Spotlight On The Market | MARCH By Luke Elwin
To understand the Byron Bay market, it is important to throw our net a little wider and look at Suffolk Park, Broken Head, Coopers Shoot and Ewingsdale as well as Byron Bay.
There is a diverse experience when you granulate the market down across these areas that comprise the greater Byron Bay market and so it is really important not to look too heavily into online statistics or news reports which may not quite grasp all that complexity.
SUPPLY AND DEMAND
Drawing a broad brush across the 2481 postcode, we can take a look at the volume of sales across the region and compare the months of March, July, October year-on-year as well as looking at the total number of sales.
What is clear from the numbers is that our market has been affected by low stock levels for the past few years, but early indications of 2018 indicate that this may be normalising.
What we have seen over the past few years is that sales prices have increased, while sales volumes have decreased. It is a classic supply and demand influence that has seen Byron Bay growth levels among some of the best in the country, which is great news for property owners as well as for those who have purchased.
The median home price in town now sits at $1,467,500.
Summer shoppers were once a big driver for the Byron Bay market but we are seeing turnover more evenly spread across the year. The reasons for this are interesting as it represents a real break with traditional thinking around marketing property in the Byron Bay region.
1. Buyers are shopping on their mobile phones more than anywhere else. This phenomenon sees the marketplace open to anyone, at any time of day, on any device, and regardless of the season. The loss of this seasonality is probably just another example of how the internet is impacting the way that property is sought and purchased, everywhere. Figures from realestate.com.au indicate that 70% of buyers seek property information via a mobile device or tablet. Property is now in our pockets and buyers are notified immediately when new stock is coming to market.
2. For out of area purchasers, we aren’t seeing the necessity of a summer pilgrimage. Air travel is more affordable than ever before and Brisbane is 2 hours away, thanks to the finished highway and Tugun bypass. The pattern that our agents are seeing is that people are here for holiday and they may return two, three, or four more times before they start looking at property, offline. For most out of area buyers, when they see something they like online, it is only a $150 return flight or a 2-hour drive to view it. Our agents are observing that this is pattern is increasing year on year.
3. When people talk about ‘Summer Shoppers’ for property in Byron Bay, they forget the local market. For Byron Bay First National, around 50% of our buyers are either long-term or new locals, who don’t need to rely on making special trips over the summer.
So, while the holiday market has been disrupted, there are observable peaks and dips all over the year – we just aren’t seeing the relationship between summer and out-of-towners that we would have expected over a decade ago. As for all Australian markets, it is likely that spring and summer will still have more sales than autumn and winter, however, the gap is closing.
RUMOURS OF COOLING HEELS
There are hype and talk of the Sydney market coming back significantly in 2018 from what was very high. Yet the cooling hasn’t reached Byron Bay and I would expect that there are some local factors that will insulate Byron Bay from the impact of Sydney’s great level-off.
Each year for 3 years there has been less property sold in Byron Bay but we aren’t seeing a drop away in demand. This strain on supply has pushed prices upward in Byron Bay and there is no reason to suspect that this demand will ease to a point where it affects the balance of the market.
That said, our market has definitely normalised. The panic of “buy-now-before-prices rise-again” has settled down, as the experience has shown that lower levels of supply aren’t the same as an exhausted supply, but very few markets can sustain hype around ‘scarcity’ over a long term.
Prices have held, buyers might be taking a little more time to decide and they are not panicking if they miss out. My read on this is buyers are now conditioned to a strong market and are not reacting to the fear-of-missing-out, they have adjusted their buying strategy and a balance has been reached, which is a positive thing for both sides of the transaction.
BANKS AND REGULATORS
One of the factors held out to be responsible for the easing of the Sydney property market is the Federal Governments restrictions on foreign investment. We are asked a lot how that has impacted the local market and perhaps this is due to Byron Bay being perceived as a ‘holiday’ destination. The truth of it is that in the last two years, our office has had a grand total of two sales that required the approval of the Foreign Investment Review Board, so the reality is that these changes have had no impact in our market.
Banking and finance regulator, APRA, has been tightening the reins on investment lending. A strategy supported by Treasurer Morrison’s May 17 Budget. The controls have decreased the appetite of some investors and we have observed an impact in the sub $800,000 market especially.
STAMP DUTY REBATE
Fortunately, at the same time as the APRA restrictions, we have the stamp duty rebate making a comeback so this has balanced the demand for sub $800,000 properties.
BYRON BAY SMART BUYS
With the median price in town now approaching $1.5M, there are fewer people who can afford to establish themselves in town.
However, there is still smart buying in the surrounding towns and we are seeing growth trends as more buyers are seeing value in areas such as Lennox Head, Skennars Head, Ballina, Mullumbimby, and Ocean Shores.
We are seeing new locals establishing themselves in these areas as well as locals re-locating because of the value proposition.
THE BYRON BAY FIRST NATIONAL FACTOR
Whether you are on the buying or selling side of the transaction, the single most important factor you need to align to the market is your intention, and how the progress of the transaction relates to your goals.
It is a big part of how we do business. We take the time to understand the market, beyond statistics and we do that because our people have deep roots in Byron Bay.
The information we gather, in the form of marketing performance, inspections numbers, price indications, and offers, is done to inform our clients, so that each decision they make is data-driven and made with confidence.
ONE WORD MARKET SUMMARY FOR MARCH: Normalised.