‘Great place to live’: NSW regional towns where house prices rose most

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House prices have jumped in almost every corner of regional NSW over the past year, buoyed by locals, tree-changers and investors armed with interest rate cuts.

The price of a typical house in regional NSW rose 3.1 per cent in the three months to September, reaching a record $825,000, the latest Domain House Price Report shows. It was the fastest rise in three-and-a-half years.

That was an increase of 8.7 per cent, or $66,000, over the past 12 months.

Prices in several council areas rose faster, led by parts of northern NSW.

Ballina shire’s median house price soared 17.7 per cent in a year to push the coastal pocket to $1.13 million.

Lismore rose 15.8 per cent to a median $660,000 as the city recovers from the 2022 floods and some homes are refurbished.

The New England region recorded gains, including in Tamworth (up 15.7 per cent), Gunnedah (up 15.6 per cent) and Narrabri (15.1 per cent).

Domain chief of research and economics Nicola Powell said buyers had higher borrowing capacity after the Reserve Bank cut the cash rate three times this year.

She said regional areas exerted a strong pull on Sydneysiders grappling with the capital’s affordability, including young families, downsizers and lifestyle buyers.

A typical home in regional NSW still costs less than half Sydney’s $1.75 million.

“Given momentum is back in regional housing markets, and housing markets overall, we’re likely to see prices in these regional areas still migrate higher,” she said. From October, the Australian Government 5% Deposit Scheme has expanded and now offers uncapped places to first home buyers looking to purchase with a low deposit.

Some regions have been fielding demand from buyers priced out of more expensive neighbours. Ballina’s rise still leaves it $340,000 short of the Byron shire’s typical price.

“Byron has become such an unaffordable area for locals,” Powell said. “You get that ripple effect where locals become priced out and they look to neighbouring LGAs.”

She noted Ballina had also been affected by flooding more than three years ago, while nearby Lismore had gone through “significant regeneration of the housing stock post-flood. And when you’ve got regeneration of the housing stock, it changes the price point.”

In the Tamworth and Gunnedah areas, by contrast, she highlighted the local economy including agribusiness and resources projects, which have been supporting buyer demand.

Ray White chief economist Nerida Conisbee agreed lower interest rates had enabled buyers to borrow more money.

“Investor activity is pretty strong at the moment because interest rates have come back,” she said, adding regional areas may offer higher yields and lower purchase prices.

She added that in some affordable towns the impact of rate cuts can be limited compared to, for example, a major employer moving into the area, the strength of the local economy or the affordability factor such as in Ballina.

“Byron’s [market] perhaps has got to a point where it is now affordability constraints are probably cutting through,” she said.

“What typically happens with housing is when the house prices get to a certain price point we do see people move to the next suburb across and that seems to be very clearly happening in that part of NSW.”

LJ Hooker Ballina’s Dean Shay has noticed the market picking up amid demand from locals, tree-changers and buyers from the Byron shire or Queensland.

“We’re on the coast, we’ve got fantastic rivers and natural beauty around us, and at the end of the day we’re only an hour, hour and a half, south of the Gold Coast,” he said. He also praised the local airport.

He thought the area was more affordable – and not as busy – than Byron, yet not cheap for a regional area.

He said popular areas included East Ballina, parts of central Ballina, Lennox Head and Skennars Head.

“[In] the hot areas, there’s not much for sale. Properties don’t last long in certain pockets,” he said. “The rental market is extremely tight as well.”

He said it was possible to buy an entry-level house in the Ballina area for under $800,000, but not in popular areas, and opportunities in this bracket were few. By contrast, top-end homes fetch $5 million and above.

Peel Valley Real Estate Tamworth principal and sales director Robert Miller has been fielding strong interest on homes under $700,000.

Buyers were benefiting from rate cuts, investors were looking for options beyond cash, mature tree-changers were looking for space, and now the low deposit scheme had expanded, he said.

He has been taking calls from buyer’s agents more often, seeking properties for their clients.

He said drawcards include Tamworth’s infrastructure, hospital, retailers and a new aquatic centre on the way.

“It’s a great place to live, the weather is good, it’s got a great hospital and facilities here.”