Future demand inflates home market
PROPERTY prices across the Northern Rivers are tipped to nearly treble in value over the next decade, making millionaires of mortgagees along the coast while making the housing market increasingly inaccessible to first home buyers.
Ten-year property price projections prepared by Australian Property Monitors offer a crystal ball glance at possible house prices half way through the region’s journey to gaining nearly 70,000 new residents.
Depending on your perspective, the figures are cause for celebration or anguish.
The projections, based on price growth figures from between 2000 and now, predict the median house price – the middle figure of the values of homes sold – will soar more than 10 per cent to a staggering $1.54 million in Byron Shire and $1.24 million in Ballina Shire.
Lismore and Richmond Valley both come in under the million-dollar mark under the Australian Property Monitors projections at $765,939 and $756,042 respectively.
The figures got a mixed reaction from real estate agents.
Paul Deegan of LJ Hooker in Lismore and Peter Carmont of the Professionals in Ballina both rejected the figures, which are based on price growth between 2000 and 2010, pointing to the widening gap between average earnings and house prices.
“I don’t think it will happen. They’re way over the top,” Mr Carmont said. “I think wages growth will restrict it.”
According to Australian Bureau of Statistics figures, average wages in Australia were just shy of $50,000 last November after growing at between 3pc and 4pc per year since 2000.
That figure puts the $458,000 current median cost of a house at Ballina at nine times the average annual salary. Byron is closer to 11 times the average wage, while home buyers in Lismore pay six times more and in Richmond Valley they pay more than five times more than average earnings.
Assuming wages growth steadies at 4pc per year, by 2020 the average wage will be nudging $75,000, which will put the cost of a home in the Byron Shire 21 times above average earnings, Ballina at 16 times and Lismore and Richmond Valley both around 10 times average earnings.
However, Michael Shay of LJ Hooker in Ballina and John Nicolson of McGrath Real Estate (formerly Elders) at Ballina, both thought the projections were possible, even likely.
Mr Shay said the strong growth predicted by the State Government to punch Ballina’s population up to 56,200 residents by 2036 began decades ago and had been pushing Ballina’s price growth.
Mr Shay said property prices in Ballina had trebled or doubled every decade since he moved to the town from Lismore 10 years ago.
Mr Nicolson said the ageing of Ballina’s population meant many of those moving to the town were cashed-up retirees not bound to any ratio between average earnings and house prices.
“Last year, when we were operating as Elders Ballina, our website had 3000 hits per month ... and 75pc of those were coming from Sydney,” he said.
“That tells me ... there’s a huge pent-up demand.”