‘It’s a special place’: NSW tree-change towns where house prices rose most

NSW regional house prices have reached a record high median $760,000, but the pace of gains has slowed due to higher interest rates and a return to CBD offices.

The median only rose 0.7 per cent – or $5000 – in the June quarter, Domain’s latest House Price Report, released on Thursday revealed. Still, almost every council area outside of Sydney recorded growth.

It was led by Moree Plains where the median house price jumped 16.3 per cent in the year to June to $348,750. That was followed by Broken Hill (up 13.5 per cent) and Forbes (12.8 per cent).

Domain chief of research and economics Dr Nicola Powell said the regional property market in NSW would continue to draw buyers chasing lifestyle and affordability.

“The regional location in NSW is always going to have this draw. It’s going to have a drain away from Sydney,” Powell said.

“You have record prices in Sydney and a record cash rate, so the affordability steer is there and for some it might mean a regional move and that is why we’re seeing a slow burn of prices rising,” she said.

She said many council areas neighbouring popular tree and sea change locations were continuing to benefit from priced out buyers who were chasing affordability, such as Yass Valley, which picks up demand from Canberra, rose 12.5 per cent to a median of $900,000.

KPMG regional economist Terry Rawnsley said regional house prices in NSW had reached new peaks as buyers were still attracted to its lifestyle but more importantly its affordability.

“It’s probably that ripple effect of people coming out of Sydney, being priced out of Sydney, then people in Wollongong being priced out. Instead of going one train station down the line, people are moving towns,” Rawnsley said.

He said house price growth had slowed due to higher interest rates and a fall in buyer demand.

“We’re back to those market fundamentals of what locals can afford to pay. Higher interest rates are impacting households’ borrowing capacity,” Rawnsley said.

“But we’re seeing higher income people move into these areas further away. They’re bringing their higher purchasing power than others.

In Byron Bay, where house prices rose 9.3 per cent in the year to June, Pacifico Property’s Christian Sergiacomi said although some properties have been reselling for less than the 2021 peak prices, others have been reselling higher, especially if they are turnkey.

For example, two townhouses in the Asana development that sold for $4.5 million and $4.45 million in 2021 during the market peak have resold for $4.6 million and $4.8 million, he said.

“It’s more about the type of product that people are prepared to pay for, something that is complete, doesn’t need the question mark of a builder or a renovation, they are more likely to buy it knowing what they’re getting, knowing it’s complete,” he said.

He is still fielding enquiries from Sydney and Melbourne buyers, albeit not at the same volume as during the boom, and said there is a lot of trading happening among locals too.

“There’s a guy that sold at Wategos, and he bought at Coopers Shoot. And there’s people selling in town for $4 million and buying in Suffolk Park for $3 million and reducing their mortgage a little bit,” he said.

He said Byron Bay’s warm weather was a drawcard for capital city buyers, compared to options such as the NSW South Coast or the Central Coast.

SOLD - $4,600,000

2/27 Marvell Street, Byron Bay NSW 2481

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“It’s obviously a special place with how you feel when you do the lighthouse walk, or you walk along the beach, or you sit up the front and watch the whales.”

Yass Valley Property’s Andrew Curlewis said buyers had been moving out of Canberra to the more affordable Yass Valley, where prices are up 12.5 per cent in a year.

He thought buyers could find a four-bedroom house on 700 square metres for about $750,000 and enjoy a rural lifestyle with access to schools, healthcare and a close community.

“When you’ve got a large wealthy population such as Canberra within an hour away, that’s obviously going to impact your market,” he said.

As well as Canberra buyers, locals have been trading and some investors are purchasing from further afield because of the capital growth. Some Sydneysiders have been drawn to the area because of the cool climate wineries.

But first home buyers have been thin on the ground, he said, as high rents make it hard to save a deposit.

“The top end of the market, $1 million plus, is moving very well. So people with money have still got it, people that don’t are finding it pretty tough,” he said.

Although he thought prices had come back slightly since the lockdown-era peak, prices are higher than where they were pre-COVID, he said.