Australia’s regional property markets have been exploding in recent months, with brokers struggling to keep up with demand.
Prices have been rising at double the rates of the capital cities, and brokers at the frontlines of the property boom have spoken to Australian Broker about their experiences in the last few months.
“It’s crazy at the moment,” said George Smith-Roberts, 2018 & 2019 Australian Regional Broker of the Year, who owns Smik Home Loans in Lismore. “At the moment it’s non-stop inquiries. It’s more work than we can handle. We are at the point of turning down clients now.”
The Northern Rivers has experienced the biggest growth in Australia, with prices rising 20% in twelve months and 39% in Byron Bay specifically.
“It’s not so much people moving into the area as it was last year: now its mainly investment,” he continued. “The numbers of investors compared to owner-occupiers has increased significantly.”
“We had a really big spike last year, which pushed the general house price past the threshold for First Home Buyer Scheme. The average house price now is $450,000 and above, which makes the scheme irrelevant in the Northern Rivers region at the moment.”
“We’re seeing investor activity come in and mop up the rest as and when it comes onto the market. Usually, it’s being bought pretty quickly for rental, because rental is in such high demand.”
Prices in Austinmer, on the Southern Coast but within commutable distance to Sydney, have spiked by over 40% as tree changers adapt to hybrid working and leave the New South Wales capital.
“My buying activity includes the Illawarra, the northern Wollongong suburbs, down through Kiama, into Shoalhaven and the far South Coast,” said Matt Knight, buyer’s agent at Precium. “The market has been strong since mid last year in the Illawarra and since Christmas in the Shoalhaven and far South Coast. The stock levels are incredibly low, historic low levels in some cases.”
“Vacancy rates are incredibly tight and have been locally since the bushfires put 400 to 500 into rental properties. Since COVID, we’ve had another influx of people leaving cities. Prices are rising rapidly because demand is outstripping supply.”
The same change from First Home Buyers to investors that was seen in Lismore has also taken place on the South Coast of NSW.
“Recently, since Christmas, we’re seeing investors jumping in because they’re seeing rents rise. In 2020, it was First Time Buyers. Some of my suburbs in the South Coast went below half of a percent in vacancy rate, almost statistical zero.
“We’re talking about markets where there are normally dozens, if not a hundred, spare properties, and they went to two or none. Investors are starting to jump on the bandwagon because they see rents rising.”
The property boom has seen real estate professionals working harder than ever before.
“Since Spring of last year, it’s been very busy,” said Knight. “And since Christmas, it went into overdrive. I’ve basically done 60 hours a week since Christmas without a break.”
“It’s been a good time for business, but it hasn’t actually been easy buying. It’s been a frustrating time to be in business, because when you have lost of clients screaming at you and you have no good stock to show them, you actually don’t do very many deals. We’ve been working hard scrapping to get ahead of houses.”
“Last year, it was great because everything I did was off-market, because everyone was nervous about COVID. This year, no one wants to sell off-market. We’re in markets where there is no stock and one property will hit the market in an area that people like: take Vincentia.”
“On the hill in Vincentia, ocean view, there’s about 15 streets. There have been hardly any listings for about the last 8 months. So when a property hits the market, you will have 30, 40, 50 people go through it, and will have 6, 7, 8, 9 offers. You’re scrapping to try and buy houses.”
The strength of the auction market is also contributing to the price rise.
“We’ve seen auction results consistently between 10% to 20% above price guides. I’ve been trying guide clients in that regard pre-auction and it’s tricky, because they’ll see something that they want to sell in Wollongong for $1.5m, and I’ll tell them that the last four auctions that the agent ran sold 15% above the price guide, so my assessment is that it’ll sell for 15-20% above. Sometimes, it then sells for 25% above and we still don’t have enough money.”
“It’s hard getting clients to listen to that and give you a maximum bid that’s so high, so they’re often still in denial, and you do the prep work, go to the auction and then lose.”