Coastal havens where home owners are hitting pay dirt

Sun, surf and six-figure profits; welcome to life in the coastal havens where vendors are hitting pay dirt.

Home owners who have sold for a windfall in NSW’s Kiama collected a median nominal profit of $730,000, more than any local government area in Australia, Cotality’s Pain & Gain Report for the December quarter shows. Kiama was also number one in the previous quarter.

The region with the second-biggest resale gains – exclusive Noosa on Queensland’s Sunshine Coast – shares Kiama’s traits of tranquillity, world-class beaches and natural beauty. Noosa vendors banked a median profit of $705,000.

COVID turbocharged interest in these markets, but quality of life and proximity to capital cities have sustained them since, agents say.

In the top ten were Perth’s satellite city of Joondalup (a $695,000 median profit), followed by The Hills north-west of Sydney ($666,555; including Castle Hill, Baulkham Hills, Kellyville), Perth’s inner postcode of Melville ($660,000; Applecross, Alfred Cove), the celebrity magnet of Byron ($655,000; Byron Bay and surrounds), the Adelaide Hills winery district ($650,000; Stirling, Hahndorf), Mitcham in Adelaide’s southern foothills ($623,500; Belair, Colonel Light Gardens), Perth’s affluent Claremont ($613,000) and Queenscliffe on Victoria’s Bellarine Peninsula ($611,000; Queenscliff and Point Lonsdale).

The research indicates time in the market matters more than the timing of the purchase.

The average hold time of profit-making resales in Kiama was 10 years, and nine years in Noosa. The longest was 15.2 years in Queenscliffe and the shortest was eight years in The Hills.

Kiama home owners who bought during the market peak in mid-2022 and sold for the median price today would risk a $100,000 loss, Cotality’s head of research Gerard Burg said.

The longer the ownership, the more chance there is to “smooth through the wave” of the market’s fluctuations. “Whereas in shorter periods, you’re more likely to be exposed to a cyclical upswing or downswing,” he said.

COVID regional migration was an act of escapism, but today it’s about affordability, Burg said. However, that is not behind prices in Kiama and Noosa, which are in a different league.

“It’s a little more difficult to build in a lot of these locations, but there’s also often larger blocks of land, larger properties and given their lifestyle markets, they’re generally targeted at a more affluent population,” he said.

Perth’s three inclusions in the top 10 reflects supply demand imbalance. Home values in the WA capital have rocketed $69,000 in the past three months, outpacing other areas in the list.

“Perth’s population has increased very rapidly and the supply of new properties has been relatively constrained,” Burg said.

South Coast Prestige Properties founder Craig Higbid, who specialises in Kiama, said he was surprised by the figures. He has not noticed dramatic ongoing growth, but has seen sharp surges.

“COVID really injected a lot more interest into our location, and our market went crazy,” Higbid said.

Elevated and waterview homes command a premium. Buyers want to be where cafes meet the sea.

“There’s a lack of supply, for that lifestyle choice and to be close to town,” Higbid said. “You can still pick up homes for $1.2 million to $1.5 million, but prestige, you’re going to pay for that.”

The top of the market was $4 million up to $7 million, he said.

Buyers come from the Southern Highlands and Sydney, including downsizers, holidaymakers and permanent residents. Some keep a city base, but have a second home in Kiama.

“I think it’s because of the breathtaking landscape,” Higbid said. “You’ve got the blowhole, hiking, the escarpment, farmers markets, there’s so much activity going on.”

Development proposals are on the table but Higbid said locals hope the fabric of the town stays intact.

“There’s a strong connection between people and the town, and they take immense pride in it.”

RT Edgar Bellarine director Felix Hakins, who sells in Queenscliff and Point Lonsdale, said subdued development had buoyed his market.

“There’s extremely low limited land releases and that’s why the prices are still very strong.”

The most expensive listing currently in Queenscliff is an 1865-built manor, marketed by RT Edgar with hopes of $4.9 million to $5.3 million, which was last sold 20 years ago. However, renovated or brand new, single storey, and walking distance to amenities are most desirable.

Excellent schools, beaches and buzzing venues - such as reopened The Esplanade Hotel, Queenscliff - boost appeal, Hakins said. Although workers have returned to the office, he finds hybrid arrangements are still a factor, while others are seeking a weekend retreat.

Some are crossing over from the Mornington Peninsula.

“Buyers can see there is a bit more value for money on this side,” Hakins said. “We pick them up from the ferry and drive them around, and match them up to properties that they might have even not thought about.”