Coastal property riding a boom

House prices in regional NSW have surged in the last 12 months, as city folk flee the urban bustle in favour of a slower pace of life.

James McCarthy is capitalising on the housing boom in Broulee, on the NSW south coast. Picture: Supplied

House prices on the NSW south coast have soared by more than 17 per cent in the past year, as city folk opt for a sea change.

Data released by CoreLogic shows an aggregate increase of 11 per cent across regional NSW in the past 12 months, compared with a 2.8 per cent increase in Sydney.

But homeowners on the south coast are cashing in the most, with prices soaring 17.4 per cent since February last year, followed by 13.7 per cent in Shoalhaven and 12.9 per cent in the Dapto/Port Kembla area.

South coast real estate agent Craig Hadfield sold a 40-year-old house in Currarong last month for more than $4m, setting a record for the tightly held beachside village north of Jervis Bay. “It was completely unexpected,” he said. “We had no market indications that it would sell for anything over $2.5m. It was virtually a knockdown.

“The highest price for the suburb was $2.35m two years earlier, but that was actually two houses together.”

CoreLogic head of research Eliza Owen said towns such as Eden and Bega were also booming, led by an increase in first-home buyers.

“The growth in the south coast of NSW was led by more affordable regions such as ­markets in Eden and Bega,” Ms Owen said.

“This makes sense given the increased participation of first-home buyers over 2020, who usually pursue dwellings at a more affordable entry price.”

Ms Owen said the market performance in NSW was “impressive”, and flexible working arrangements were behind the move to rural areas.

“The south coast of NSW has long been a popular destination for retirees and sea-changers, with Illawarra and Wollongong being particularly popular,” she said.

“However, over the course of 2020, where remote work has been normalised through the pandemic, regions even further from major cities have become particularly popular for their lifestyle appeal.”

James McCarthy, 39, and his partner Katie decided to capitalise on the boom when they ­noticed a surge in demand for houses in their home town of Broulee.

“We bought the land for $360,000,” Mr McCarthy said. “I built a house on it and originally offered it to my neighbour for $495,000 two years ago.”

Their neighbour declined and the couple are expecting to get “a minimum of $800,000” when they list it this week.

They own another block in the same area, which has doubled in value in three years.

“We can say we are going to double our profit, it’s a pretty crazy market around here,” Mr McCarthy said.

A mismatch between supply and demand is a central factor pushing prices higher, according to Core Logic research director Tim Lawless.

“Housing inventory is around record lows for this time of the year and buyer demand is well above average,” he said.