Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Canberra Times
The Canberra Times
National
Brittney Levinson

South Coast sellers cash in, but it comes at a cost for renters

The sale of 2/5-7 Golf Avenue, Mollymook on the NSW South Coast resulted in a $880,000 gain, six years later. Picture: Ray White Surfside Properties - Ulladulla

Property sellers on the NSW South Coast enjoyed huge gains in the last quarter of 2021 but one agent warned the high number of investors cashing in their properties was exacerbating the regional rental crisis.

CoreLogic's Pain and Gain report revealed 94 per cent of sales in regional Australia turned a profit in the December 2021 quarter, compared with 93.7 per cent of capital cities.

The report analysed approximately 133,000 national property resales over the quarter, a significant uplift from the 99,000 transactions recorded in the September quarter. Across the nation, the median nominal gain was $319,000 per property.

In the Southern Highlands and Shoalhaven region, which extends from Bawley Point in the south, up to Nowra and inland to Bowral, 98 per cent of sales returned a profit in the December 2021 quarter.

The median gain on these sales was $498,500, the highest profit margin across all of regional NSW. On average, owners held onto their properties for 8.2 years.

Among the region's biggest gains seen in the quarter was the sale of 15 Shipton Crescent, Mollymook. The property sold for the record price of $10 million in October, five years after it changed hands for $2.36 million.

The median sale price of houses in Mollymook Beach rose 48 per cent in the 12 months to January 2022.

Sellers have been making a profit across all dwelling types. A three bedroom unit at 2/5 Golf Avenue Mollymook sold for $1.59 million in December, an $880,000 increase on what the owners paid six years earlier.

The Capital region, which comprises coastal hotspots such as Batemans Bay and Broulee and further south to Narooma and Eden, saw 98.1 per cent of sales turn a profit. The median gain on profit-making sales for the quarter was $330,000 and homes were held for a median 7.8 years.

Among the profit-making sales was 6 Gillan Grove, Broulee which sold for $1.1 million in November, a $390,000 profit in less than three years.

Ray White Broulee agents Melissa Williams and Drew Deck said in the peak of price growth last year, many families listed their tightly held holiday homes.

"Some families were selling because they [weren't] using the holiday home, that was very noticeable, and they were cashing in on the high prices that were being achieved," Mr Deck said.

"But everyone's circumstances were quite varied. Very few bought and sold to make a quick profit, I don't think we actually had any of those."

Ms Williams said homes close to the water were likely to see some of the highest returns.

"In some instances, there will be properties that have probably almost doubled [in price], [it] depends on how long they had them and what streets they're in," she said.

"The ones closer to the water, definitely, people were seeing major profit."

Ms Williams said many investors had also sold their South Coast rental properties last year, which had come at a cost for local residents.

"People are selling them and [renters] can't afford to find anything else," she said.

"So we've got a massive rental housing shortage down here now too. The rents have just gone up so much and we have a huge homeless population living down at the airport in tents."

Regional rents have blown out by more than 20 per cent in the past year in some areas at the same time vacancy rates dropped to all-time lows.

In Batemans Bay, the rental vacancy rate, which is calculated by the amount of rental properties that remain untenanted for 21 days, dropped to 0 per cent in March, according to a report by review platform Rent Rabbit.

ACM, the owner of this masthead, has highlighted the worsening regional housing crisis along the coast in recent months. A number of the ACM's South Coast publications have reported hundreds of Shoalhaven and Eurobodalla Shire locals have been forced to sleep rough every night.

South Coast business owners have previously raised concerns the growth of short-term holiday rentals in the region has forced young people out of the rental market and the local workforce.

The Pain and Gain report stated while tree change and sea change markets have seen relatively high rates of capital growth since the onset of the COVID-19 pandemic, the rate of growth in popular regional markets has started to ease in recent months.

"This is likely off the back of affordability constraints being reached across the regions, where typical dwelling values are now at, or close to, $1 million across the Southern Highlands and Shoalhaven (with a median of $1,017,815), the Sunshine Coast ($992,908) and Illawarra ($974,762)," the report stated.

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.