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Welcome to February,
I’m glad I missed the wild weather, storms, floods and black outs. I was in Victoria during that week experiencing dry heat and fires. Shows how we live in such a large continent with lots of contrast.
PRICES PREDICTIONS AND PUNDITRY
Last month I said I would do some research on how the local market has been faring. Some media outlets, Sydney Morning Herald in particular, have ran stories recently saying the Byron Bay property market has had its worse year in 10 years. This is not statistically correct and the story very much depends on which agent you happen to interview. Some have had a very good year thank you very much. You have to remember that the mainstream media like to sensationalise their property writing to sell more newspapers.
As you can see by this synopsis, the market has many variations even in such a small area as this. I work between Ballina and Tweed Heads but the majority of my clients are in the postcodes of 2479 – 2483 so I have concentrated on those. I subscribe to Property Data Solutions and Pricefinder. Others will get data from different sources and it will vary but I contend that the trends will be similar.
2479 – Bangalow, Fernleigh, Binna Burra
Bangalow area held value quite well in the years since 2007 and the GFC. Except for last year when it dropped 15.1%. The fluctuations before that were only a few per cent either way. You have to take into account the two amazing years of 06 and 07 when the median house price in Bangalow rose 52.6%. Sales volume also fell off last year with only 43 sales when it usually turns over around 70 sales each year.
2480 – Lismore, Federal, Eureka
This area is hard to give a general trend on as it contains two very different demographics. It has four times as many sales and an average median of only $340,000 (about half) mainly because of Lismore. It also includes Federal, Rosebank and Eureka and many rural lifestyle properties. Median price sales have remained fairly stable but turnover has dropped dramatically from 970 sales in 2007 to only 400 in 2012.
2481 – Byron Bay, Suffolk Park, Ewingsdale
In contrast Byron Bay had a fairly good year last year only falling by 2%. Byron prices have had a bit of a ride: 08-+6.6%, 09 – 17.6%, 10 +26.1%, 11 – 14.8%, 12 – 2.0%. Byron experienced a false dawn in 2010 when everyone thought the GFC was over. The Byron median price has only fallen from $780,000 in 2008 to $676,500 today, which is a drop of only 8.6%. Sales were also strong last year with 152 properties sold which compares well with previous years. Therefore media reports were incorrect inferring a disastrous 2012 when 2011 or 2009 were the real stinkers.
2482 – Mullumbimby, Main Arm, Goonengerry
Preceding the GFC, this area had a great run with price rises each year averaging over 20%. Post GFC it has still had modest rises of single figures except for 2011 with a drop of 9.5% but another rise of 2% last year. This accounts for the general increase in interest and live-ability of the Mullum area. Sales volume, fell off in the last two years from around 100 sales a year to just over half that.
2483 – Ocean Shores, Billinudgel, Yelgun
The Ocean Shores median price has stayed stable and even had a slight increase since 2007. It was $450,000 in 2007 and finished at $462,000 in 2012. I think this result may have been skewed by some higher value sales in 2483. I know from my own experience that sales were well down in Ocean Shores in 2011 and 2012. Sales volume dropped off a bit but not as badly as other areas, probably due to first homeowner interest and the various government grants.
Those interested looking at the (partial) graphs can do so  here.
Forecast
The main Australian property information service, RP Data, compile capital city selling prices daily. Median values can now be tracked like shares in a stock market. They are predicting a 10% raise in property values this year due to a few indicators. Last month, January, there was a rise of 1.2 % when a monthly fluctuation of a few points is normal. The HIA (Housing Industry Australia) clocked a 13% rise in new home sales in the last three months. They also noted indicators like share prices for building industry stocks, which are experiencing rapid rises. Boral and Leighton Holdings are up 60% and 50% respectively in the last 6 months. The full article for that is here.
There are no statistics for sentiment but most buyers, sellers and agents are guessing that the market bottomed last year. The only sector that is still languishing is the small rural acreages. I am working for a client now in that sector and am surprised by the sheer number of good homes on 5 and 50 acres listed between $800,000 and $1.5M. It is truly a glut of choices.
INTEREST RATES
The RBA decided to hold the cash rate at 3% on Tuesday. Many are still predicting further cuts as the year progresses. Standard variable rates are now around 5.45 - 5.65% and fixed rates are 5.25 - 5.35%. If you have a loan over $250,000 and you are not close to this, you should contact me to see what we can do.
COMMUNITY DEBATES
I was away for the first community debate held on Australia Day weekend at the Byron Community Centre. I think these things will be great and communication can only improve things. I was able to listen to the online feed courtesy of BAY - FM. Well done to all who got this together.
A couple of things. The debate seemed to be side tracked from Holiday Letting and handling tourism to what to do about New Years Eve. I was also still dismayed by the polarisation enforced by a few entrenched voices who took anything said by the more conservative side of the panel to be hissed and booed. This does not help finding balanced outcomes.
One possible solution to the rowdy holiday let problem is to encourage more of the yoga retreat, health spa, spiritual seminar type visitor to the shire and veer away from backpackers and day trippers. This is Byron's strength and can be easily enhanced by allowing more venues to cater to this crowd. Meditators and yoga practitioners do not go rampaging drunkenly through the streets at midnight. I hear a few of the present councillors are behind this proposal and I agree it is the best strategy.
The other interesting idea was that we get people trashing the town mainly because Byron looks trashed already. If we were able to make the town more presentable and user friendly we would not get so much negative behaviour. That makes sense but then we come back to the problem of finding the money to do that.
NOT SUCH A GRAND DESIGN
A recent piece of media trivia was a Grand Designs Australia segment featuring Byron Bay. The episode aired in November and featured a 3 story house being built in 21 Brownell Drive, Wategos Beach. The episode was a classic education in how not to extravagantly over capitalise in a flat market.
Sydney based developer Max Iocopetta spent $3.325K on the block of land in 2010 and then spent $4M on the build, blowing out the $2.5M budget. The property sold in December for $5.6M giving the feisty owner some not very favourable exposure and a character building experience that cost him close to $2M.
The other Lifestyle Channel property show “Location, Location, Location.” is also looking to film a Byron Bay segment. I was partially involved when they shot a segment here last year but since a sale did not eventuate it did not go to air. If you, or someone you know, need help finding a Byron property and would not be intimidated by being followed around by a camera, contact me and I will put you in touch with the producers.
YEAR OF THE SNAKE
Welcome to the year of the snake and Chinese New Year starts on the 10th - Kong Hee Fat Choy!
This 2013 year of Snake is meant for steady progress and attention to detail. Focus and discipline will be necessary for you to achieve what you set out to create.
Hope everyone has a great 2013 and achieve what you set out to create.
Michael
0428 555501
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