The latest data from CoreLogic indicates a shift in buyer interest from regional areas back to urban environments, resulting in a decrease in demand for homes in once popular lifestyle destinations such as Byron Bay and the Mornington Peninsula. This shift potentially challenges the price gains these areas experienced during the pandemic. Parts of northern NSW’s Richmond hinterland and areas of Victoria’s Mornington Peninsula have seen significant price decreases, reflecting the effect on holiday rental markets. Increasing living costs and higher interest rates are affecting discretionary household spending, which could slow the pace of tourism-centric economies. As economic conditions become more challenging, some holiday homeowners may need to consider selling due to decreased rental income or personal financial difficulties.
Pandemic-induced real estate booms in regional markets and high-priced city markets are witnessing a reversal due to increased borrowing and living costs. Additionally, a partial reversion of the pandemic migration trend is dampening demand for certain regional properties. As the number of people moving back to cities from regional Australia has risen by 10.1 percent, rental demand and vacancy rates in some areas are feeling the impact.
Rental income for coastal homes in northern NSW’s Byron Bay, Brunswick Heads, and Ocean Shores have seen drops between 1.8 percent and 6.3 percent in the past year. Likewise, rents in Southern Highlands areas, including Bowral, Burradoo, and Moss Vale, have significantly dropped, with vacancy rates quadrupling to 4.1 percent.
Yet, not all regions are witnessing a return-to-city trend. Areas like the Sunshine Coast and the Gold Coast continue to attract interstate migrants, with a 14.9 percent and 7.8 percent increase in the number of people moving to these areas, respectively.
Home prices in Richmond hinterland areas such as Lismore Heights, Lismore, and Girards Hill have experienced significant drops of 30% to 31.3% in the past year. Coastal towns in Richmond, including Byron Bay, Lennox Head, Brunswick Heads, and Ocean Shores, have also seen substantial declines in home values. On the Mornington Peninsula, prices in Baxter have fallen by 10% over the past year.
However, homes on the Sunshine Coast and Gold Coast are likely to fare better in this downturn, despite some value drops over the past year. Noosa’s home values fell by 14.9% but are still 35.8% higher than pre-pandemic levels. Similarly, dwelling values in several Gold Coast suburbs have fallen over the past year but have shown an upward trend in the past three months. Despite the current declines, these areas would need to see further substantial falls to completely erase their pandemic gains.
Blog
Other articles
Australia’s Housing Market in Transition
Australia is seeing a significant decline in approvals for attached homes, such as apartments, townhouses, and semi-detached homes. These types of housing are essential for creating more sustainable urban development, using existing infrastructure like public transport, schools, and healthcare services.
Rents Ease After 5-Year Boom
CoreLogic Australia’s economist, Kaitlyn Ezzy, reported a recent slowdown in rent increases, a notable shift after a 39.7% surge in rental prices over the past five years.
Are Luxury Suburbs Losing Their Shine?
House prices in some Sydney suburbs with medians of $2 million or more have declined by up to 7.5% in the past three months due to affordability issues and interest rate uncertainties, CoreLogic reports.
How Are Borrowers Coping with High Interest Rates?
Recent data shows that four out of five borrowers have tightened their budgets to manage home loan repayments amidst high interest rates.
What Makes New Homes So Attractive to Buyers?
Property views for new homes have surged by 9% this year compared to last year, with inquiries soaring by 27%. In general, views for all properties for sale have risen by 7%, and inquiries have increased by 11%.
Why Affordable Homes Are Hot
Securing a home has become harder due to rising prices and reduced borrowing capacities. Many people are now looking for more affordable properties.
Is Victoria’s Property Market Meeting the Needs of First-Time Buyers?
In the first three months of 2024, more foreign investors bought properties in a new Victorian development than local investors did. A report from a major bank shows that fewer first-time home buyers are purchasing new builds, putting pressure on affordable homes in the city.
May Housing Market Report
Mid-sized capitals in Australia are experiencing notable growth in home values. In May, home values increased by 2.0% in Perth, 1.8% in Adelaide, and 1.4% in Brisbane.
Estimating Your Super before Retirement
Determining how much superannuation you’ll need for retirement hinges on two main factors:
How Cash Rates Drive Housing Dynamics
The transmission of monetary policy through cash rate changes to mortgage rates is a critical aspect of understanding economic dynamics, especially in a country like Australia with a significant proportion of variable-rate mortgage holders.