Demand for luxury property outside of Australia’s main centers outstripped supply as wealthy homeowners swapped urban residences for beach houses and country estates. As a result, pandemic-inspired out-migration is creating upward pressure on prices in places that were previously untapped.
Since COVID-19 arrived in Australia, wealthy families from the nation’s capital (and expats from all over the world) have been looking for greener pastures where they can get more square footage for their dollars and iso-friendly homes with lots of land and homes . office.
Historically, cities in eastern Australia – particularly Sydney, Melbourne and Brisbane – have experienced the largest sustained price growth in the country. However, in the post-Covid-19 “work from home” world, that natural order has changed course.
Even though regional prices are on the rise due to domestic moves, international investors can find great value due to the weak Australian dollar. The potential for great deals and future price growth for luxury properties in stunning Australian locations is out there, but smart buyers just need to know where to look.
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Pandemic Price Boom
One market that stood out during Covid-19 was located hundreds of miles from big cities that were once booming. Byron Bay, Australia’s easternmost city located in the state of New South Wales, is home to a permanent population of over 9,000 people but has the highest average house prices in the country. That figure jumped from A $ 1,335 million (US $ 960,000) in January to A $ 1,568 million in September, according to data from Hometrack Australia, while major cities saw their prices fall.
In just the three months to the end of September, Sydney’s average house price fell 1.7% to A $ 983,262, Melbourne was down 3.7% to A $ 870,836 and Brisbane did not move at all, remaining at A $ 559,646.
Byron Bay, 470 miles north of Sydney and 103 miles south of Brisbane, had been Australia’s playground for the rich and famous before the pandemic. This bohemian beach town is surrounded by idyllic rainforest outback peppered with million dollar homes. It started to attract global attention when Hollywood heavyweights such as Chris Hemsworth, Matt Damon and Zac Efron bought or rented luxury residences in the area.
Local broker Christian Sergiacomi from Pacifico Property said that even though the location was a hot property prior to Covid-19, the pandemic sent him soaring.
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“At the start of the coronavirus, I got a lot of calls at first from Singapore, Hong Kong, Dubai, UK, then the US, Canada and Ireland – everybody. I’ll get one call and I have several messages with more questions. “
He said competition for property was fierce, with buyers dropping millions of dollars on homes they didn’t enter and couldn’t for months because of the lockdown.
The Tuan Sergiacomi team sold a charming four-bedroom character bungalow in the heart of Byron Bay in June, during the height of the Covid-19 restrictions. The renovated property received the full asking price of A $ 3.6 million in less than one week.
Deborah Cullen, partner at the prestige brokerage Cullen Royale, has worked with wealthy homeowners buying country land for years. One tight-knit region, the Southern Highlands, less than two hours southwest of Sydney, is another theme park for wealthy weekends looking for a glamorous getaway and a chance to hang out with the likes of Nicole Kidman and Keith Urban, who bought the complex in there more than a decade ago.
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“This is an interesting time. Many of my clients during Covid have chosen to base themselves off farms or coastal properties where they have more space. Some have even decided not to return, with some going a step further and enrolling their children in local schools, ”he said.
“It’s amazing – they’ve effectively swapped their city property for a vacation home, turning it into a permanent home.”
Value in Looking Out of the Box
Savvy shoppers willing to hunt for homes outside of highly sought-after markets like Byron Bay are likely to find growth in neighboring untouched areas, according to Sergiacomi.
“I have a lot of confidence in the Ballina region. There are several beaches and airports that are upgrading their terminals and doubling the size of the asphalt before Covid. There is also a beautiful river system, a marina and some of the best infrastructure in the region. The suburbs there have lots of sunshine, lots of space and beautiful geography – and only 15 minutes from Byron, ”he said of the area. In Ballina Central, the median house price is A $ 630,000, jumping to A $ 800,000 in East Ballina.
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Several well-known restaurants and boutiques, which were once exclusive to Byron Bay, have also started opening locations near the Ballina area, showing investors that the area has potential.
Mr Sergiacomi said that buyers who want to look beyond the Byron Bay “brand” can secure themselves a luxurious lifestyle at a lower price, with the opportunity to grow in price.
Ms. Cullen added that with the influx of wealthy homeowners investing in the Australian region, these once remote cities will change.
“I am very happy with the rural areas that have experienced drought and then wildfires at the beginning of the year until now,” said Cullen. “Ultimately, people want to live there and build a great community.”
While the Covid-19-inspired flurry of buying in the exclusive Southern Highlands continues, Ms. Cullen said buyers should also consider other areas within hours of Sydney.
“There is still potential for growth in the Central Coast and the Hunter Valley region. Also, the Hawkesbury area through valleys and rivers; a lot of attention lately, he said.
Where Investors Can Mine Unreached Markets
Simon Pressley, market analyst and managing director of Brisbane-based buyer brokerage Propertyology, said outside of New South Wales, Australia’s most expensive and densely populated state, there were several locations where US $ 1 million would easily secure a luxurious home and the opposite lifestyle. returns millions of buyers in major cities.
“Since Covid, there has been an escape from the capital and a greater appreciation for the core values of life. I’m not saying everyone will buy an acreage and become a farmer, but we will see the greatest impetus for acquiring acreage properties that are within reasonable travel distance of major city centers, “he said.
Melbourne, in the southern state of Victoria, has been hardest hit by Covid-19 with a large proportion of cases and deaths, therefore has experienced Australia’s strictest lockdown. As a result, many of Melbourne’s wealthy are looking for space and tranquility.
“If you are looking for a fantastic lifestyle and value for money I would say Bendigo. It was a city that thrived during the gold rush era of the 1850s, so it’s home to some amazing Australian history and architecture. They had a lot of money to build, but they did it with style, and it’s still like that today, “he said.
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Bendigo, located 93 miles northwest of Melbourne, has a population of under 100,000 and an average house price of just A $ 435,000.
Tropical North Queensland, which is home to the Great Barrier Reef and the famous Whitsunday Islands, is “unbeatable” according to Mr. Pressley.
“You can easily find luxury properties ranging from about A $ 1.5 million to get there,” he said. “The Great Barrier Reef is a world wonder, and the city of Cairns is at its doorstep. It has a large airport, Australia’s international airport which is closest to Asia, ”he said.
“Then there’s Noosa, which is arguably one of the hottest markets in Australia right now. Even though over the last 10 years, Queensland’s economy and property market has been weak, Noosa has bucked the trend, ”he said of boomtown which is only two hours from Brisbane.
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September data for Cairns showed the median price for suburban luxury Palm Cove at A $ 730,000, while further south in Noosa it was A $ 1.155 million.
Property prices in Tasmania, or “Apple Isle”, are on the rise. The island state saw an 8.7% increase in house prices in 2018, and a further 4.2% jump in 2019. Given that mainland residents are looking for cleaner space and air, quality Tasmanian properties remain highly sought after.
“You can name it anywhere, it’s amazing, and for a little money, you can get a place on the water,” said Mr. Pressley. “Every time I refer to it, I really emphasize that it has the world’s best product; whether it’s wine, beef, dairy products, vegetables, or berries – that’s really the best. “”
The property price spike has also coincided with an increase in tourism to Tasmania, meaning ample opportunities for people to migrate or invest in the state. He highlighted Launceston’s second largest city as one of the places to be witnessed. While the average home price is A $ 470,000, grandiose properties such as the five-bedroom historic home, Glenfruin (currently listed at A $ 3.54 million) will ask for more than A $ 20 million in exclusive Sydney suburbs.
“I think A $ 2 million is really the upper limit of what you can pay for such a beautiful property there. Very affordable, “he added.
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