Guest article from Travis Lipshus:
When I started working as an agent in Byron Bay in late 2016, the median house price was sitting at around $1.1m and rapidly increasing with the spillover from the Sydney property boom.
Everyone was in awe. Two years before, it had been half that, as regional Australian property values were beginning to recover from the GFC. From 2016 until last year’s lockdown ended, Byron Bay had averaged 74 home sales annually, and the line on the graphs keeps going up, slowing and ebbing every now and then.
As of August 2021, the median house price is $2.55m, with a 70% increase in a year. If you owned property before this boom, you’ve most likely made more money in the value of your home than you could make in your entire life by saving your money.
There are over 60 agents “specialising” in selling property in the suburb of Byron Bay and there aren’t many properties to sell. As a result, a lot of the agents here hate each other.
Before the pandemic the majority of people buying and selling here were locals. The influx of people from interstate and wealthy ex-pats coming home has stopped local owners from being able to trade homes.
People buying and selling within the market are competing with more financially capable and eager buyers. If they cannot buy without selling, they risk missing out on the property or, worse, not finding one, as prices increase every month.
The rental market has been horrific for the community. The lockdown in 2020 saw holiday rental properties empty out and owners doing incredibly affordable short leases.
People jumped on these options, but when their leases expired, they joined the rush of everyone else fleeing to regional Australia (including film productions, which need a separate bathroom for their employees, meaning you have five-bedroom homes with two people living there).
The prices increased a lot, and if your lease expired, the owners moved in or rent went up past what is possible to pay. You could end up at the caravan park. Single mums who wanted to keep their children in the school zone ended up in places like that, with unstable housing.
Byron is a tight community. It’s still a rural town. Everyone talks to each other. It is a beautiful place to live, so obviously more people want to live here. But it’s changing, it has always been changing, and with the influx of people and money, it’s noticeably cosmetic.
The prominent age group here is 20-29 years old. It doesn’t feel fair that they pay $350 a week for an average room in a share house now because people with more money can’t fly overseas temporarily.
The buskers and backpackers are gone, the festivals cancelled. What was once a cosmopolitan community now has a Sydney vibe, noticeable especially in lockdown.
The last three school holiday lockdowns have affected Byron. Retailers and restaurants have been hit hard by the downturn in one or all of its core markets: Sydney, Melbourne, Brisbane and the annual influx of wealthy Europeans. Restaurants and shops have struggled to retain and attract service staff due to the lack of rentals or their high prices making them unattainable for most workers.
If our international borders don’t open properly until at least next year, maybe it’s time Australia tries to work on itself a bit and rectify some of these problems. Like my girlfriend and I did around the house and yard during our recent lockdown. Why does Australia have so little of our occupied land built on? What is stopping us from building more dwellings? The economic benefits of affordable housing aside, housing is fundamental to your wellbeing.
People need infrastructure and housing. Northern New South Wales needs a few billion dollars for a medical hub. If the borders are going to be continually and arbitrarily shut, people should be able to get treatment without being banned from their hospital on the Gold Coast.
As sad as it is, owning property is cultural here. We are a middle-class society and owning your own home is the zenith of our hopes and dreams. The prodigious number of agents not only in Byron but everywhere is proof of the low barrier of entry to becoming a real estate agent – which may just be a contributing factor to the often far too difficult process of buying a property.
The communication process can be demeaning, the threat of competition lingering and a shady aura clouding what should be a very transparent transaction.
You have to deal with agents putting insanely low price guides on properties, meaning you probably miss out (losing the $500 for a pest and building report, plus conveyancer fees in the process).
You will need to be flexible on your settlement time, which a lot of buyers are if it means securing a property before the prices increase more.
If you, like me, can spend months deciding on a certain bag or jacket to buy, do not carry that hesitation with you when buying a home. Most people will spend 10 minutes looking at a property, sometimes not even in person, and spend millions of dollars on it.
I have seen people pay $14m for a property that on paper should be $7m. That’s actually not new – the reasons for a property to be worth that can be enigmatic – but what is new is the number of people who can spend even more than that if they feel it’s special.
Those levels of wealth we often think are confined to overseas are here in Australia and particularly focused on Byron Bay.