Time, Not Timing at Reed and Co.
Two Noosa properties, purchased decades apart in very different markets, tell the same story. Kate Cox says neither buyer needed to pick the bottom; they just needed to buy. Words by John Caruso.
In 2015, a stretched budget bought a three-bedroom townhouse with views at The Rise in Noosa Heads for $675,000, nearly double what the buyer had originally set aside for a one-bedroom unit at Noosa Blue. Eleven years on, Kate Cox, the Noosa agent who sold him the townhouse, puts its value at just under three million dollars. He never sold it. Instead, he leveraged the equity into one business, then a second, and built a life on the back of a decision that looked reckless at the time and sensible in hindsight.
“He had the courage to go for it when the market appeared slow,” Kate says.
It’s not an isolated result either. Half of Kate’s business now sits in the $2-$4 million bracket, apartments bought as investments and holiday houses rather than family homes, proof that this kind of ‘leap of faith’ has become less the exception in Noosa than the rule, for a certain type of buyer.
Nobody buying in 2015 could have known interest rates would stay low for another decade, or that Noosa apartments would become some of the most tightly held stock in Queensland. What they could see was already there: limited supply, genuine lifestyle appeal, and a market that had spent a few years catching its breath after the GFC. What changed wasn’t the location. It was everyone else’s nerve.
That’s the part of property investment Kate finds most useful to remember. The best purchases rarely look extraordinary at the time. They look like a stretch, a risk, or in my case, an ordinary two-bedroom unit, tucked behind what is now the Aldi carpark on Weyba Road. It was the 1990s and $108,000 secured a modest, holiday rental in Weyba Gardens Resort. The kind of place nobody would ever call a trophy asset. Today, $108,000 barely covers a deposit on a shed, which is either a sobering inflation lesson or a good argument for buying property whenever you can afford to.
I was reading Building Wealth Through Investment Property by Jan Somers at the time, whose central argument was that property in this country tends to double in value every seven to ten years if you leave it alone long enough to let it.
“It requires time, not timing,” Jan wrote.
I didn’t have a clear read on the market back then, and I’m not going to pretend otherwise. What I can tell you – because I looked it up – is that the cash rate through most of 1998 sat around five percent, low by the standards of the punishing double-digit rates of the early nineties. Negative gearing had been back in place for over a decade, and the capital gains tax discount didn’t exist until 1999 – none of the things that make property investment attractive were in place.
I bought anyway, mostly because the alternative was doing nothing while everyone else was doing something.
Noosa in 1998 was in the middle of a decade of steady, unspectacular gains as the region’s charm drew local and interstate interest, helped along by a council decision in 1995 to ‘cap the population’ and, by extension, the future housing supply.
I sold that apartment within ten years, and it had doubled, exactly as Somers said it would. Not because I’d timed anything cleverly. Because I’d left it alone long enough for the market to do what markets in scarce, desirable places tend to do, given enough time. That’s the thread running through my story and the one Kate tells about her client at The Rise. Neither of us had inside information, nor had we picked the bottom of the cycle with any precision, because nobody ever really does. We bought when the numbers made us a little uncomfortable, in markets other people were sitting out, and then we did the least glamorous thing possible: nothing. For a long time.
Ask most investors what the market was doing the year they bought and you’ll get a vague shrug. I couldn’t tell you what Noosa’s median prices did in 1999, or 2001, and I doubt Kate’s client who bought at The Rise in 2015 could recite the cash rate that month either. It doesn’t matter. That’s the point. Enough time in a market smooths out the noise – the false starts, the gloomy headlines, the well-meaning warnings from people who never bought anything themselves. What’s left a decade or two later is simply growth.
Kate sees the same pattern – slower market, cautious buyers, stock sitting longer than it would in a hotter cycle.
“People can’t get over fear,” Kate says, and it’s the one obstacle that has nothing to do with interest rates or government policy and everything to do with nerve.
It helps that Noosa rarely behaves like other markets when the mood’s cautious.
“Noosa never does. It stabilises in price,” Kate says.
Owners who don’t need to sell simply don’t, so listings sit rather than prices fall, which is another way of saying the panic that grips other markets tends to skip this market. If there’s a lesson worth taking from all of this, it’s that the market will always hand you a good reason to wait. Buy anyway, hold on, and let time do what timing never manages to do.
Kate Cox watches that lesson repeat itself across Noosa’s apartment and investment market, from modest holiday units to multi-million-dollar homes. For anyone weighing up whether now is the moment, her answer, backed by both her client’s result and mine, is the same one it’s always been. Stop waiting to ‘feel’ ready and just start.
