Property market update: Noosa vs Surfers Paradise
Does Surfers Paradise or Noosa take out the top spot as the best beachside ‘burb? Sydney continues its price growth and overseas buyers gain interest in the Aussie market again.
Surfers Paradise and Noosa – which is better?
Continuing on the summer theme of favourite beachside areas, let’s take a look at two Queensland favourites; Surfers Paradise on the Gold Coast and Noosa on the Sunshine Coast.
From a data perspective, Gold Coast is the most fascinating region in Australia. It sees the most unique search behaviour and is highly diverse in terms of demand. Putting that bias aside, how does Surfers Paradise compare to Noosa on other measures?
The view from the apartment at 6/55 Hastings St, Noosa Heads. Picture: realestate.com.au/sold
- Melbourne people love Noosa, Sydney people love both Noosa and Surfers Paradise: Melburnians just aren’t as keen on the Gold Coast as Sydneysiders. 62% of interstate search on the Gold Coast is coming from Sydney and just 28% is coming from Melbourne. This compares to the Sunshine Coast, which is roughly similar for both Melbourne and Sydney (45% from Sydney, 40% from Melbourne).
- Overseas property seekers love Surfers Paradise: Hardly anyone from overseas is searching for property on the Sunshine Coast. But Gold Coast, and Surfers Paradise in particular, regularly appear in the Top 10 for people searching from the US, New Zealand, Philippines, Canada, Thailand, Japan, South Korea and Vietnam.
- Surfers Paradise is more expensive for houses while Noosa is more expensive for apartments: The Surfers Paradise median for houses is around $300k more than Noosa. Apartments in Noosa however are far more expensive – more than double those in Surfers Paradise. This also flows through to rentals, although the differential for rent is far less. Longer term, Gold Coast housing will be more expensive than Sunshine Coast and land supply on the Gold Coast is far more limited.
- Houses in Surfers Paradise have been seeing very strong growth: Price growth in many $1 million plus suburbs on the Gold Coast have been similar to what we have seen in the Sydney $2 million plus market. Perhaps driven in part at least by all the Sydney interest in this market. House price growth in Noosa however has been flat while apartments in both Noosa and Surfers Paradise have also seen very little movement.
- Rental growth has been minimal overall but rent for houses in Surfers Paradise have dropped a lot: There’s nothing much exciting happening with rental growth in either markets. A relatively good supply of housing in both regions appears to be keeping rents pretty flat however Surfers Paradise houses have seen quite a big decline.
- Yields are highest for Surfers Paradise apartments: Our data on rental yields show that they are particularly high for Surfers Paradise apartments (over 6%). Second highest are Noosa apartments (over 4%).
- Noosa sees far more buyer demand overall than Surfers Paradise: Very high levels of stock significantly pulls down views per listing in Surfers Paradise. Overall, Noosa sees more than double the views per listing compared to Surfers Paradise when looking for properties to buy.
- Noosa sees more rental demand, but the gap is smaller than buyer demand: Both Noosa and Surfers Paradise are popular with renters, but Noosa sees slightly higher views per listing.
Which is better – Noosa or Surfers Paradise? Ultimately it does depend on whether you like more action. Surfers Paradise is in close proximity to theme parks and a more active night life. Noosa is more laid back.
With small children, Noosa possibly holds more appeal while for teenagers who want to party, Surfers Paradise is probably more fun. If you want somewhere less busy, Noosa is your best bet. Gold Coast attracts far more people from around Australia and the world. The fact that Melbourne people love Noosa so much more than Surfers Paradise is probably the most stark difference.
Price growth returns year on year to Sydney
Buyers are back, but sellers are still taking a while to return, which continues to put pressure on pricing. It has been a long time coming but finally Sydney has returned to year on year price growth – up just under 1% over the past 12 months.
Brisbane, Canberra and Hobart are also all now in positive territory. Melbourne growth seems to be taking longer but is likely to return to growth in December. Meanwhile at the other end of the scale, Perth and Darwin are still tough. As I discussed last week, there are more positive signs in Perth, but unfortunately not for Darwin.
The housing shortage in Hobart has again led to an acceleration of prices. Hobart cooled down a bit during the year, but the fundamentals of housing markets (supply/demand) plus the availability of cheaper finance appears to be pushing up prices again. Hobart rental growth remains red hot – up 9% over the past 12 months. Meanwhile, Canberra, a market that continues to surprise, saw another lift in pricing.
By small area, Launceston remains at the top the list while Northern Beaches continues to go from strength to strength. Inner East of Melbourne has also now taken off with a 4.8% increase. All of this is consistent with what we have been seeing with regards to views per listing for some time now.
Overseas search surges back
November was a big month for overseas search. In October, search from many Asian markets started to stabilise but in November, they really bounced back.
Asian buyers are keen overseas property investors; unlike Australians who tend to stick to local markets. What has been interesting is that Chinese buyers in particular have continued to be very active in places like Thailand, Malaysia and Japan over the last few years, while shunning Australia.
There are likely a few reasons for this. Australian prices have been dropping and the view on Australian property became quite negative. High prices are also a problem. Asian investors are more active at low prices in Australia – the majority search under $700k (as an aside, this is likely why Sydney sees far less international search).
In Malaysia, it is possible to buy new properties priced well under $200k. Many developers have been very active in that country producing stock that fits in nicely with capital controls put upon by the Chinese Government.
In October, search from many Asian markets started to stabilise but in November, they really bounced back. Picture: realestate.com.au/sold
Why the uptick? Prices in Australia are starting to move again is the likely driver. In HK and UK, continued political instability would also be a factor. It may also be that many developers are starting to more actively market projects overseas. While it may take a while to flow through to building approvals, it is definitely another positive sign for the new homes market.
Clearance rates
In Melbourne, 1,152 auctions took place this weekend. This compares to 636 in Sydney. While last weekend we saw higher numbers of auctions in Melbourne compared to last year, this isn’t the case this weekend. Last year at this time, we had 1,378 in Melbourne and 937 in Sydney. Clearance rates remain high: 79% in Melbourne and 78% in Sydney.
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