As we head into winter I can’t believe the heat, the heat, the heat!
Regular readers will know I am not one to pump the market, but Byron Bay real estate is experiencing a serious surge. The last time I saw our local property market in this state was in 2003.
The question is, how long will it last? We usually run 12 – 18 months behind the Sydney trend and Sydney has been running double-digit growth since 2013 and has probably now reached its peak. This time we did not start to follow the Sydney trend, I believe, till late last year. Sydney and Melbourne are not the same and should not be linked together. Sydney had a 15% growth to April 2015 while Melbourne only had 5%.
As reported last month, Byron Bay real estate now has a median price higher than Sydney. Byron is $936,000 compared to Sydney $914,000. Downsizing from Sydney is now just a sideways jump to Byron. Recent data shows the top two postcodes delivering us new Byron residents are Pittwater (Sydney Northern Beaches) and Randwick. Anyone interested in a good giggle and an insight into what these people look like should Google or Vimeo “Avalon Now”.
Those southern sellers are usually empty nester baby boomers looking for lifestyle property and somewhere new to nest. Byron Bay is #1 on their list. If we discount any global or national meltdown, I predict, one to two years of very strong demand for real estate in Byron Bay and the Northern Rivers.
I personally do not like an overheated market. I am sure some listing agents do as it means quicker turnover, but then it’s impossible to find new listings. As a buyer’s agent, I much prefer a relaxed orderly market where I have time to do the research and advise my clients into something that is good for them. I am not comfortable saying to a client they should jump on something quickly just because it will not be there next week, even though that may be serving the client in some cases.
Two stories that illustrate an overactive real estate market
In Sydney, an unassuming three bedroom, brick home in West Ryde just sold $1.71M. Remarkable on its own but then take in that it sold for $940,000 in February 2014 – nearly doubling in just over a year. The 961 square metre corner block did have duplex or small unit development potential however.
In Melbourne, A Balwyn home sold for nearly $1M over what was last paid for it just eight months earlier. Four bidders drove the auction $960,000 over the previous price paid for the 5 bedroom home that the owner had not even moved into yet.
People say it’s a bubble but I do not like to use that term. A bubble also needs over development of unwanted property and/or a collapse in the rental market. I do not see either those two factors on the horizon – especially for property in the Byron Bay region.