27 Jun 2019

Have you invested in Noosa? You may not be able to holiday-let your property out for much longer

Noosa property owners could find themselves banned from renting out their holiday homes and the value of their investment significantly impacted if a local council plan is implemented, according to a local agent.

Under a draft planning scheme called the New Noosa Plan, the local council would restrict short-term letting to zoned areas, effectively banning any holiday letting outside of those areas.

Suburbs affected would include Noosa Waters, Sunrise Beach, Peregian Beach and the centre of Noosa behind Noosa Junction, encompassing hundreds of investment properties that are currently rented out for short-term or holiday use through real estate agencies or platforms such as Airbnb and Stayz.

Properties that fall within the zones allowed to continue holiday letting would have to comply with codes, such as providing a certain amount of car parking. Houses would have to provide two on-site car parks, while apartments over 90 square metres would have to provide two car parks.

Outside of the zoned areas, only those properties that have been holiday letting since before 2006 would be allowed to continue. Those that have been holiday let after 2006 would have to make an application to be allowed to continue.

The Noosa Shire Council prepared the draft in response to complaints arising from the sharp growth of the short-term online rental market in the Noosa shire, but according to local agent Dan Neylan of Dowling & Neylan, those few complaints could cost Noosa investors a lot of money.

“I know clients who holiday let their home over the peak seasons to help fund their home loan because they’ve paid premium prices to get into these areas,” he said.

Mr Neylan said not only would some investors be left high and dry without an income, the values of the properties in these areas were likely to be affected.

“What’s going to happen is, if you’re outside of these boundaries and you currently short let, you won’t be able to keep doing that,” he said.

“Think about it — if you can’t short-term let your property or someone wanting to buy it can’t do that, it’s going to shorten the market; it’s going to knock investors out of those areas, and it’s certainly going to impact the value of properties in those areas.”

He said many investors, particularly those from Sydney and Melbourne, bought property in Noosa and rented it out as an interim solution before making the permanent move themselves.

“They secure a property in Noosa while they’re still working, they holiday here to establish themselves in the community, and they short-term let it the rest of the time for a few years,” he said.

“But because they have their primary residence in Brisbane, Sydney or Melbourne, they can’t afford to hold it without the holiday income.”

Russell Green, former deputy mayor now town planning advisor at RG Strategic, said there was a significant economic impact that needed to be considered.

“With short-term accommodation, they’re spending on average $180 to $190 a day. Permanent rentals, on the other hand, spend about $50 a day. A lot of people don’t understand how significantly it will impact their investment,” he said.

“It’s a reaction to a perceived problem, but at the moment in the town planning industry we don’t believe they’ve got it quite right.”

Mr Neylan said it was not as simple as putting the affected properties in the permanent rental pool.

“For the current owners who short-term let, it’s my experience that they sell it or lock it up, because their primary reason for buying it was that eventual integration into Noosa,” he said.

“I’m of the view that by restricting the holiday use in certain suburbs, it will deter investors from purchasing in those areas — and that will definitely impact property values by shortening the market of purchasers in those areas,” he said.

“Noosa continues to have strong price growth and we still see property sell at strong prices – but it doesn’t take much in a regional market like this to change that.

“A lot of the big properties and higher sale prices are purchased from interstate, bought with discretionary money, and that will be impacted.

“I don’t like the idea of councils taking away the rights of freehold property owners. It’s an extreme measure to deal with a minority problem where the few ruin it for the many.”

Mr Neylan said the complaints were mainly about noise, excessive parking, bins and those issues not being dealt with appropriately by property owners.

“We all recognise that Noosa is protective of its lifestyle and environment and there’s a concern that with the airport opening we’ll have too many visitors which will impact the environment here with too much traffic et cetera,” he said.

“But it’s a balance. Rather than this plan, let’s put in some local laws, a licensing system and make requirements for these properties to be run in a professional manner. Professional management with an agency would take away 99 per cent of the issues.”

The major community consultation phase of the New Noosa Plan closed last week.

SOURCE ; https://www.domain.com.au/news/have-you-invested-in-noosa-you-may-not-be-able-to-holiday-let-your-property-out-for-much-longer-842963/

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