2022-11-14 GC Agenda - Item 4 - Attachment 2 - Appendix 13 to Attachment 1

NOOSA SHORT STAY ACCOMMODATION ECONOMIC & SOCIAL ASSESSMENT



EXECUTIVE SUMMARY
BACKGROUND
On July 31, 2020, Noosa Shire Council (Council) adopted a change to make short term accommodation an
inconsistent use in the Low Density Residential (LDR) zone as part of the Noosa Plan 2020 (NP2020) in response
to rising concerns over the impacts of short term accommodation on residential amenity, housing supply and
affordability. Existing use rights mean that those that had short stay prior to the planning scheme amendments
would still be able to offer short stay accommodation.

AEC was engaged by Council to undertake an economic and social impact assessment for input into its monitoring
report on the provisions in Noosa Plan 2000 as they relate to short term accommodation, tourism and housing
supply. This report assesses the recent, current and potential impact of the relevant scheme provisions on short
stay accommodation and the economic and social impacts of maintaining and/or extending these provisions.


MARKET ANALYSIS
The following key findings are evident from the analysis of relevant datasets:

•   COVID-19 and subsequent border closures and lockdowns had a profound impact on visitation to Noosa,
    including the supply of, and demand for, short stay accommodation.

•   However, the number of visitors to Noosa has recovered strongly post-COVID-19, with the extent of the
    recovery being much more positive than in SEQ over the past two years since the adoption of NP2020 and
    record numbers of visitor nights being recorded in the March quarter 2022.

•   The share of paid visitor nights in rented dwellings has increased sharply in Noosa over the past year when
    compared with the historical average, with nights spent in short term rentals in January to September 2022
    being the highest ever over that period and record occupancy rates in August/September 2022.

•   Total dwellings available for short term rental in Noosa increased by 5.7% between April 2020 and October
    2022, from 4,754 dwellings to 5,025 dwellings.

•   Looking at supply across LDR zones, the number of dwellings used for short term accommodation increased
    by 12.1% from 846 dwellings to 948 dwellings (12.1% increase).

•   The increase in dwellings available for short term rental between April 2020 (just prior to the introduction of
    NP2020 making short term accommodation an inconsistent use in LDR zones) and October 2022 suggests
    that NP2020 has not detrimentally impacted on market supply to meet tourism demands.

•   In terms of residential dwelling sales volumes, the property market cooled in 2019 and early 2020 in Noosa
    but activity jumped from late 2020 for both attached and detached dwellings.

•   While changes in Noosa’s residential dwelling sales volumes have tracked relatively consistently with SEQ,
    median sales prices in Noosa have recently increased substantially more than in SEQ with the increase
    between year ending March 2020 and year ending March 2022 being 56.8% (compared with 26.9% for SEQ).

•   The average sales price for a detached house in Noosa in YE March 2022 was 159% higher than in SEQ and
    210% higher than in Queensland, while the average sales price for an attached dwelling was 186% higher than
    in SEQ and 204% higher than in Queensland.

•   There has been no noticeable negative impact of NP2020 on demand or values, with people wanting to buy
    more dwellings in Noosa and at considerably higher prices.

•   Strong demand has, however, worsened housing affordability for Noosa residents and workers.

•   Rental data reveals that Noosa has experienced a consistent annual decline in rental bonds lodged since 2012
    in addition to significant increases in median weekly rents (at a faster pace than in SEQ), indicative of a
    demand/supply imbalance, with this market imbalance worsening since September 2020 as median weekly
    rents have escalated from around $500 per week to $680 per week as at September 2022.



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