The real estate market is booming right now, with strong demand across capital city and regional markets putting upward pressure on prices. Anecdotal evidence suggests there are property market pockets where houses are selling for $100,000 to $150,000 above asking price.
REINSW data showed that property values in regional NSW rose about seven per cent in 2020, around double the gains recorded in Sydney. And CoreLogic data for 2020 revealed regional real estate sold faster than property in the cities – by three days.
Nowhere is this more evident than NSW coastal property markets.
The north and south coast regions of Australia’s first state are experiencing strong property price growth as ABS data reveals a population drift to regional towns, thanks to COVID-induced remote working.
All this activity has fuelled the coining of the moniker ‘Vespa’ by Australia’s pop demographer, Bernard Salt, who said the ‘virus escapees seeking provincial Australia’ were changing the shape of regional real estate.
The Newcastle property market has jumped 9.1 per cent to a median house price of $660,000, according to realestate.com.au, helped along by a $10,000 grant from the local government to lure business owners to the area. Local agents have said the level of demand for property – houses and units – is unprecedented. A Ray White agent has said that Sydneysiders have come into town with bigger budgets and are outspending locals.
“A 1257 sqm Port Macquarie home near the beach and with rainforest-like surrounds has a $980,000 price guide — the same price as a one-bedroom apartment on the market in Queens Park [in Sydney’s eastern suburbs],” an REA spokesperson said.
Tight supply levels are adding to the pressure on upward prices.
In Coffs Harbour on the mid-north coast, prices have grown almost 10 per cent in a single quarter as cashed up southerners seek a coastal sea change. Heading further north, Bangalow, inland from Byron Bay, claimed the title of the second most-searched NSW suburb on realestate.com.au in July 2020, according to REA’s Nerida Conisbee. It has seen the strongest growth in 20 years, increasing by 1,281 per cent since 2001, while Byron, home to celebrities such as Chris Hemsworth, has increased 30 per cent to September 2020, according to REA’s Nerida Conisbee.
Heading south to the NSW south coast and demand is pushing prices, on average, 20 per cent above expectation. This market is being helped along by infrastructure spends, with a $400 million Berry to Bomaderry Princes Highway upgrade along with recent NBN rollouts and a range of road improvements and bypasses that have cut the commute from southern Sydney to the region to just 2.5 hours.
Areas such as the picturesque Mollymook, Milton and Ulladulla as well as Gerringong and Bomaderry are now palatable options for a Sydney commuter who can do three or four days from home and just one or maybe two commuting back to the Sydney office.
The coastal idyll of Austinmer, about 70 kilometres south of Sydney, jumped by more than 40 per cent in the past 12 months, to January 2020. It was a year for the regional markets as they outpaced the capitals for price growth.
However, once again, it is the affordability factor that is driving strong interest in regional NSW property. “Instead of a three-bedroom townhouse in Castle Hill, with a $975,000 price guide, buyers could opt for a luxury five-bedroom home at Albury with an infinity pool and sweeping views of the town,” Conisbee said.
While there is a considerable level of FOMO driving activity in this market, it’s important to remember that some of the key factors are likely to remain in place for a while, so that means conditions are likely to be similar for at least a year or so.
The central bank has flagged interest rates are unlikely to move in the short term while the economy continues its recovery. Governor Philip Lowe has a target inflation rate in sight and with the last figures coming in lower than hoped it seems likely that the Board will hold for a little longer. Additionally, unemployment figures need to improve before the RBA will consider a move on rates.
The information provided in this article is general in nature and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information with regard to your objectives, financial situation and needs.