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Regional NSW outpacing Sydney for property price growth
Regional NSW is outperforming Sydney’s property market, with an influx of demand from tree- and sea-changers sending prices soaring in popular pockets.
Dwelling prices across the state have risen at almost double the rate of values in Greater Sydney, according to the latest quarterly Domain House Price Report, released on Thursday.
Sydney’s median dwelling value, based on both unit and house sales, was up 4.5 per cent year-on-year to a median of $1,012,778, while the median across the rest of the state climbed 8.8 per cent to $546,879 over the year to December.
House prices in Byron Bay saw the largest jump, with the median climbing a whopping 26 per cent to $1.15 million. It was followed by Parkes in the state’s central west and Kiama, on the south coast, which saw median prices climb by 24.1 per cent to $335,000 and 20 per cent to $1.02 million, respectively.
House prices in the holiday hotspot of Byron Bay climbed 26 per cent over the year. Photo: iStock
They were among 23 local government areas which recorded double-digit
percentage increases, with the coastal council areas of Coffs Harbour, Ballina and Shoalhaven, and inland councils of Orange, Cootamundra and Wingecarribee — covering the Southern Highlands — also among the strongest performing markets.
The exodus of Sydneysiders to the regions off the back of the coronavirus pandemic was one of the key factors behind rapid regional price rises, said Domain senior research analyst Nicola Powell.
“Sydney is unaffordable for many and we were seeing the movement of people leaving Sydney prior to the pandemic; COVID-19 has just fast-tracked that movement, ” said Dr Powell.
The rise of remote working had made it possible for more Sydneysiders to relocate permanently or part-time, Dr Powell said, while record-low interest rates and border closures had increased the appeal of purchasing a holiday home, that could also double as an investment, among well-off individuals with cash to splash.
In the Shoalhaven region, where the median house price jumped 19.4 per cent to $645,000, the number of buyers coming through open homes had quadrupled in recent months, according to Marty Stanfield of LJ Hooker Sanctuary Point.
“For the last 10 years, at a busy house you’d be averaging five groups at an open; some of our open houses now are seeing more than 20 people coming through the door,” he recently told Domain.
Chris Ryan of Flemings Cootamundra also reported stronger demand from Sydneysiders and Canberrans looking to buy in the Cootamundra-Gundagai Regional Council – where the median jumped 18.7 per cent to $308,600 – with interest evenly split between investors and tree-changers.
The demand has seen the time taken to sell a home halve from an average of three to four months to one month or, at a stretch two, Mr Ryan said. He noted one entry-level home, which failed to sell when priced at $170,000 18 months ago, recently received an offer of $190,000 within weeks of being listed.
The Shoalhaven region, which was hit by bushfires last summer, is one of the areas which recorded strong annual house price growth. Photo: Ben Mack
The smaller nature of regional property markets meant small population increases were enough to spark rapid price rises, according to independent economist Terry Rawnsley.
“In the north coast of NSW, the south coast and regional areas the number of houses for sale aren’t huge, so if you get 10 to 20 COVID refugees from Sydney that will get prices moving very quickly,” he said. “[And] it has a ripple effect for the locals.”
Price rises in regions such as Byron Bay pushed buyers further north to areas like Brunswick Heads, which in turn was adding pressure to prices in neighbouring regions and pricing out locals, Mr Rawnsley said.
The big questions remaining were whether such rapid growth would continue once international borders reopened, and how increased demand would fare if more Sydneysiders were required to return to the office.
Mr Rawnsley said the risk was seeing a fallout like that experienced after the Western Australian mining boom, when people in mining regions — where prices soared as people relocated for work — were left with mortgages they could no longer afford and saw their homes repossessed by the banks.
With many workers unlikely to return to the office full-time, Dr Powell expected regional markets in proximity to Sydney to continue to be in strong demand from city buyers. She noted as regional markets had not experienced the significant run-up in prices seen in Sydney in recent years, they were less exposed to price falls during the pandemic.