Northern Rivers property market holds its breath for buy back decision

A perfect storm of rising mortgage rates and government indecision has all but frozen house sales in North and South Lismore since the floods. Here’s why.

Rob Horder principal estate agent at PRD Northern Rivers

The Lismore property market is all but on hold as home owners wracked by flood and government indecision are forced to play a waiting game.

Eight months on from the disaster, residents are still sweating on home insurance payouts to see whether they can afford to move to higher ground or restore their homes.

All the while, investors wait in the wings.

There still hasn’t been enough data since the floods to assess the true loss of property value in flood affected areas of the Northern Rivers, but the sales figures tell a story.

“There hasn’t been a property sold in North or South Lismore for over $350,000 since the floods,” PRD Northern Rivers principal estate agent Rob Horder said.

Rod Horder believes the uncertainty about what the government will or won’t do is impacting the market. Picture: Dan Peled/Getty Images

While properties in the surrounding high ground have kept their value, the anticipated rise in demand for housing surrounding the flood plain is yet to be realised.

“You would think the market for property on higher ground would have increased after the flood, and there is definitely more interest in that higher ground, but the sales haven’t reflected that,” Mr Horder said.

The interest rate hikes slowed down prospective buyers and investors in Goonellabah, East Lismore and Lismore Heights, Mr Horder said, with the market frozen in time while buyers wait to see what the government will do around buybacks and land swaps.

“There are people looking to move to higher ground, but from what I've seen in the last few months since interest rate rises, we’ve probably seen a 10 to 12 per cent decline in market values throughout the area,” he said.

“They (buyers) were hesitant and put things on hold because interest rates were rising.”

But now the interest rates have settled, people in the market are coming to terms with the increases and more people are throwing their hat in the ring, Mr Horder said.

Rob Horder, principal estate agent at PRD Northern Rivers, and sales associate Shinae Mascolo. Photo: PRD Northern Rivers.

Goonellabah’s median house prices in 2020 was $430,000, with annual growth that year at 31.9 per cent. The price hike has eased to 24.1 per cent in 2022 - “which took the median price to 720,000 (this year) since interest rates have risen”, Mr Horder said.

“(It’s) levelling out now, and buyers are entering the market again.

“The number of people attending open homes has increased in just the last couple of weeks.”

Mr Horder believed the uncertainty about what the government will or won’t do is impacting the market.

“A combination of people (are) still waiting to see what the government is doing with buy backs or land swaps or potentially waiting for insurance claims to be processed,” he said.