It's official: Byron Bay unaffordable
IT'S a town where you often can't tell the millionaires from the battlers amongst the surfers, artists, hippies, long-time residents and ever-present tourists.
Like many other fast-growing areas, Byron Bay has a wide mix of residents, but now it's officially become a place where most people can only dream of buying a home.
The recent sale of an old housing commission home in Keats St which sold for $1.65M is a prime example.
LJ Hooker managing director, Tony Farrell who oversaw the sale, said it simply comes down to supply and demand.
"Byron is a highly competitive market, supply is low and demand is high," he said.
Mr Farrell said some purchasers were looking to bypass the competition and were contacting him directly at the first whiff of a property up for sale.
Referred to as an off-market sale, it's usually associated with a discreet sale when the either a buyer wants to snap up a home in a competitive market or when a vendor is shy of revealing they are selling.
However, as Byron Bay is so tightly-held with just 68 houses for sale on the open market in 2016, there's no doubt desperate home buyers are increasingly looking at this option.
"We have a deceased estate coming up for auction shortly in Suffolk Park and have not started advertising yet," he said.
"And we have already had three phone calls from people wanting to buy it."
This once laid-back surfing town now has a median house price of $1,185,000, a 73.0% increase compared to the same period five years ago, which in plain English, equates to an annual growth rate of 11.65%.
Mr Farrell said the town's demographic has changed considerably in the past few years, with buyers aged 40 to 60 years the main buyers.
He agreed its not a first-buyer home market, with most buyers on their second or third home.
"It's a Sydney and Melbourne driven market, they definitely come up here for a lifestyle" he said.
"They come up and bring the family and the major income earner might travel and commute a couple of days a week back."
However, he declared Byron Bay had not become more homogeneous.
"The demographics of the purchaser has changed but not the demographics of the town," he said.
"You will not find a more diverse community.
We have those living -week-to-week to and we have multi-millionaires."
According to the latest Housing Affordability Report from Corelogic RP Data, Byron Bay is well out of reach compared to the NSW median dwelling price of $405,000. The report issued in December 2016, showed housing in the Richmond - Tweed region had a price to income ratio of 8.6.
It revealed the percentage of household income required for a 20% deposit was 171.2%.
The percentage of household income required to service an 80% loan-to-valuation (LVR) mortgage of 45.6% - making the buyer officially in the 'mortgage stress' category - the financial mark where a home buyer is assigning 30% or more to paying off their home loan.
Meanwhile, if you thought units were in easier reach, think again, as the median price of a unit in Byron Bay is $800,000. Byron is now a town where many love to live, but only a few can buy.