Opportunities for clever buyers as prices fall in Australia's most popular seaside regions

Buyers hoping to snap up a seaside property are in luck after new data revealed prices have declined in the most expensive oceanfront regions.

According to the latest Domain House Price Report, regional local government areas such as Byron and Kiama – Australia’s most expensive regions – recorded price falls of close to 20 per cent.

Byron posted a median house price of $1.37 million, down 16.5 per cent year-on-year, while Kiama was $1,312,500, down 18.5 per cent.

Other regions, including Surf Coast in Victoria and Noosa in Queensland, also saw price falls. Surf Coast’s median was $1.31 million, down 10.3 per cent year-on-year, and Noosa was $1.25 million, down 2.7 per cent.

Ray White Group chief economist Nerida Conisbee says while house prices are growing in most capital markets, the movement is varied in regional Australia.

“When we look at individual towns, we can see a distinct trend,” she says. “If the town is near the beach, it is more likely to be seeing price declines. Inland regional areas are performing a lot better.

“If you look at what happened during the pandemic, a lot of people bought beach holiday homes and it pushed prices up to incredible levels in many places. As interest rates rose and international travel became an option again, owning a holiday home became less attractive and more expensive to hold.”

This means clever buyers on the hunt for a property by the water are now in the perfect position to buy, Conisbee adds.

“If you missed out during the pandemic and you thought prices were too high for a holiday home, I think now is a good time to have a look around,” she says.

$4,200,000

16 Shirley Street, Byron Bay NSW 2481

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However, Conisbee warns buyers that purchasing a holiday home may come with some concerns after the NSW government identified as many as 90,000 short-term stay properties that could be turned into long-term rentals in a bid to ease the shortage of rental properties in the state.

“Local councils are cracking down on Airbnb and short-term rental properties that are being left vacant, particularly now that there’s a tight rental market,” she says. “This extra bit of due diligence is adding pressure to holiday-home owners and people thinking of purchasing them.”

Despite this and the decline in prices, Peter Yopp of Byron Bay Real Estate says “appetite is still strong”.

“It’s not that people aren’t interested in the region; prices are just returning to a level of normality,” he says.

“The last six weeks have seen a pick up in activity … but the six months before that was fairly slow. Everyone was adjusting to the rate rises and adjusting their price expectations.

“Appetite for [property] is still there but the biggest hurdle at the moment is buyers’ ability to borrow. We’re dealing with buyers [who have] solid incomes and money in the bank but can’t borrow as much as they used to anymore.”

SOLD - $2,295,000

8 Seaview Street, Kiama NSW 2533

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At the height of the pandemic, these seaside regions recorded some of the strongest price growths, surpassing capital markets along the way.

By the end of 2021, Kiama was up 50.8 per cent year-on-year to $1.01 million, and Byron was up 47.8 per cent to $1.7 million. 

During the same period, Surf Coast and Noosa’s median house prices cracked the million-dollar mark, with Surf Coast up 43 per cent to $1.4 million and Noosa jumping 32.2 per cent to $1.15 million.

“It’s been an adjustment to come back to … we had some of the largest growth during the pandemic but now we’re coming in line with the rest of the marketplace,” Robert Moore of Ray White Kiama says.

“We’ve hit a low point and I think we’ll maintain that for a little while, but I definitely think there’s more room for growth in Kiama … it’ll be a gradual or a plateaued rate of growth instead, rather than running rapidly, like what we saw during the COVID period.”