and investors (chasing strong rental yields) from far and wide are still looking for their piece of paradise in the Noosa shire, provided the price is reasonable.

Many have taken advantage of the opportunity to pounce with a little less competition in the market and sellers’ price expectations easing slightly - although choice is still limited.

The fear of missing out (FOMO) has clearly subsided and negotiations generally require a little more give-and-take from both parties, with sellers coming to the realisation pandemic prices won’t last forever.

Auction clearance rates remains well over 80 per cent, with agents reporting an average of three to four registered bidders per auction.

The prestige sector ($4m-plus) has performed extremely well so far this year, with waterfront properties, in particular, seemingly immune to any softening in the market.

Noosa’s tightly-held, waterfront trophy homes have always been hard to get hold of, but supply continues to be particularly lacking in this space.

Off-market sales are still the trend at the top end of the market, and when an opportunity to purchase one of these homes arises, there is always a willing buyer acutely aware they could wait many months or years to find something similar – irrespective of the price they were willing to pay.

To give you an idea of just how much of a premium buyers are prepared to pay for the perfect Noosa property, take 47 Mossman Court in Noosa Heads, which fetched $23.25m in December.

The Paul Clout-designed waterfront villa was purchased for $10.9m in 2020 by Hancock Prospecting executive Dan Wade, but just two years later, Sydney socialite Jaclyn Gazal was prepared to pay more than double that for it.

In recent months, some of the standout sales in the region include a three-bedroom unit at 2/29 Allambi Rise, Noosa Heads, which fetched $7.6m; a 1980s gem at 17 Wyuna Drive, Noosaville, which sold for $8.7m; and a four-bedroom, waterfront house at 11 Key Court, Noosa Heads, which changed hands for $8.5m.

A quintessential beach house at 51 Tristania Drive, Marcus Beach recently sold post auction for $7.425m, breaking the suburb record.

And, an absolute beachfront, 20-year-old home at 100 Lorikeet Drive, Peregian Beach, sold the night prior to auction for $4.8m. The home had been owned by the same family for more than three decades and fetched a price well above their expectations.

The only way is up, if prices continue to grow at the same rate they have over the past five years.

Recent analysis by PropTrack projected that Noosa Heads would have the highest potential growth of any other region in Queensland by 2028 if prices were to continue to grow at the same pace.

The data found the current median home price (houses and units combined) of $1.95m would jump a whopping 150 per cent in five years to $4.875m, based on what we’ve seen in the past five years.

Whether that same price growth is likely to eventuate is yet to be seen, but there’s no doubt long-term there is no stopping the powerhouse market that is Noosa.

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