Byron Bay prices have lifted off the bottom as it tops the list of 17 Australian coastal towns
Byron Bay has recorded the highest median house price among 17 key coastal towns during the second half of 2012, according to PRDnationwide research.
PRDnationwide research analyst Aaron Maskrey noted the Byron Bay house price currently sat at $664,000, equating to an increase of 11.1% from the previous year.
The 17 coastal towns also included Coffs Harbour, The Entrance and Yamba in NSW; Agnes Water, Gold Coast, Hervey Bay, Port Douglas, Sunshine Coast, Whitsundays and Yeppoon in QLD; the Fleurieu Peninsula in SA; Bells Beach, Lakes Entrance and 90 Mile Beach in Victoria; and Broome and Dunsborough in WA.
The report found the average gross rental yield achieved for Australian coastal town houses was 4.8%, reflecting a small 0.3% decrease from the previous year.
Coastal town units registered an average gross rental yield of 4.9% reflecting a 0.8%.
But PRDnationwide warn that despite increasing gross rental yields for units "potential investors should do their homework on each particular market they are interested in, as some unit markets could be subject to oversupply.”
Mr Maskrey said the highest coastal town rental yield for houses was 8.7% in 90 Mile Beach in Victoria and the highest coastal town rental yield for units was Broome in Western Australia at 7.7%.
"Of all coastal towns included, both Byron Bay and Coffs Harbour were in the top three gross rental yields for units - at 6.3% and 5.9% respectively," he said.
"The Byron Bay house market appears to have lifted off the bottom of its cycle from the second half of 2011," he said.
"Annual growth in the median house price over 2012 was an exceptional.
"And sales activity strengthened by 42%," he added.
"Observing the demographic shifts within Byron Bay, it is apparent that a large portion of the youth population aged 24 and under have left the region over the past five years, amounting to a fall of almost 3%.
"The age segment of 55 to 74 has increased by a large 5.6% of total residents.
"This significant shift is greater than just a resident population ageing, and signifies a growing number of incoming residents that have just retired or are near retirement."
The research indicated that Coffs Harbour also demonstrated similar demographic changes, with a contraction of 1.3% in youths aged 5 to 14, while the portion of residents aged 55 to 44 increased 1.3%.
"Coffs Harbour has recorded a median house price of $365,000, registering an increase of 2.8% from the previous year."
Mr Maskrey said The Entrance was another New South Wales coastal market with an increase in sales activity despite the adverse macro-economic factors which have influenced other coastal regions.
"Conversely, buyers have taken advantage of the favourably low interest rates and increased government stimulus spending during 2009 which observed a boost in sales activity coupled with a rise in both the median price of houses and units," he said.
"Over 2012, the median house price has increased by 2.4% to $425,000, with the majority of house sales occurring in the $300,000 to $399,999 price bracket. By observing movements within the house price points, it is apparent that the price bracket of $700,000 to $799,999 has expanded by four per cent, while the $900,000 plus bracket has contracted by three per cent."
The house market within Yamba experienced a significant price correction over 2011 and into 2012.
"However, the second half of 2012 has seen renewed demand enter the market with an increase in activity, resulting in the median price rising by $35,000 (9.5%).
"If there is a sustained period of increased sales activity in 2013 (upwards of 40 house sales over a six month period) then the improved buyer sentiment should see house values continue to build upon the growth experienced at the end of 2012."
Images of Byron Bay lighthouse courtesy of Flickr.
