Regional NSW December 2017

The month in review: Regional NSW

By Herron Todd White
December 2017

Southern Highlands/ Southern Tablelands

At the beginning of the year the call was that demand for properties would remain strong close in to the townships across the Southern Highlands at a price point up to $1.5 million.

From a review of sales for the rolling 12 months to 1 November 2017, as predicted the townships of Bowral, Moss Vale and Mittagong have been stand out performers, with access to infrastructure and price point being the main drivers of that growth. The stand out for the year though has been Wollondilly Shire with a 26% growth in average price as we close out the 2017 year.

The observation here is that staged subdivisions such as Bingara Gorge (Lend Lease), having been established now for a number of years combined with a realisation by purchasers of direct access to the Sydney freeway, has put these precincts in the minds of buyers looking not only at affordability but lifestyle considerations.

That being said, the last quarter saw a flattening in the volume of sales and more stock coming to market across the region, resulting in a shift in sentiment to more of a buyer’s market. The rental market across the main townships remains tight with a lack of stock driving rent increases of a minimum 10% over the past 12 months. The Highlands property market is heavily influenced by what is happening in Sydney and historically lags that market by six to 12 months.

Looking forward to 2018, with the range of land releases coming on line and proposed throughout the region, we would expect to see a slowdown in the rate of growth for the next 12 months and an increase in the number of sales.

As has been mentioned in earlier versions of the Month in Review, the announcement by the NSW Department of Planning that Wilton Junction has been designated as a priority growth area to accommodate up to 16,500 dwellings across the 4,175 hectare site located off the M5 East Freeway combined with the recent announcement of up to 1,500 new land lots at South Moss Vale (Chelsea Gardens/Coomungie), will see continued major scale development activity across the region over the medium term.

NSW Central Coast

At the beginning of 2017, we predicted that it would be a hot year for the NSW Central Coast region where we thought that coming off the 2016 Christmas break, a chance would be provided to take a breath, plan and regroup – but not so.

Even before the revelling had quietened down, the new year kicked off with a bang in the local market – it just took up after the Christmas break where it left off.

Anyone following not just the local market, but the broader market would have been forgiven for thinking of or predicting a slowing down of the market. We have certainly been talking of the end of another cycle in property when we will again see the market slow, prices come back a little before stabilising and picking up again. That’s how it has always been, but not so during 2017.

Local real estate agents are divided on where we are heading with some seeing their (and their clients) good fortunes continuing, others just remaining hopeful of the hot market conditions continuing, while others being certain in their resolve of it not lasting much longer. A few (a lot actually) were saying that the only thing they are certain about is that they don’t know!

For our part, the market just seems to keep rolling with each new reporting period throwing us a few surprises as to what’s moving and by how much.

To us, the signs were present that the market would continue growing locally while ever buyers with the will to enter the property market or buyers looking to expand their portfolios are being squeezed out of the Sydney market. The reason for this of course was that property prices on the Central Coast remained reasonable compared to the Sydney market.

But…. as we approach the year’s end, we are noticing a few subtle hints of the market showing signs of a slowdown that only the keenest of observers (like us) are seeing. These signs include a slight increase in queries from lenders and insurers, more deliberation by lenders, the unfortunate return of mortgagee sales, a spike in family law valuations and real estate agents actually having time to attend property inspections with us.

Throughout the year, suburbs spoken about earlier as having been overlooked for the more desirable locations continued to increase in popularity. Older houses with new owners are being renovated, modified and extended. These areas include Narara, Niagara Park and Wyoming.

In previous years, Umina Beach, Woy Woy and Ettalong Beach were the focus of attention. This continued throughout the year, with sale prices being achieved no longer being met with a gasp. We do think though that at some stage, these suburbs will meet a period of price correction – we’ll discuss the reasons for this next year.

We thought the popularity and activity in 2017 radiating towards the northern end of the region would occur. It did, with buyers looking to get in early on the next big thing. We also thought (once again) that Budgewoi, Buff Point, Lake Munmorah, Gwandalan and Summerland Point may become popular. They did, but not as much as anticipated.

We also said the happenings in and around the Gosford City Centre would draw plenty of opinion and we also got this right.

Developers have come back to town with numerous projects completed during the year. Some very good quality developments were completed during the year and as a testament to this, sales rates and prices proved that quality is recognised and rewarded. Commencements seem to be well managed meaning that the potential for a glut of units on the market simultaneously should be avoided, but ever the cautionary ones, we wonder whether the sale prices being achieved at present are sustainable.

In report card terms, we don’t think we were far off the mark with our preview of what to expect for 2017.

Primarily, we predicted market growth would continue across the region during 2017, experiencing a high demand from local and Sydney buyers being pushed out of the Sydney market only to land here. As expected (and without too much thought in all honesty), the Central Coast market continued to improve on the ripple effect of Sydney prices.

The first half of 2017 saw continued growth in most localities of the coast, with some focus on the northern end, but a little less than we thought in these historically more affordable areas. The northern end proved to be a popular region for first home owners, many of whom took the opportunity to buy in the more affordable market and profited during 2017.

July 2017 saw the implementation of stamp duty exemption legislation (this isn’t something we predicted) and an increased stamp duty for overseas investors. While the latter hasn’t significantly impacted the Central Coast market, the stamp duty exemption provided first home buyers with a little more confidence to get their feet in the door. The overall implications of this were not drastic, as the investor market remained strong during 2017 despite the changes.

While the Central Coast remains a popular alternative for Sydney buyers, if auction clearance rates are any indication, we are closing out the year with a little less urgency in the market than earlier in the year with many starting to anticipate some rest and relaxation over the coming Christmas period. Nevertheless, the market remains strong.

NSW Mid North Coast

As predicted we had another strong year throughout the Mid North Coast with most residential market segments performing well. In the first half of 2017, we observed a continuation of the previous year’s strong capital growth in residential dwellings, units and vacant land. However with a significant amount of vacant land being released and new dwellings available for purchase, the prediction of a slowing in the growth towards the end of 2017 came to fruition. This was exacerbated with the federal budget announcing changes to residential Tax Depreciation Schedules and banks tightening up on investment lending, which in turn reduced investor activity.

We are still seeing well presented and well located residential dwellings selling quickly for near full price, whilst the other more standard dwellings in some cases are sitting on the market and seeing some price reductions to achieve a sale. This is an indication that some investor impulse buying has cooled and is likely due to increasing vacancies and flat rents off the back of all the new construction.

With additional new subdivisions being released on the outer fringes of Port Macquarie and Lake Cathie, vacant land values are increasing at a slower rate than in the first quarter of 2017. Construction of new dwellings is continuing to be a popular option with the monthly average number of development applications increasing over the past quarter from 89 to 95 (source: Port Macquarie Hastings Council).

So how did we go? In January we predicted “During 2017, it is expected that Port Macquarie will continue to remain one of the fastest growing regional centres in NSW”. CoreLogic reported that Port Macquarie saw 9.3% growth in comparison to Newcastle (12.7%), Bathurst (6.5%), Dubbo (5.3%) and Orange (4.7%) which puts Port Macquarie as one of the best regional performers for the year.

We therefore believe that our optimism for the region in 2017 was well placed and we wish everyone a very merry Christmas and a prosperous new year.

NSW North Coast

Lismore / Casino / Kyogle

At the start of the year, it was postulated that the residential market for 2017 in the Lismore area would continue to firm following the last three months of 2016 where the demand for good quality residential stock improved and real estate agents were desperately seeking new listings. Richmond and Kyogle Shires were expected to remain relatively steady.

Looking back on the year, demand for quality real estate and the estimated selling period of available stock exceeded expectations, particularly during the latter half of the year. The common wail amongst real estate agents from east to west was “we need more listings” as well established and presented properties were quick to be picked up by financially approved purchasers. This was not limited to owner-occupiers and investors but also included first home buyers who had to compete for the available residential stock.

Rural residential real estate markets have remained steady, although not at the same demand level as residential with the exception of well-presented properties with highly valued features such as expansive views, creek or river frontage and high quality improvements which enjoy a greater enquiry level.

It was also noted that there were more incidences of residential property within the Lismore City area breaching the $600,000 – on 11 occasions so far in 2017 according to RP Data sales details. Cue sound of proverbial glass ceiling shattering.

Generally, properties within the $250,000 to $350,000 price bracket were particularly popular in Lismore City for 2017 although superior quality product in the $400,000 to $600,000 bracket improved significantly, thanks in part to the still low interest rate environment.

The flood of March and April 2017 did cause some pause in the market for South Lismore and North Lismore, however during the latter part of 2017, there was a hint of some positivity returning with good quality accommodation having a main floor level above the hypothetical one in 100 year flood level.

For Casino and Kyogle, houses in the $200,000 to $300,000 range received most of the action, however, we did notice an uptick in enquiry for larger rural residential and farmlet properties in the general rural areas close to Casino and Kyogle.

As stated, all potential purchasers were scrambling for the same real estate, whether they were upgraders, newcomers to the area, investors or first home buyers. In fact some first home buyers even contemplated purchasing new build, i.e. buy land in a new estate and build, which could be around $450,000 plus in total outlay.

In summary, we can give the real estate market for 2017 in Lismore, Casino and Kyogle a positive narrative with interest experienced across the board in all property types, however with the main emphasis being that properties needed to be well presented….and when that is in place, the real estate product flew off the shelf quickly!

Ballina /Byron

Residential markets across coastal areas of the north coast continued strongly throughout 2017, with further increases in values experienced throughout most areas. In recent weeks, local agents in Byron Bay have reported a reduction in enquiry which may indicate that the market is stabilising. This could be partly attributed to a slowing Sydney market, as a significant portion of buyers of Byron Bay properties over the past 24 months have been from Sydney.

Lennox Head and Ballina remain strong across most market segments, with three sales of beachside properties transacting in excess of $3 million in Lennox Head since September. Also of note is a recent sale at South Evans Head for $1.225 million which represents the first sale in excess of $1 million in Evans Head. Low levels of stock across most areas continue to place upward pressure on values.

Looking back at predictions made early in the year for the Byron Bay Shire, we can confirm that we were right in what we thought was to come – interest rates remained low with limited supply to market which saw strong growth in the coastal resort towns of Byron Bay and Lennox Head and the surrounding towns.

The market was driven by a lack of supply and strong demand coupled with record low interest rates. Strong interstate money and local buyers trading up were the biggest players in the market. Interstate money has traditionally been poured into the coastal resort towns of Byron Bay, Suffolk Park and Lennox Head for investment driven purposes, however as our national businesses change structure so has the demographic for these areas.

With national businesses allowing a more free and easy work from home environment, people have trended away from the city areas and commute every few weeks or when necessary. Services such as the Ballina/Byron Airport and the Gold Coast airport are within close driving distance of the areas and people are taking advantage of not necessarily having to leave high earning jobs in metropolitan areas whilst still enjoying a coastal (regional) lifestyle.

The Clarence Valley

Over the past 12 months the Yamba and Maclean markets have performed in line with expectations. That is, the market not yet shown any signs of a downturn with buyer interest across all sectors remaining steady due to the Pacific Highway upgrade and overall affordability of the locality compared to neighbouring beach front and prime rural localities. It may even be concluded that the market’s performance has exceeded expectations with increases in sale prices of up to 20% over the past twelve months in localities such as Gulmarrad and Townsend. Investor interest has also increased more than expected due to the continued rental returns being achieved and that are expected to be achieved during the finalisation of the highway upgrade. Notwithstanding, the turnover of prestige sales has remained steady with sale prices showing a slight increase but not with the same momentum as the sub $600,000 market. Overall, the housing market in these areas has shown a definite buyer trend to investor properties and granny flat style additions. Put simply, buyers have responded to the increase in rental returns and are trying to capitalize on this inflated period, whilst also bearing in mind safe capital growth investments.

Coffs Harbour

2017 has given us much of the same as we saw in 2016 with what is seemingly an unstoppable market. Predictions of interest rate rises in 2017 obviously fell on deaf ears within the Reserve Bank with no movement experienced. Consumer spending, business investment, real wage growth and economic growth is low despite record low interest rates, thus keeping inflation low and therefore forcing the RBA to keep interest rates low.

The greatest increases in value were experienced at the lower more affordable end of the market with demand outstripping supply in many areas resulting in sales occurring at or in excess of the full asking price and sale periods recorded in days rather than weeks.

This has not been isolated to the main centre of Coffs Harbour but has spread to all areas of the region from the coastal towns of Urunga, Nambucca Heads and Woolgoolga to the country townships of Bellingen, Macksville and Dorrigo all of which have experienced good capital growth.

We have seen a considerable increase in new development primarily centred on new homes with vacant land becoming scarce, a high number of off the plan sales and rising land values. Unit development has also increased although at a lesser rate and centred on the local beachside suburbs of Park Beach, The Jetty and Sawtell. New unit developments are generally of a low rise nature, however two new high rise developments are under construction in Park Beach and central Coffs Harbour.

The prestige market has also seen increased activity mostly within the $1 million to $1.5 million range although we have seen several sales occurring over the $2 million mark which has been a very thinly traded market over recent years. This market is typically driven by the out of town purchaser being generally a high net wealth individual who is limited in the local market.

The rural residential market, traditionally being a more stable or slower moving market, has seen strong increases in activity and values being achieved for well located properties close to Coffs Harbour in areas such as Boambee, Bonville, Karangi, Upper Orara, Moonee Beach, Emerald Beach, Nana Glen and Bucca, generally within the $600,000 to $1.2 million value range.

The market for larger rural lifestyle properties has also firmed off the back of this general market improvement coupled with strong cattle and agricultural prices. Nowhere is this more evident than the hinterland township of Dorrigo were a number of recent sales have occurred in excess of $1 million for 50 to 100 hectare properties.

We consider our prediction of a strong market over 2017 has definitely been achieved throughout the majority of residential sectors not only driven by low interest rates, but in combination with long term growth factors such as lifestyle, transport including the regional airport and the upgrade of the Pacific Motorway (north and south), expanding medical sector and shopping facilities making the Coffs Coast ideal for families and retirees.

With the lack of supply, rapidly rising prices and many buyers missing out on purchases, a sense of urgency and fear of missing out appears to have gripped to market. First home buyers received a government subsidised stamp duty break mid-year which further fuelled demand into the second half of 2017. Economists are forecasting stronger economic growth figures in 2018 and rising international interest rates which would result in higher borrowing costs for local lenders which will be passed on to consumers. The RBA has expressed concern over higher than average rates of borrowing throughout the Australian community. There are concerns that interest rate hike effects on repayments may be too much of a burden for many borrowers (is 7% the new 17%?). These predictions of rising borrowing costs for consumers may see a softening of the investor market and investor mortgage stress resulting in higher supply. As vacant land subdivisions are selling fast off the plan an increase in finished homes and units can be expected in 2018.

However, the local rental market in Coffs Coast remains strong which may defuse any dramatic increases in supply or significant softening of prices.


The year has panned out pretty much along the lines predicted in the February edition. Prices have risen in most segments or at least remained steady. What has changed are government and APRA policies which have taken out some of the potential irrational exuberance in the investor market which was starting to show signs associated with the fear of missing out. Selling periods are still short but the investor dominance seems to have softened a little. Local builders have continued to be busy and the uptake of new subdivisions has been strong. Unemployment has remained low relative to national levels. Population has grown including migration to the area from around the country and the world. Tourism has continued to be a focus for local governments and there has been continued investment in infrastructure projects including additional railway services, Great Western Highway upgrades, Mount Panorama additions and social events such as the Winter Festival in Bathurst, Halloween Festival in Lithgow and Taste Orange. In all, a year that will be remembered for generally increased prosperity.


2017 has been a good year for the Tamworth market, playing out all but as expected from our February Month in Review. There continues to be stable growth throughout the region in both established and new homes. Vacant land sales continue to perform well with new subdivisions occurring and construction is still occurring at a steady rate, driven by both the owner occupier and investor markets.

We have noticed that in the later part of the year there was a slight decrease in sales of land and construction due to the introduction of the new stamp duty laws for first home buyers. First home owners who found it more financially viable to build now have further options and are often now opting for established homes over new. While this segment has slowed slightly, there has been no evidence of value drops or an over supply of land now available.

Also along the lines of the new first home owner stamp duty exemptions there has been an increase in interest and demand for mid range properties ($300,000 to $500,000) as these now become more affordable to buyers. Coupled with continued low interest rates we believe there is further growth in this segment to come.

The rural lifestyle market (five to 60 hectares) has seen very strong growth this year from those after a lifestyle change and those after equine suitable properties close to town. Due to the increased number of events at the Australian Equine and Livestock Events Centre in town, there has been a noticeable premium being paid for acreage close to town with equine infrastructure. These properties are still being sold to people who want a residential house, but with the added bonus of being able to have their horses.

Overall the market has performed as expected with only slight changes due to the introduction of new legislation. All sectors of the market traded as expected with steady growth and no sectors behaved unexpectedly.


The Albury-Wodonga market seemed to be in harmony in 2017, enjoying buoyant conditions across most market segments in the suburban areas and the strength of the rural residential/lifestyle market showing continued growth and demand. Staged residential land releases continued in both states and new display home villages kept builders busy, with land values and building costs on the rise. The change to APRA policies was evident in a slow down in out of town investment in new projects, however many first home owner and upgraders still opted to construct a dwelling. Local builders also reported being booked well in advance for large scale renovations of character dwellings in central Albury and central Wodonga and this demand was also evident for dwellings brought to market fully renovated. The lift in Wodonga started with the low end of town and has had a knock on effect in the mid range with market awareness and expectations quite high. The prestige market has seen reduced selling periods as value for money and general confidence in the region remains encouraging. While many farm retirees came into town looking for the downsize, locals and tree changers headed out of town chasing the rural lifestyle dream with a willingness to purchase land and build or snap up the established rural residential properties. A few hectares out of town is often the end game for regional property climbers, which was definitely a driver for market activity in the area this year. The Albury market continues to have its usual in vogue areas with gentrification of central areas well advanced, whereas central Wodonga has had the market activity this year in preparation for more dwelling improvements and subdividing of larger allotments.

The national housing affordability conversation places Albury-Wodonga and other strong regional centres in sharp focus as an affordable option, which seemed to be explored by market aware locals entering or investing in their home town and migrators from metropolitan areas and out of town investors also key players. Overall the market was solid as expected and with the Hume Dam at capacity, green grass aplenty and interest rates remaining low, a good year was not surprising but welcome nonetheless.

Share on:

DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.