Byron Bay tops strongest property price growth in Australia as coastal, regional house prices surge

The once quiet coastal town that’s become a hotspot for the rich and famous has topped the charts for more than its celebrity status.

Byron Bay is seemingly losing its quiet coastal vibe it used to be known for as the rich and famous flock to the dreamy small town for its relaxed Aussie lifestyle and pristine beaches.

In 2020, the “celebrity hotspot” has drawn in the likes of Zac Efron with his new Aussie girlfriend and Nicole Kidman who’s shooting a new TV miniseries on its shores, while locals complain of increasing crowds and traffic.

According to REA Group chief economist Nerida Conisbee, Byron Bay is the property hotspot of the year, seeing the strongest property price growth across the whole country in 2020.

Musician Natalie Bassingthwaighte and her husband recently bought up in the area, joining the likes of Chris and Liam Hemsworth. She and he husband paid around $2.15 million for a property in Ewingsdale, 7km inland fringing Byron Bay, in November.

The town’s housing prices have increased more than 40 per cent in the past 12 months, with a median house price of around $1.83 million.

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Byron Bay has seen the highest property growth in Australia. Picture: Supplied

Sunshine Beach in Noosa on the Sunshine Coast is next in line, with house prices in the booming small town growing 33 per cent in the last year, with an average housing price of more than $2 million.

An unexpected boost was seen in Sarina in Mackay, a rural coastal town in central Queensland, and Penguin in Tasmania’s Central Coast, both eyeing an increase of around 32 per cent, with homes averaging less than $400,000.

A Perth coastal suburb, Mandurah, and a suburb in the hills area of the city, Kelmscott, saw a jump, as well as Ashmont in Wagga Wagga.

Meanwhile, Whyalla in South Australia and Dodges Ferry in Hobart had price growth of more than 27 per cent.

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Byron Bay saw the strongest suburb growth across Australia in 2020. Picture: Supplied

Ms Conisbee told news.com.au there has been a clear shift to properties outside of the CBD as buyers look to coastal and regional areas after the 2020 pandemic shift.

She said the rise in regional properties could be because of the increase in first homebuyers entering the property market while employment has seen Australians shift away from the capital cities.

Ms Conisbee said that first homebuyer activity is “red-hot at the moment”, while investors have “cooled off”.

“House-and-land development is very strong because of all the first homebuyers,” she said.

First-time buyers were spurred on by the 5 per cent deposit scheme which took off in January and the state government incentives which came through to support the economy through the recession as well as the record-low interest rates, she said.

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Homebuyers are opting for relaxed regional lifestyles as they move away from cities.

Ms Conisbee said the boost in the property market is seen across the board on the back of low interest rates and government support during the pandemic.

“Interest rates are incredibly low and that’s allowing people to borrow more,” she said. “Rules to accessing credit is changing so it’s easier to get loans.”

November marked a turning point because of the announcement of several vaccines as well as a new APAC trade agreement and opening up of domestic borders, Ms Conisbee said.

“The property market is bouncing back very quickly. It’s national whether you’re in a capital city or regional area,” she said.

“The downturn in pricing was very short-lived. In many places we didn’t see any downturn compared to prior to the pandemic.”

Homebuyers are moving to regional and coastal areas with larger properties. Picture: Supplied

There are promising signs for NSW buyers with the removal of stamp duty which is set to come in mid-2021, which might slow the market down until the new policy comes into action, Ms Conisbee indicated.

“First homebuyers got the stamp duty concessions anyway but come June when the stamp duty changes are made in NSW they will also get a $25,000 bonus,” she added.

Sydney continues to top Australia’s capital city property growth.

Out of all the capital cities, it’s no surprise that Sydney properties are at the top of the property price growth in Australia, which also dominated the top property sales of 2019.

Canberra, Hobart and Perth markets are also strong in 2020 and Melbourne is surprising seeing growth despite the prolonged lockdown this year.

“Conditions in Perth are improving rapidly, but there is still a lot of catch-up to be made given the prolonged weak conditions in that market,” she said.

There’s been a slight growth in units compared to houses even though rental markets have eased due to the impact the COVID pandemic has had on employment.

More people are moving out of cities, possibly because of shifting work arrangements that don’t require them to be close to the CBD, which has also impacted rental markets in the cities.

“Rental market conditions remain weak in the aftermath of the coronavirus crisis, so it is surprising to see fairly strong unit price growth across capital cities,” Ms Conisbee said.

“Buyer confidence has definitely returned but rental demand is lacking.”