Source : the age
A NSW town devastated by flooding has recorded a sharp surge in house prices over the last year as the state’s overall regional market sets a fresh record high.
Lismore, on the Northern Rivers, recorded a median house price jump of 32.5 per cent to a new median house price of $616,000, charting its recovery from the devastating 2022 floods which inundated 1720 homes in the area.
Lismore as seen in September 2024.Credit: Danielle Smith
While many affected properties have been renovated to a higher level, increasing their value, others have been snapped up by investors and out-of-towners keen to capitalise on rock-bottom prices and happy to accept the flood zone risks.
They’ve been characterised by computer modelling as being a one-in-100,000 years disaster in the Lismore Floodplain Risk Management Plan.
“What we’re seeing is a correction from all the damage and the time when prices dropped as low as $250,000 or $200,000 for unrestored houses just after the disaster,” said Elly Bird, executive director of Resilient Lismore, which helps coordinate the repair of damaged housing. “Before the floods, prices were strong.
“Our residential areas affected are still recovering, while those on Girards Hill weren’t touched, but there’s still some way to go. The attraction of cheaper housing is very strong now, although insurance can be super-expensive, and it depends on your risk-tolerance and how much you believe in climate change.”
Other NSW towns also recorded strong growth in values, according to the latest Domain House Price Report for the December quarter.
These include Cowra in Central NSW with a rise of 17.5 per cent, Tweed with 15.5 per cent and the Upper Hunter at 14 per cent. Meanwhile, the Richmond Valley and the Murray River saw 12.3 per cent price gains and Griffith in the Riverina went up 11.7 per cent.
They’ve helped propel NSW regional house prices to a new median record of $775,000, up 4.7 per cent on last year’s $740,000; a beefier rise than Sydney’s 3.2 per cent to a median of $1,645,444.
Domain chief of research and economics Dr Nicola Powell said people were seeking the greater affordability of out-of-city locations which keep prices – even at that lower level – quite strong.
“We’ve seen a little bit of a drop in price growth and a softening, but now house prices seem to be fully recovering in the regions, with a 3.3 per cent growth in the last quarter of 2024 alone,” she said.
“Unit prices also grew 3.7 per cent over the year, and 1.7 per cent for the quarter, and they seem almost to have recovered, but not as much as house prices.
“In Lismore, that’s very strong growth. Prices pulled back in 2022 but following some of the rebuilds and relocations and land relief, they’ve been improving strongly.”
Cowra, with a new median of $449,250, had sharp house price rises, partly due to the continued appetite of people living in the cities to relocate to such regional towns.
“The lower end and medium part of the market is quite strong in Cowra, but it’s probably been sales in the higher end that have contributed to that price growth,” said Caley Mok of Elders Emms Mooney, Central Tablelands.
“There’s been a lot of activity from people buying from outside the area, especially higher-end properties and acreages. Buyers from the city are seeking more space, while the new hospital being built is an extra attraction.”
In the Tweed LGA, where the median is much higher at $1.12 million, Ray White Burleigh Group agent Corey Moret says demand is always strong for homes in the area since it has some of the best beaches in the country, plus an airport nearby.
“There’s still a lot of locals looking to upsize and downsize, and people from outside coming to buy something more affordable and shave $200,000 off their mortgage,” he said. “If a rate cut comes, we think the market will really kick in again with sea-changers.”
The Upper Hunter is more affordable with a median of $542,000. One Agency Lindsay Harris’s Bonny Solman said 23 sales in the past four weeks was the biggest November for the agency since COVID.
“A lot of people are looking for investments in our area because prices are affordable and returns are quite good,” she said. “We’ve also got some new developments going on, and before there wasn’t a lot of supply.”
Many of the areas with the strongest price growth are either tree change destinations or, like the Richmond Valley and Tweed, alternatives to higher priced towns, like Byron Bay, says Powell.
“Buyers are all looking for affordability and with lower prices, they’re less impacted by limitations on borrowing capacity and not as vulnerable to high-interest rates,” she said.
