Regional NSW September 2018

The month in review: Regional NSW

By Herron Todd White
September 2018

Port Macquarie

With the warmer months descending upon us, do property sales really increase in spring or is it just that more people are out and about enjoying the warmer weather, perhaps popping into that open house across the road. Sometimes that’s all it takes and next you know you are paying a deposit. I wonder how often that happens; maybe it’s not fiction after all!

So down to business. What’s happening along the Mid North Coast and the Port Macquarie area for property sales and what’s the likelihood of property sales trending upwards during this spring season?

Our area has always been a popular tourist destination for families, making it a desirable area to purchase for lifestyle or investment. We are noticing a slowing in the market, with some selling periods lengthening back to 90 days or so, which was considered normal about two years ago.

The market is now returning to the norm whereby growth is at a more reasonable pace. Cameron Kusher from Corelogic advises that on the Mid North Coast, “Dwelling values have increased by 0.9% over the past three months and are 2% higher over the past year. This 2% annual rise in values is much lower than the 9.6% increase a year ago and the slowest annual rate of growth since August 2013. Although values are still increasing, the growth trend is clearly softening.”

Spring has always been a popular time to place the house on the market, with the belief that sales are more buoyant during this time. We believe that while more housing may come onto the market, sales will continue on the same trend as the past three months.

In the main regional centre of Port Macquarie, we normally see good sales activity from September right though to Easter with the end of the school holidays often being a deadline to be settled into a new or rental home. We see the market continuing at a stabilising trend with values starting to steady and an increase of properties coming onto the market allowing the buyer more choice.

With the building industry still buoyant, especially at the local fringes of Port Macquarie, new houses are proving to be popular, adding to the influx of spring houses.

So, we don’t believe that the market will be blooming out of control but rather a near-level trend is more likely.

Central Coast

The New South Wales central region typifies a number of notions of a touristy, holiday location with a generally laid-back approach to life. In years past, the coast was a popular retirement, holiday or weekend destination. Longer term locals can remember well that everything seemed to stop during the cold and dull winter months with life and people re-emerging in the spring and peaking during the longer, warmer and balmy months of summer.

Traditionally, the local real estate market mimics this trend with lots of new listings, fresh paint, blooming gardens and these days, houses staged for selling purposes.

Today though, we are coming out of an extended period of furious real estate activity across the region and indeed, most of the eastern seaboard. It has lasted a few years and along with milder than expected winters, we have experienced less of the slowdown periods.

The region’s real estate market seems to have changed to a constantly moving thing, but we don’t think this is purely related to seasonality or the longer than expected peak in the real estate cycle. We think the traditional winter slowdown is really a thing of the past for a number of reasons that include:

  • An awareness of the opportunities available on the coast and the need for those recognising this to be part of it,
  • Advertising and marketing being so advanced and available around the clock that observers and participants have the ability to view property year round comfortably from home, work, cafes etc without needing to spend days planning, arranging, driving around looking at properties and meeting agents;
  • The ability to deal or transact property remotely – how many of us haven’t even met a bank manager to arrange a home loan or conveyancer, as our parents had to? We do our stuff online and expect quick, seamless results.

But all of this aside, we still think spring is a special time for the market and very soon we are expecting the agents to commence with their spring sale events to capture and cater for the traditionalists among us.

The statistics prove there is a spike in sale numbers during the warmer months and although a little less obvious these days, it is still the case. Agents we’ve spoken with report that sales are slowing and buyer activity is a little weaker, but ever the optimists, most agents agree that while the market will slow and plateau, falls in values will be minimal.

Over the past few years, some of the region’s suburbs have seen significant sale volumes occurring. This is particularly the case in the peninsula suburbs of Umina Beach and Woy Woy. Only now are we hearing and seeing these markets slowing down. These suburbs and their close neighbour Booker Bay have proven very popular with buyers forced out of the Sydney market and it will be interesting to see whether the prices paid will be sustained as we move into the next part of the cycle.

We tend to think that the region’s markets will be okay overall, but if there is a vulnerable area, it will likely be the peninsula areas due to the level of rises seen here.

It remains to be seen whether the lenders tightening loan criteria will affect the market as we move into the next season and part of the cycle. We think it will and are already seeing the early effects of this on the first and second home and investor market where lenders are actively and overtly looking at their levels of risk on new borrowings.

Less affected though is the higher end of the market. We are seeing more sales in the executive or luxury segments of our local market at the moment and this is not new when we have reached this part of the cycle. While many buyers (and sellers) are still reliant on finance generally, they are a little less so than others.


Spring has sprung, well not quite, however the garden contractors are in full swing for sure, just as the real estate agents are preening their feathers for the annual spring festival frenzy. There is a definite uplift in property presentation, vendor enthusiasm and expectation and buyer behaviour in spring. It is an innate reaction to warmer weather, the desire to spring clean and end hibernation and is not lost on the property market in our region.

Albury-Wodonga and north-east Victoria enjoy four true seasons and some of the country’s top and emerging rural lifestyle and natural tourism areas, so the excitement about the spring market is tangible. Possibly not so much this year, as solid growth and interest in our region continues year round due to affordability with the region’s predominance of single, detached dwellings. Agents report that sales and dwelling construction have soldiered on through a relatively dry winter and right on cue, recent good rain is laying the foundation for a very pretty spring season. Manicured garden estates, tree lined streets with character dwellings, rolling hills, running creeks and green valleys are just the ticket to capture the ever ready home owners and although maybe not so much, the Sydney or Melbourne investor, however marketability is at its peak in spring in our region and this is usually reflected in higher listing numbers. It is not very technical, but green is good and brown is bad in our patch.

Everything can look quite bleak in winter, although some places, such as Bright (a cycling mecca of north-east Victoria) capture the ski season in winter and the Ovens River as a drawcard in summer, and prices and demand have really responded to such insulation from seasonal changes. The very strong growth and demand have created a very strong ripple effect over the past 18 months, with limited land available close to town and purchasers profiling as retirees, holiday home owners and tree changers. Permanent tenants and first home owners are nearly completely locked out of this very naturally abundant area. This spring will mark the second year of heightened market awareness of the increased values in the entire area, with special mention to Harrietville, Wandiligong, Porepunkah and Myrtleford. Spring will be very interesting to watch in these locations.

The rural lifestyle sector, which has been strong for a couple of years now, seems to have settled down a tad and tends to have its own longer term cycle/ turnover, usually related to the commute or workload of a few hectares sinking in, upsizing or downsizing. And in town (Albury-Wodonga) presentation will continue to play a role, with savvy agents and vendors often achieving the next level purchase price push due to bang on décor and renovation, which we’re pretty sure could be attributed to the avalanche of home and property shows. And with a young female valuer featuring on The Bachelor this week, maybe investment and divestment valuations might be the new spring property tool!


The Dubbo residential market has stabilised in recent months after a period of strong growth with values holding steady. Recent sales activity has been subdued due to tightened credit accessibility and more restrictive lending practices essentially slowing the buying and selling process. In addition, the reduction in investment lending and the potential for tax changes for investment lending has seen buyer activity slow in the Dubbo market.

With spring around the corner we expect to see an increase in listings which is typical at this time of year when properties and gardens are looking their best. The increase in listings will also mean more choice for buyers, which is expected to keep prices steady for the short term.

There is still strong demand for small acreage properties and rural lifestyle blocks in close proximity to Dubbo despite the current drought conditions. Well-presented properties with reliable water sources are still achieving record prices with a handful of sales reaching over $1 million in the past six to twelve months. The highest sale to date for a rural lifestyle property was achieved in December 2017 at the Angle Estate, a prestigious community of rural lifestyle blocks located on the Macquarie River. The 5-bedroom house achieved a price of almost $2.4 million after a successful marketing campaign.


The traditional spring property boom is always a talking point whenever someone asks their friends when to sell their house. However despite this traditional way of thinking it is not entirely true, with several of the local real estate agents making it a strong marketing point that over half of their annual sales occur during the winter and autumn periods. This point drives home that spring is not always the best time to sell, as the lower numbers of supply reaching the market in winter allow well priced homes to sell with less competition.

Despite the proof that spring is not always best, we still see an influx of properties during the spring months, but this supply is not met with increased demand. This can often result in longer selling periods, however due to Tamworth’s strong market does not result in lower selling prices. Owner-occupiers and investors are equally active throughout the year, but with houses often looking their best with gardens in full bloom, owneroccupiers take the lead during spring as they look for a home, not just a house.

With the ongoing drought on everyone’s mind it should be noted that it has not affected the local residential market, with agents reporting no lack of interest and no drop in sales. Although properties are not presenting at their best due to the dry conditions, it is not expected to have any major effect on the local residential market in the coming months.

The current market is showing strong sales across the board however it is the $350,000 to $450,000 range that is the most active. This range offers buyers many options from a doer upper in the older more prestige locations, to a modern brick home in the up and coming suburbs of North Tamworth and Calala. We would expect this trend to continue throughout the year as owner-occupiers are the major players within this range.

Lismore / Casino / Kyogle

Lismore, Casino and Kyogle are no different from other regional areas of Australia. As spring brings forth new life and vigour, so it does with property markets in these regions.

Prospective purchaser enquiries tend to improve and property owners feel energized to have their properties cleaned up and ready for marketing. Why? The stress and busyness of the end of the financial Month in Review September 2018Residential 34 year has abated and the few quiet winter months following have allowed the batteries to be recharged for the coming season.

It is also a logical time to prepare properties for sale as presentation is more appealing with vibrant gardens and growth as opposed to a dry winter and lack of landscaping maintenance.

Property listings tend to increase and agents generally become more present and persistent in their marketing.

Whilst this sounds all well and good, it does not necessarily translate to improving sales prices in this current economic environment. Other more pertinent issues to consider are the ever-present threat of increasing interest rate levels, which has been on the cards over the past six months and looking more likely further down the track towards the end of this year. There is also the issue of tightening lender criteria which is proving a bit of a stumbling block lately for some first home buyers and even existing mortgage holders. This is likely to continue into the remainder of this year and over to next year.

In summary, within Lismore/Casino/Kyogle, the positive energy of the spring season does present some opportunities for those wanting to sell or buy across the board on most property types and price points….BUT, as always, it will be tempered by those two key points…interest rate levels and tightening lender criteria…and likely into the following season of summer.

Ballina and Byron

The Ballina Shire residential market is typically more active coming into spring, with the months of July and August typically being the slowest months of the year.

Since the beginning of 2018 the market has slowed after a strong period of growth throughout the 2016 and 2017 calendar years so it will be interesting to see if the spring period does increase activity. Typically, it is the higher-end lifestyle properties that are more prone to cycles. Looking ahead a small increase in activity is to be expected coming out of the traditionally slower winter months however the return to the levels of activity experienced throughout the peak of the market experienced throughout 2017 is unlikely.

In relation to the Byron Shire, we do not believe that there is a traditional uptick in the market in this area during spring. The market peaked within the last three to six months and therefore demand has decreased for properties with a price bracket of over $1 million. As more traditional property cycles tend to see a boost in spring, the Byron Shire is coming off the back of a strong cycle and we are therefore not seeing this traditional boost in sales activity.

Over the past three to four years within the Byron Shire the market has been at such a strong level throughout the entirety of each year that we haven’t necessarily seen a traditional spring. The property market in this area remains steady and stabilised all year long.

We do not seem to operate in any sort of annual micro-cycle (e.g. – busy spring, slower summer, busy winter, quiet autumn). Throughout the years we have seen a strong market influence from the migration of interstate buyers throughout the entire year. Marketing isn’t coupled to seasons and there are no seasons that are better than others. We may settle to a more traditional pattern in years to come, as we do have a high number of holiday accommodation properties within this area, so holiday guests who choose to stay in this area over the spring and summer seasons could be persuaded to buy, but at the moment there is no strong evidence of this.

There are no specific price point, property types or locations tracking in this market at the moment that expect to hit any sort of bump in September. The only prediction we have is that we expect rural residential lifestyle properties located in secondary locations (25 to 30 kilometres away from the coastline) to experience more supply and less demand.

As the market within the Byron Shire Council has peaked after five years of strong growth in the coastal resort towns, we expect to see a slightly steadier market heading into the summer months. Interstate demand for properties within this locality seems to be decreasing, which suggests a steady period is more likely moving forward.

Coffs Harbour

Traditionally the residential property market slows after the end of the financial year which coincides with winter and the annual Coffs Cup in August. This year has been no different, however general market sentiment appears to be waning in line with the negative media reports of declining Sydney and Melbourne markets, coupled with the uncertainty over the possible fallout from the Royal Commission into banking practices and future impact on lending policies, interest rates and finance availability. There is no real evidence the sky is about to fall down at this point, only anecdotal evidence suggesting a slight slowing of the market in terms of days on market and reduction in asking prices.

Well-presented properties in traditionally popular locations are still keenly sought, however there is noticeable buyer resistance to property that is either overpriced, lacking in key features or situated in a secondary location.

Low-end investor style properties appear to be experiencing longer selling periods than at the beginning of this year. The higher priced prestige property sales numbers are down with an increased number of properties remaining for sale for longer periods. This market has predominantly been driven by out of town sea change or tree change buyers and softening market activity in this sector is a direct reflection of Sydney and Melbourne markets. Mid-range $500,000 to $750,000 property purchases are dominated by owner-occupiers trading up or down sizing to well-located modern or new homes.

The change of season to spring generally brings new light to the market with increased activity and buyer enthusiasm. Will the negative media and lending practices continue to dampen the spring activity? Only time will tell.

One would assume the market will have to cool off in the near future having been through almost two years of continual growth. Property prices are at an all-time high for the region whilst job creation and wages have not increased substantially to keep pace with the upward spike in values. What has kept pace with increased values are living expenses. While we are truly one of the great lifestyle locations where the mountains meet the sea, the disconnect between high property values and the low wage base, lack of job opportunities and rising living expenses will have to take a toll on the future market. A hint of any future interest rate rises may be the catalyst for the market to be reined in, at least until the next boom.

Southern Highlands

Notwithstanding that spring is the time when vendors who have hit the gardens with fertilizer and garden shears over the winter break commit to listing their properties, and agents and prospective purchasers having more options than at any other time of the year, the fact is that exchanged contracts indicate that May and November are the peak periods in the Southern Highlands for closing out on sales of residential property.

The below table illustrates the median number of sales (exchanged contracts) over the past four years.

NSW regional property

Some of the impetus here may well be the winter chill setting in from late May, purchasers committing after they have settled into the routine of the new year and the tail end of the year, vendors looking to offload their properties prior to the Christmas break in December and the arrival of the summer months, with the increasingly daunting prospect of requisite additional maintenance to keep their properties looking their best.

For the period to May 2018, a record number of 150 properties exchanged contracts across the Southern Highlands. With the observed slow down in price growth and activity in the Sydney market it will be interesting over the next couple of months to observe whether there is any flow on effect to our local markets, with some concern locally about increasing stock levels of vacant land lots coming to market.

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