‘We love it here’: Coastal property price gains leave Sydney in the shade

The property rebound is picking up in coastal markets surrounding Sydney, and prices in some regions are now rising faster than in the harbour city.

House values across the Central Coast and Shellharbour local government areas have rebounded more than 9 per cent from their market low in early 2023, the latest CoreLogic figures for November show, and recorded stronger price growth than Sydney in spring.

Median values bounced back by about 8 per cent in Wollongong and Lake Macquarie, 5.9 per cent in Kiama and 3.9 per cent in Shoalhaven – which did not reach its trough until mid-year. All bar the latter two are now within 10 per cent of their previous price peak.

Greater Sydney house values by comparison hit a trough last January and have rebounded 13.2 per cent since. They sit just 1.8 per cent below their peak, but gains have slowed in recent months, lifting 2 per cent over spring.

CoreLogic research director Tim Lawless said price movements across coastal markets and regional NSW more broadly have been picking up, as Sydney’s growth was slowing.

“Regional NSW has been showing an acceleration [in growth], it’s very much lagged the Sydney trend and I wouldn’t be surprised if that growth continues … as we haven’t seen the same bounce back this year in regional markets,” he said.

“[But] anyone expecting to see another regional surge in housing values will probably be waiting for some time. That boom we saw [early in the pandemic] was quite spectacular but was driven by a short-term change in demographic patterns which we don’t see being repeated.”

Lawless said the balance between supply and demand had since rebalanced to healthier levels, with supply of homes for sale in markets like Kiama, Shellharbour and Shoalhaven now above their five-year average.

Meanwhile, out-of-area demand has eased, with the shift from widespread remote working to more hybrid work, Lawless added, while declining affordability has reduced the appeal of a sea change.

The rebounds have largely been stronger in locations with a shorter commute to Sydney, like the Central Coast, Wollongong and Shellharbour. Lawless expected that trend to continue.

It had been a patchy year for the South Coast property market, said Precium director and buyer’s agent Matt Knight.

“We saw prices falling fairly aggressively through to about February and March in Wollongong, and maybe until April and May a bit further south .... and the trough in the South Coast was later,” Knight said.

“Ever since then we’ve seen a bit of strengthening, and we saw a bit of rebound in activity through spring, but not enough to push prices back above where they were. It’s very much been a sideways, patchy market, some property has been selling below asking price and some selling at, with a few stronger results mixed in.”

Knight said total listing levels have crept up from the record lows that fuelled the market boom, while demand from out-of-area buyers had returned to pre-pandemic levels.

He added that demand for holiday homes and investment properties had seen a sizeable drop, as interest rates and holding costs climbed and occupancy rates for short-term holiday rentals fell. Some investors and holiday homeowners had also decided to offload properties for the same reasons, but this has been limited.

Knight suspected prices would continue to climb in 2024 as confidence returned to the market, unless there was a significant further lift in interest rates.

The Central Coast market has also proved patchy, said Coast Realty principal Stuart Gan, with mixed results across the region, rising stock levels and days on market.

“After the unsustainable price rises that occurred during the pandemic we’ve seen a rationalisation of prices ... but the positive outlook is that people who never considered the Central Coast as an option have now discovered the area, and that will be a lasting legacy of the pandemic,” he said.

Sandy Thomas in her Pearl Beach home, which is for sale.Credit: Nick Moir

Gan was still seeing a strong influx of enquiries from Sydney buyers and greater demand from owner occupiers in markets like Pearl Beach, as investor interest had eased after a softer period of holiday rental demand.

Pearl Beach sellers Sandy and Dennis Thomas swapped Sydney for the Central Coast almost a decade ago, and haven’t looked back.

“We just love it here,” Thomas said. “We have a limited number of houses in Pearl Beach and it can’t ever be built out.”

“We’ve got a lagoon out the back … it’s so quiet and natural, and it takes me four and a half minutes to walk to the beach. There are not many places that you get that.”

Walkies to the beach takes just over four minutes says Sandy Thomas.Credit: Nick Moir

It’s been a difficult decision for the couple to downsize from their four-bedroom house, which they listed with Gan late last year. The market has proved a little slow, but they’re hopeful of a good result for the contemporary home, which has a price guide of $3.8 million to $4 million.

“[Prices] have gone up quite a lot [in recent years] and more people seem to want to live here … demand was outstripping supply, but at the moment is seems to be the reverse,” Thomas said.

“Our house is unusual … and it’s at the higher range, so we never expected a quick sale.”