Market Movements with Kirstie Klein Hunter
The best buying opportunities and options can be found with the right help, as Jennifer Swaine discovers.
A lot can happen in three months – especially when it comes to the property market.
Since I last chatted with Noosa Buyers Agent, Kirstie Klein Hunter, we have seen a new federal government sworn in, interest rates have increased sharper and faster than was predicted earlier in the year, the inflation rate is expected to peak at 7.75 per cent by the December quarter of 2022 and the electricity market has all but imploded, sending rates through the roof and leaving consumers tightening their belts for fear of further increases.
But it’s not all bad news according to Kirstie who has a background in financial markets before she ventured into real estate acquisitions four years ago.
“While the market is definitely subdued, with not a lot of movement happening at the moment, now is the perfect time to buy, especially if you are a cash buyer or you are approved for finance,” Kirstie said.
“The interest rate rises have pushed some buyers out of the market, or into a lower segment of the market, meaning that there are less buyers chasing after the same prestige properties than there was 6-12 months ago and this has taken some of the heat out of the market.”
As a specialist in the Noosa region who works with real estate agents to secure properties for interstate and overseas clients, here’s what she thinks we can expect to see over the coming months:
Prestige market remains strong
Kirstie said the high end of town was faring well but there continues to be limited stock in sought-after locations for high-net-worth clients. Kirstie said many of the prime locations in and around Noosa are still very tightly held with property owners not willing to sell.
Apartments lure cashed-up buyers
Kirstie notes an interesting trend of investors finding apartments more attractive for a number of reasons:
1. Local letting laws – the new letting laws that came into effect in February 2022 are now starting to bite. Enquiry for apartments that are close to the water with long term and short-term letting history are more attractive to investors.
2. New QLD land tax laws – From 30 June 2023, when the Queensland Government calculates land tax, they will use the total value of your Australian land. The current tax-free thresholds are $600,000 for individuals (other than absentees) and $350,000 for companies, trustees and absentees.
This includes your taxable land in Queensland and ‘Relevant interstate land’ including land located in another state or territory that is valued under interstate valuation legislation. It is important to note however, that you will only pay tax on the land you own in Queensland.
3. Location – Purchasing an apartment increases your chances of water views and being closer to the beach, restaurants, cafes and bars – thus increasing the appeal to holiday makers and allowing for higher rental returns.
On the Ex-pat radar
Perhaps it is because of the location and perhaps it is because of its reputation in international markets but Kirstie says she is seeing a sharp increase in enquiry from buyers living and working overseas.
“In the last week alone, I have had two enquiries from ex-pats who have never set foot in Noosa however, they see it as a good investment option as it is a highly sought-after location with limited stock. And I would agree,” Kirstie said.
Fencesitters risk decreased borrowing
Although many of Kirstie’s clients are cash buyers, she says people are missing out on really good buys because they are waiting to see if there will be a drop in real estate prices.
“People are waiting to ‘time’ the market with many buyers sitting on the fence,” she said. “What many people do not realise about this strategy is, your borrowing capacity also reduces every time there is an RBA cash rate increase.
“A basic rule of thumb is if the cash rate increases by 50 basis points your capacity to borrow decreases by 5 per cent. As a result, your borrowing capacity may be significantly impacted, and you may not be able to purchase in your preferred area.
“If you are borrowing, it is important to ensure you have current pre-approval.
“While this doesn’t affect cash buyers it does affect those relying on a loan to secure the property of their dreams.”
Rising interest in interest rates
Interest rates would have to be the most talked about factor in the property market at the moment.
With inflation expected to peak in Australia in late 2022 three of the big four lenders have recently decreased their four-year owner-occupied fixed interest rates.
Kirstie said this was a good indication that the banks are not expecting interest rates to rise as high as first expected – which is good news for borrowers.
While there are many variable factors in the property market at the moment there are some certainties that will not change and that includes the fact that Noosa has a finite amount of stock and that much of the prestige stock continues to be tightly held.
Kirstie’s advice is that on that basis alone, when you find the right property in and around Noosa, and it is priced for the current market conditions, you need to move quickly or you may miss out.
