MARKET REPORT - MARCH 2007

The past three months have been a buoyant time for real estate sales, the main reason we believe is because buyers are seeing value. It's notable that property which appears overpriced to the market is sitting there not moving, or even more noticeable when the price has been reduced to market expectations it does sell.

In some areas such as Noosa Sound there is a reasonable amount of stock, however 80% of it is old and dated, therefore either a knockdown and rebuild or needing substantial renovation. There is a certain reluctance to build because of the time it takes and the cost and further fear of a blow-out in costs. An architect designed home of top quality finishes is costing up to $4,000 per m². makes buying existing homes look like good sense.

The apartment market is showing mixed results with Noosa Sound waterfronts selling strongly. There are a number of new developments in Noosaville which are struggling to sell. If one started again today with basic land and had to develop these projects with council delays and building time they would have to sell at a 25% premium to what they can now be purchased for so they really represent good buying.

Overall Sunshine Beach and Little Cove are very tight, as is the Hastings Street beachfront. Elsewhere there is a fairly evenly balanced market.

A number of owners are on the market to try and take advantage of the new superannuation rules. This will cease on June 30th. After that there could be money come out of these new super funds back into the real estate market.

There are two significant trends:

(1) Prime position real estate is keenly sought and relatively little available and it has continued to move upwards in price.

(2) The normal real estate is in its fourth year of a flat market. One would expect this to start moving upwards within 12 to maybe 18 months. In other words we've been at the bottom of the market for 3 and a half years. Sooner or later it will turn upwards.

Peter Dowling