Byron Bay bearing brunt of regional housing boom

author-avatar By on October 06, 2021
Byron Bay bearing brunt of regional housing boom

Regions in NSW and Queensland are seeing massive house price growth and strong rental yields, as buyers from capital cities head regional to buy.

New findings from buyers' agency InvestorKit revealed that NSW North Coast regions are feeling the impact of the housing boom as prices take off, with days-on-market also dropping.

House prices across the regions have risen by an average 16.6%, with all regions seeing at least double digit growth.

Particularly, Richmond Valley - Coastal, the home of Byron Bay and surrounding areas, saw the median house price increase sharply by 27.3% from June 2020 to August 2021.

The lowest regional house price growth was seen in Port Macquarie, which still saw a 10.2% house price rise.

Arjun Paliwal, Head of Research and founder of InvestorKit, predicts that market pressure will remain intense and that North Coastal regions will outperform capital cities over the next 12 months.

"Property market pressure for the NSW northern coastal markets is currently some of the highest in the country - good news for those already in the market but problematic for prospective buyers due to the extremely high competition," Mr Paliwal said.

"Similar to the sales market, rental data in the NSW North Coast is reflecting similar intense market pressures."

For renters and investors, Mr Paliwal expects an incoming 'surge' in rental prices and demand, despite both already sitting at 'crisis' levels.

"Investors can expect a healthy gross rental yield for most of the coastal cities of around 4%, but this will fall closer to the major hubs of Sydney," he said.

Vacancy rates are 'alarmingly' low, at less than 1%, as total monthly listings dropped 38% and number of days on the market fell by 30% over the 12 months ending July 2021.

Port Macquarie and Coffs Harbour boast 'exciting' and 'rare' rental yields

The findings revealed specific housing market performance across the NSW North Coast regions over the past 12 months.

New rental listings are on the decline across the board, but particularly in Port Macquarie and Coffs Harbour where rental listings are down 35.3% and 31.8% respectively.

According to the findings, this has resulted in investors being able to expect upwards of 4% rental yield, which is both 'exciting' and 'rare' for coastal locations. 

The average number of rental listings are also down in Gosford by 28.7%; 40.6% in Port Stephens; and 37.1% in Richmond Valley - Coastal.

Gympie sees time in the sun as Brisbane buyers head north

Analysis from real estate agency Century 21 Platinum Agents revealed that roughly 85% of buyers in Gympie are from South East Queensland.

According to the Real Estate Institute of Queensland (REIQ), the median house price in Gympie was $340,000 as of March 2021.

Billy Mitchell, Principal of Century 21 Platinum Agents, said the majority of buyers were from Brisbane, the Northern Gold Coast, and the Sunshine Coast.

"Compared to the rest of the southeast, the Gympie property market remains affordable, which is attracting plenty of buyers from more expensive locations down south," Mr Mitchell said.

"House prices have jumped by about 20% over the past year, but the buy-in prices still remain achievable for the majority of potential purchasers, which is just adding further fuel to the market."

Mr Mitchell said investors are taking an interest in the area, as the vacancy rate is 0.3% - a sign of a critical undersupply, which isn't likely to change any time soon.

"Many investors are circling us now because Gympie is a sound regional area to buy in for myriad economic reasons - and it's also making financial sense to everyone else now, too," he said.

"We were a bit of a hotspot pre-pandemic. Our market was definitely heading in the northerly direction but, after COVID, it has just gone berserk."

Uptick in new listings as Spring selling season gets going

The number of listings on the market fell by 0.6% from August to September, but new listings from the last 30 days have picked up by 11.9% according to SQM Research.

Demand for property appears to be 'surging' in Brisbane as the city records large falls in listings.

Over the past month, new listings have been on the rise in Sydney and Melbourne by 3.9% and 1.7% respectively, attributed to the end of lockdowns.

Property listings have trended downwards over the past 12 months, however, with listings falling by 25.9% nationally.

The biggest falls have been seen in Sydney, Hobart, Adelaide, Canberra, and Brisbane.

Property listings older than 180 days dropped by 4.1% in September and 54% over the year to date, which SQM Research says is a sign that stock is clearing.

Louis Christopher, Managing Director of SQM Research, said there are shortages in listings across Australia.

"Demand continues to outstrip supply which is pushing up prices despite the uncertainties and restrictions surrounding Covid-19," Mr Christopher said.

Mr Christopher said that the 'imminent' lockdowns being lifted in Sydney and Melbourne should see housing listings lift over October and November.

"The expected rise in listings is unlikely to create a housing slowdown prior to Christmas as low interest rates continue to stimulate the housing market and the expected economic uplift following the end of lockdown will also likely create stimulus for housing," he said.


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Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

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