Coastal property markets across Australia have been making waves, with 35% of Australia’s regional coastal markets ending 2023 with peak property prices, according to CoreLogic, defying rising interest rates.
From the sandy shores of Western Australia (WA) to the picturesque coastlines of New South Wales (NSW) and Queensland (Qld), the allure of coastal living has never been stronger.
However, the difference between the best and worst performing regional coastal markets is stark, with affordability still playing a factor.
“The lesson and the trend have been that in a higher interest rate environment, as we are in now, there has been a flight towards affordability,” said Ben Carrington (pictured above left), founder and buyers’ agent at Compound Property.
“WA is very affordable relative to incomes and also has strong lifestyle drivers which has seen its rapid growth over the past three years,” Carrington said. “On the other hand, we have seen more upmarket coastal regions such as Byron Bay and Noosa experience price declines as a result.”
WA and Queensland dominate capital gains lists
The study, which analysed 368 coastal markets, at least 50km from the nearest capital city CBD, found Perth’s outer metro coastal suburbs posted the highest annual capital gains, securing 13 out of the top 20 spots.
Bouvard, about 70 minutes by car from Perth near Mandurah, was the star performer after median dwelling values surged 28% to $560,138 in just 12 months.
Interestingly, the Mandurah LGA overall was still one of the cheapest areas to buy in last year, with a median house price of $431,874.
Augusta (23.2%), San Remo (22.9%), Halls Head (22.8%), Secret Harbour (22.4%), and Golden Bay (22.2%) weren’t far behind.
CoreLogic research director Tim Lawless (Pictured above right) said that last year saw a notable divergence between city and regional property markets, with coastal regions being no exception to the increasing gap between top and bottom performers.
“The performance of those with the largest gains and the highest growth rates are not the glamorous hot spots that rose to prominence during COVID,” he said.
“The past 12 months has seen markets that offer a combination of value and lifestyle attributes, such as commuting distance to a major city, great beaches, and quality housing at a more affordable price point, outperform more well-known areas.”
When taking a wider lens, the regional Queensland market emerged on top.
Queensland’s Wide Bay-Burnett region, the gateway to the southern Great Barrier Reef, dominated the top spots on the largest gains list since the onset of COVID, with values increasing up to 82.5% in some cases.
Nine of the top ten best performing coastal suburbs between March 2020 and December 2023 were in the major centres of Bundaberg, Hervey Bay, Gympie-Cooloola and Maryborough, with values generally rising from a relatively low base.
Conversely, the Richmond Valley in northern NSW recorded the largest drops in value, relative to their COVID peak after many suburbs around Byron Bay recorded a spectacular increase in values during the worst of the pandemic.
“Arguably these markets overshot the mark of what could be considered fair value through the worst of the pandemic, with increases in value of more than 60% in some areas. It’s also likely severe weather events in early 2022 played a role in the recent weakness,” he said.
Ocean Shores, Byron Bay, Suffolk Park, Lennox Head and Brunswick Heads – all in the Richmond Valley – were the top five suburbs where values have fallen most significantly since peaking in April 2022.
However, median dwelling values remain more than $1 million in each of these suburbs and are still substantially higher relative to pre-COVID levels.
Hidden gems in the market
Outside of the mining and port regions, which tend to be less expensive, Lawless said there were some ‘hidden gems’ which would be good news for those looking for affordable coastal housing or priced out during the pandemic.
“South Australia’s Ceduna is a prime example with a median dwelling value of just $245,275. It’s considered to be the oyster capital of Australia, has a regional airport and is close to major working nodes at the ports and various other industries,” Lawless said.
“Wongaling Beach, a popular tourist spot on Queensland’s Cassowary Coast between North Mission Beach and South Mission Beach, is another good example with a median dwelling value of $295,632 and great white sandy beaches.”
What about Sydney’s coastal areas?
For Carrington who resides in the Greater Sydney region, he has had to look interstate for his clients looking for hidden gems as the sea change trend kicks off again.
However, he doesn’t expect the demand for Sydney’s coastal areas be affected by these trends, as the demand for these types of properties is always very strong.
“What I think the data shows is those living a non-coastal part of a more expensive city are looking at more affordable coastal areas as better value because of the lower property prices as well as the lifestyle factors,” Carrington said.
“Sydney as a whole has experienced significant growth regardless of the suburb so when considering a market like Sydney it comes down to what you can afford and what you value the most important as far as proximity to the CBD, amenities and lifestyle attributes.”
