Economist Kaytlin Ezzy says demand for some coastal areas can “ebb and flow”. Photo: Harlz.
New research has found the South Coast housing market is seeing “softer market conditions” than other regional areas.
Research by Cotality Australia looked at Australia’s largest 50 non-capital city significant urban areas (SUAs), with two towns making the list for the NSW South Coast – Batemans Bay and Ulladulla.
Its research found that house prices were steadier, with stronger growth, while units were “a little bit more volatile”.
“That uptick coincides with the shift that we saw across the broader market,” said economist Kaytlin Ezzy.
“As the interest rates started to come down, that’s translated into more buyer demand and [worked] to push values higher.
“More recently, though, over the three months to August, the South Coast did see values shift that little bit lower (about half a per cent) … Looking at some of the listings statistics, it does look as though we have started to see a little bit more supply come up to the market.”
She said Cotality found that over August, new listings came in at about eight per cent higher than normal for this time of year.
“[That is] taking a little bit of steam out of that market and helping to push values down.
“Looking over the Batemans Bay and Ulladulla region specifically, both saw a little bit of a decline over the past quarter.”
Batemans Bay saw a decline of 0.2 per cent, while Ulladulla came in with a decline of 0.1 per cent over the same period.
Cotality research also showed that dwellings in Batemans Bay had a median value of $776,917.58 as of August (or a 1.1 per cent change over a year and a 41.5 per cent change over the past five years).
Ms Ezzy said buyers were searching for a more affordable option, while demand was affected by the coast’s reputation as a holiday area.
“It’s softer market conditions across the South Coast compared to some of your other regions.
“We have started to see some green shoots in markets that haven’t been performing as well, like some other regional NSW markets a bit further inland.
“[The South Coast is] not seeing that same consistent upwards trend … Demand tends to come in swings and roundabouts.”
She pointed to Batemans Bay’s nearly 20 per cent increase in sales turnover over the 12 months to June (compared to a -3.4 per cent drop against the five-year average).
“It has had a little bit more turnover compared to last year,” she said.
“But that goes to show just how low sales activity got … as people shifted away from something more expensive.
“[People turned from] coastal regional hubs towards those more affordable, slightly inland markets instead.”
Cotality’s research also found that dwellings are spending a median time of 71 days on the market.
Buyers are turning towards more affordable areas in inland NSW, which is affecting sales on the coast. Photo: Michelle Kroll.
The research found Batemans Bay has a median rent of $582.05, while the area had a 2.6 per cent vacancy rate, as of August.
“They have seen rents rise quite steeply over the rental crisis, but it has held fairly stable, whereas in Ulladulla, we have actually seen a bit of an uptick in that pace of growth,” she said.
“We had been seeing rents ease, but that has re-accelerated over the past couple of months, suggesting that there is maybe a little bit extra rental demand there.”
Ulladulla also came in as one of the regions with rents below what she described as their “previous peak” (meaning rates were about 6.5 per cent below a peak in August 2021).
“That means that rents today are about $43 cheaper than they were in August 2021 … When you calculate that over a year, that’s about a $2240 saving.”
Ms Ezzy expects dwelling values and rents will keep rising across the regions, albeit at a slower pace than capital cities.
“Regions tend to be a little bit more volatile, and each market tends to have its own factors that play in [for its results].
“I don’t think we’re going to see much in the way of a significant decline in rents until we start to see more stock coming to the market.”
