Coffs Coast property boom and the housing affordability challenge

Coffs Harbour is a tourist city but hospitality workers are one of the casualties as Sydney money pumps up the local property market. What’s happening and how to fix it.

Booming house prices on the Coffs Coast are set to continue - fuelled by Sydney people buying ‘sight unseen’, according to an industry heavyweight who has briefed local real estate agents on the situation.

Real Estate Institute of NSW (REINSW) chief executive officer Tim McKibbin said the heated housing market showed no signs of abating, adding that government schemes designed to make property more affordable often only contributed to the challenge.

Mr McKibbin was special guest at the C.ex club at Coffs Harbour on Tuesday when some 40 local estate agents, principals and owners gained insights at an all-day roadshow.

Headline numbers show the median house price in the Coffs Harbour local government area has increased by 26 per cent in the past 12 months - outstripping Sydney which recorded a 21 per cent hike.

Rents in Coffs have also surged, with an 11 per cent jump (compared to two per cent in Greater Sydney).

So-called ‘Covid refugees’ have fanned the flames in the Coffs market.

Real Estate Institute of NSW (REINSW) chief executive officer Tim McKibbin at C.ex Coffs. Picture: Chris Knight

“We were all instructed to work from home in the early parts of lockdown. And with that instruction, we discovered that we could effectively work from home,” Mr McKibbin said.

“And once that realisation came the next obvious question was, ‘where do I want home to be?’

“You look at places like Coffs Harbour and you realise very quickly I think that the lifestyle that’s offered by Coffs Harbour is excellent.”

While surging prices are good news for people with skin in the game - those who already own their home - there’s angst that some Coffs Harbour residents are being squeezed out of their own community.

“The difficulty that the industry is facing right now is in many respects the frustration of people who are struggling to find somewhere to live,” Mr McKibbin said.

“People from Sydney that are coming into the area are making it very difficult for the locals, particularly in areas like hospitality (where incomes are traditionally lower).

“Those people are being pushed out of town and that is having a social impact on the community.”

It’s a point seized upon by local advocates like Emma Belcher.

Ms Belcher, vice-chairperson of the Housing Matters Action Group, says the situation is at crisis point and wants to see government intervention.

Mr McKibbin said while assistance for first home buyers was necessary, he cautioned that some well-meaning schemes served only to fuel the market.

“The response that we see from government, in relation to affordability, is to assist people to compete in the market now,” he said.

Sandy Beach's 'Golden Mile' is a dress circle for those chasing the vibe of a seaside village. Picture: Chris Knight

“While we support assistance being given to first home buyers, and there’s a variety of initiatives there, you are not going to solve an affordability problem by increasing demand. And that’s what’s happening in many of the solutions offered by government.

“You will never solve a supply problem with increasing demand. It really is economics 101.”

While the local candidates for the seat of Cowper in the May 21 federal election have explained their housing policy, local and state governments also have a role to play.

Sawtell with its leafy eat street that is First Avenue is always a desirable location for home hunters. Picture: Chris Knight

“The process that development has to go through to navigate its way through the DA (development application) process is very challenging, very expensive,” Mr McKibbin said.

“It is regularly the case that the development application process will take many months longer than the actual construction of the property. So that needs to be remedied.”

While debate about interest rates (the RBA raised the cash rate by 0.25 per cent on Tuesday), negative gearing and metro flight to the regions such as Coffs Harbour have all been raised, Mr McKibbin argued the solution to making property more affordable was straightforward.

“The only way you solve it is to bring more property into the market,” he said.

REINSW marketing manager Louise Moule said the roadshow at the C.ex club was one of 18 to be run across the state - and part of the exercise was to ensure that local agents met their continuing professional development requirements.

Real Estate Institute of NSW (REINSW) marketing manager Louise Moule at C.ex Coffs. Picture: Chris Knight

Forum participants were urged to up their ‘digital literacy’ - especially given that some investors are now buying all but blindly in the Coffs market.

“Most people want to be able to look at the property, wander the streets, look at the facilities that are in the immediate area to see what they have access to - that is the normal way that people buy property,” Mr McKibbin said.

“But I know that there were people in Sydney that were buying property without seeing it other than on the web.

“The competition for property in Coffs Harbour (is such) that people were prepared to buy it without viewing it physically.”