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Once a sleepy surf town, Byron Bay’s property market has been attracting an unprecedented level of interest from Sydneysiders to Hollywood celebrities.
While the past 12 months have cemented the true resilience of the Australian property market, the pandemic has also created a seismic shift among Aussie buyers who now prefer lower-density housing and regional living as lifestyle factors increasingly drive purchase decisions, the inaugural market insights report from property group Atlas revealed.
As such, regional markets have emerged from the shadows, with NSW’s Byron Bay leading the charge.
“What was once a pipe dream for Sydneysiders to reside in the sleepy surf town has now become a viable reality for many, with four in 10 buyers coming from the harbour city,” Christine Mikhael, Atlas’ chief performance officer, explained.
Apart from Sydneysiders, the surf town has also attracted several A-listers, including Avengers star Chris Hemsworth and his wife Elsa Pataky, who famously built a $20 million mega-mansion in the area.
According to Ms Mikhael, the increasing competition has had recent buyers willing to pay premiums to secure a property.
Based on figures from realestate.com.au, Byron Bay’s current median house price sits at $2,293,730 – a huge jump from last year’s $1,900,000. Meanwhile, median unit price currently sits at $870,000, rising from last year’s $825,000.
Ms Mikhael said prices may continue to climb at a rapid pace this year as buyer demand strengthens further, supported by record-low interest rates and government incentives.
Looking ahead, CoreLogic’s head of research, Tim Lawless, opined that Byron Bay’s growth will have a “ripple effect” on surrounding areas like Brunswick Heads and the hinterland.
“Byron Bay is becoming an extremely expensive and exclusive market, attracting lots of people from capital cities. I look at this market and think, ‘How much further can it go?’”
“It has already seen extraordinary value gains, and affordability constraints will mean that we might see surrounding areas increase in value. For example, Brunswick Heads, Ballina and the Hinterland areas are all becoming extremely popular,” the head of research said.
However, this ripple effect could eventually result in demand bouncing back to metropolitan areas as “capital gains in one suburb move on to others”, he said.
“As people purchase fringe properties for an increased price, the sellers of these properties will have received large capital gains and may choose to purchase property in metro areas. This will then increase metro prices and so on.
“Even though outer suburbs are increasingly popular at the moment, the metro regions are highly connected to activity on the outskirts and will increase property prices overall,” Mr Lawless explained.
“If they haven’t seen values rising as quickly as regional markets, then at least the temporary affordability will attract buyers back.”
At the end of the day, this period of strong performance from regional markets will ultimately narrow down the huge affordability gap that has been witnessed between regional areas and metro areas for a long time, he concluded.