Tree change cities where property prices have skyrocketed

“We’re really seeing momentum slowing down, but prices are really holding up. That affordability will look different to a local, but there’s still that pull of a Sydneysider because of it [medians] half price,” Powell said.

The ability to work from home has allowed Sydney residents to continue searching for local housing, which has changed demographics and the outlook for property prices in those areas, she said.

Byron Bay Shire was one of the few regional councils to lead the downturn outside of Sydney.

Byron Bay Shire was one of the few regional councils to lead the downturn outside of Sydney.Credit:Destination NSW

Most regional markets have peaked and will see a significant slowdown in annual change, Powell said, but it would not fall below pre-COVID levels.

“It is very unlikely that these markets will go back to where they were. We’ve seen a shift, and that shift is here to stay.”

She said councils like Byron, Bellingen and Kiama led the downturn just as they did during the upswing.

“These markets peaked first and experienced stronger growth rates. Byron has been the heartbeat of regional growth.”

Terry Rawnsley, KPMG’s regional economist, said most regional areas continued to see annual house price increases because of sustained demand.

“Further population growth is coming through. The economy will be stimulated even more. The underlying fundamentals are still driving the housing market,” said Rawnsley.

Because many of these areas are still relatively more affordable than their urban counterparts, house prices are unlikely to return to pre-COVID levels now, despite the broad housing contraction, Rawnsley said.

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“What the pandemic has brought about is a major reappraisal of housing in regional areas. Housing has become more expensive across the board,” he said.

Most of these regions are unlikely to revert to pre-COVID prices due to continued demand and low rental vacancy rates, he said.

“Population increase, demographic shifts will hold more of their post-COVID levels instead of swinging back to their pre-COVID levels.”

Rawnsley said the region’s housing markets would ultimately move more slowly for reasons such as longer wind-downs and would see a lagged impact from interest rates in the coming quarters.

Property prices in Kiama have started to reverse.

Property prices in Kiama have started to reverse.

But for some regional councils, like Byron Bay, the heat has come out of the market, Rawnsley said, as buyers priced in and looked elsewhere.

“They had this really strong 2021 where people were migrating out of the cities. Last year, some of that heat came from the market,” he said.

Damien Smith, Ray White’s Byron Bay sales director, said the combination of a surge in prices coupled with flooding and eight months of interest rate hikes helped median house prices fall in the 12 months to December.

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“This will absolutely add to Byron LGA [house prices] come from. House prices have returned 20 to 25 percent in parts of the county. Mullumbimby was hit hard,” Smith said.

He said half of Byron’s buyers are still from Sydney, but they have more bargaining power: “You’ll see it takes a little less for sellers to get to the next spot.”

Elsewhere, Professionals Armidale’s Kyle Garrahy said while the local housing market has calmed down since the peak of the pandemic, there are still more buyers than properties.

“We sold houses 30 percent faster than we advertised them. That goes for every agency in town. We sold more than we added to the market,” Garrahy said.

Tight vacancy rates below pre-COVID levels have also attracted investors and boosted demand, he said.

https://www.smh.com.au/property/news/the-nsw-tree-change-towns-where-house-prices-jumped-last-year-20230123-p5cetr.html?ref=rss&utm_medium=rss&utm_source=rss_property Tree change cities where property prices have skyrocketed

Brian Lowry

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