Spotlight On Market | April 2018 With Tara Torkkola
There is an abundance of data available when it comes to market performance, and it can be difficult to cut through the various news sources to reach signal, rather than noise.
When it comes to reporting on the zeitgeist of the property market, real estate agents know that local knowledge plays a significant role in sense-making across all of the data that is available. Tara Torkkola takes us on a tour of some of the towns in Byron Shire and the greater Northern Rivers Region and we use her insight into the data that exists so that you can match your buying strategy to the right location.
THE BIG PICTURE
Looking at 9 critical points of comparison, there is a strong 5-year story of growth across all of the major towns in Byron Shire. Combining that with rental and buying demand that is comparable or above state-wide levels, it is clear that the region is attracting both buyers and tenants. A sustained trend indicating upward pressure on population is always good for property owners.
The 10-year growth trend incorporates the tough market that we saw in the region in the wake of the GFC. While the capitals were thriving, Byron experienced a winter that was missed by the central Sydney markets. However, while the capital market appears to be normalising now, the spring seems to have set in up North and we are seeing steady growth, steady returns and steady demands across the region.
For those seeking to purchase in and around the towns of the Byron Shire, there is a benefit in understanding the numbers as well as the specific local drivers of growth in each town. Knowledge is power, and our aim is to empower buyers to match the right region to their buying strategy and enriching that with some of the local pavement insights gained at the coal face of the market.
BUYING IN BYRON BAY
Byron Bay is the service centre of the wider region and so it makes sense that as the region has blossomed recently, the concentration of growth has been felt in the commercial centre. The combination of low-interest rates and scarcity has told lifestyle purchasers to buy up in Byron Bay, and we see that buyer demand has defeated rental demand, with investments returning an average yield of 2.6% – the lowest across the region.
If a property is priced well then there is a strong sense of desire from buyers, particularly those with a view to living in the property now or in a few years, so the emotional connection between property and purchase is still playing a strong part in decision making. Competition is high for the right property, where the story of value is connecting with the lifestyle narrative and the market of buyers can align that with the price.
For properties that are coming on that may be priced above the market, the aspiration (or desperation) of recent seasons has slowed. The buyers market is educated about where the value points are in Byron Bay and where properties are outside of that window. It is now difficult to create the level of activity and competition that really creates those premium, record-breaking results.
Particularly in the Byron Bay market, we are seeing interest from Sydney buyers, who are savvy from their experiences in that highly competitive market. They are educated and prepared to compete – so it is important that agents are taking the time to get the marketing right and represent value to attract the attention and buyer pool that the property deserves.
Our work in understanding the motivation and drivers of value in the current buyer cohort is imperative to our storytelling as agents and helping non-locals find their right property is the kind of inside running that can allow for a premium price on any property.
Byron Bay stays true to its lifestyle brand, which still emphasises the natural beauty and a potential for capital gain. The schooling options and the lifestyle aspects of the town remain very appealing to families, who find it very difficult to compromise on the Byron Bay sea change dream, once they have committed to it.
Buy in Byron Bay if…
The capital growth and community/lifestyle drivers in the Byron Bay market make it ideal for those who are making a lifestyle decision or for those who intend to buy now and move later. There is obvious potential to take advantage of negative gearing where capital growth continues to appreciate. In addition, there are still a few precincts in Byron Bay that are yet to reach their potential. As we see more and more of Byron Bay edging towards that $1.5M mark, we naturally see these undeveloped pockets transition also.
BUYING IN BRUNSWICK HEADS
The most telling numbers from the Brunswick Heads stack is the high level of both rental and purchasing demand. While the 5-year growth figure is not as compelling as the Byron Bay figure, what the numbers suggest is that Brunswick Heads may be primed for a serious growth spurt. Some additional research indicates that less than 2% of the sales market has turned over in the past 12 months, which means that supply isn’t just limited relative to the number of buyers, but there is also quite a limited number of opportunities to purchase, with very little stock available.
High level of demand across both buyers and renters has created something of a mini-market in the tightly held Brunswick Heads. Buyers are challenged by prices which have increased solidly over the last couple of years, and this town on the coast is a great alternative to the Byron Bay Market.
The town boasts many great sized blocks in the golden grid that have development potential similar to the old part of town in Byron Bay. The beach and lifestyle appeal of Byron Bay is there, however, Brunswick Heads enjoys a lower cost – lower risk buy-in as well as offering slightly higher rental yields. Its location makes the town more accessible to buyers from up North, particularly if they visit often. We often see the same buyer groups weighing the advantages of Byron vs. Bruns, with geography often settling the debate: Queenslanders fall to Brunswick Heads while the Sydney buyers prefer Byron Bay.
Buy in Brunswick Heads if…
Brunswick Heads stands out as a great alternative to Byron Bay, and one that may be about to surge. The lifestyle it offers is very similar to it’s more expensive counterpart in Byron Bay, with comparable beaches and great choices for eating and entertainment.
BUYING IN MULLUMBIMBY
Mullumbimby may seem like a modest performer with the lowest median house price of $711,000, but with rental yields over 4%, investors can expect to be positively geared while for locals, Mullum is a viable place for locals to get on the property ladder.
Mullum is on the map now! It has had a great increase in the last 18 months, it could be plateauing out a bit as the prices have had a big increase in the shortest amount of time compared to even Byron Bay. I put this down to the fact that Mullumbimby has been discovered.
Previously, out of town buyers didn’t know about Mullumbimby, now they love it. Mullumbimby is so sought after as you can still get a stunning home where you can walk into town for a great price, so its attractive to people who are priced out of Byron Bay and out of town buyers looking for a property where they fall in love with the home at an affordable price compared to the cities.
The vibe of the town, its unique character and the older homes that people love. It’s a charming town and is flowing with young families looking for an alternative healthy lifestyle. The streets are alive with more great places to eat, and the town is growing.
Buy in Mullumbimby if…
Anyone who loves the laid-back lifestyle, with a good sense of community, will want to put roots down in Mullumbimby. For those seeking to invest, the increase in Mullumbimby rents provides good cash flow while annual growth trends and demand indicate that there may still be room for gains.
BUYING IN OCEAN SHORES
The data around Ocean Shores tells the story of the turtle, not the hare. A solid performer, Ocean Shores tells the story of steady growth, steady demand, and steady return.
Ocean Shores is becoming more and more popular. Its a coastal town with a lot of elevation and sea views, great breezes and a fabulous option for buyers who want a good home for what can sometimes be up to half the price of what you would pay in Byron Bay. Savvy investors take note that rents are on the increase here too.
The location of Ocean Shores provides easy access to the Gold Coast, and increasing flights to Coolangatta from Domestic and International destinations means that the area has opened up to workers who fly in and out and for those commuting to the Gold Coast. Lifestyle wise, its a hop, skip and a jump to Brunswick Heads and Mullumbimby too, with all those towns have to offer.
Buy in Ocean Shores if…
Investors looking for growth, and owner occupiers on a budget wanting to stay in the Byron Shire and make the most of the nearby Gold Coast.
BUYING IN SUFFOLK PARK
Suffolk Park remains an exclusive pocket in the region, with premium homes reaching high median sale prices amidst high levels of growth. Like Byron Bay, the area is attracting demand from families and aspirational buyers with an appetite for the lifestyle.
Suffolk Park, in Baywood Chase and Byron Hills, is great buying for what you get for your money, so days on market are low and demand is high. Families are attracted to this area for its community feel and again there is a lot of growth to be had there. Beachside Suffolk Park is buoyant, and on a recent sale, we have just seen nearly 30 inspections in a week and four buyers competing to buy a property well above the price guide. The buyers felt there was little choice of good family homes so supply is low in Beachside Suffolk Park.
What are features attracting buyers to Suffolk Park? A home away from home. Suffolk Park to many is ‘what Byron use to feel like’. Dog people love Suffolk Park with the dog beach right there and if you live a simple life you rarely even need to leave Suffolk Park. Shops, bakery, supermarket and the beautiful long beach are just footsteps away.
Buy in Suffolk Park if…
Anyone also considering Byron Bay should be comparing the value in Suffolk Park. Some of the out of town buyers only look at Byron Bay in their search and it is worth broadening your search a little to see what other areas you may love just as much.
Any local will tell you that the perception of value in property can change from street-to-street, even block-to-block and so if you are looking at buying – or if you are curious about the value of your property in the current market, it is important to ask an agent for property specific advice.
So, once you have found the location that matches your buying strategy, we can help you find the right home. If you are seeking to buy, the time to act is now. APRA has let a bit of slack into the lending regulations as the banking royal commission continues it’s tour de force. If you have a finance approval but have been trigger shy, the time to act is now, in case history follows it’s usual course and consumers are affected by finance industry reform.