Impact on interest rate rises in lifestyle locations

Over the last 2 years during the pandemic, quite a few people bought in sea, tree or snow change locations and prices really spiked partly because a lack of stock.
Now with interest rates on the rise, my question is whether these lifestyle location areas will experience greater price drop pressure than metropolitan Sydney or Melbourne, or will it hold up better.
CBA has gone as far as to predict an 18 percent drop in metro Sydney and Melbourne markets and while they got things very wrong during the pandemic, how do people see the economic fundamentals play out with lifestyle v metro property prices.

 

Just posted this on another thread, relevant for this discussion

'The amount of froth in places like Hervey Bay (flat for 15 years prior to Covid) and Nelson's Bay (another serial underperformer) has been insane. Every Tom, Dick and Harry wanted to own a holiday house with basement rates and pent up equity.

This unit in Nelson's Bay sold for 1.235m. I actually can't believe some of the capital being outlaid.
https://www.realestate.com.au/sold/property-apartment-nsw-nelson+bay-137374154

These sort of areas will be down 30% by close of 2023 IMO and purchasers will be in negative equity for 10 years at least.'

 

wow very expensive for that. yeah id be worried about any lifestyle area not within a car commute of a major job centre

 

I know people who have sold up in Sydney and then paid in excess of 3 million in places like Jindabyne and Bellingen and I wonder whether it was a mistake or whether it was a good move. Nearest town in Jindabyne is 45 minutes to Cooma and then another hour to Canberra and it’s the coldest place in Australia, whereas Bellingen quite small and it’s a drive on Waterfall way to Coffs Harbour, but at least it’s mild.

 

i would add the Gold Coast to this list, which I know might sound controversial.
I worked as a dentist 10 years ago on the Gold Coast and there was very very little disposable income (other than a handful of blue ribbon suburbs) after the GFC. I appreciate the Gold Coast has fundamentally gentrified but I question if it has the depth of wealth/industries that the three major capital cities have.

There was plenty of crazy prices paid during Covid by cashed up southerners looking for a holiday home and I would expect the Gold Coast to come back 30% like it does in every downturn.

The marginal buyer dictates the price of every asset/market and when you consider lack of FOMO/mortgage stress/ ability to travel overseas - the Gold Coast can deflate relatively quickly.

Watch the unit market carefully as during the last downtown it was a major oversupply that took years to resolve.

 

Yeah, a lot of retired seniors on the GC don't have solid incomes anymore. The place is well known for the 1 cent millionaires.

 

Agree with general sentiments, definitely GC a holiday destination thats it. 100% all will fall greater than 30%. Next 2 years very interesting, as most of them will relocate back to metro and thats why i stick to metro say middle ring specifically. No way i will invest in these lifestyle locations, i feel sorry for new comers they need to be really careful.

 

Hmm Sydney 'lifestyle' areas like the Northern Beaches appear to be coming off a bit faster and first. Given temporary demand (covid preferences) will likely slow away and possibly even reverse over the next few years, I suspect they'll fall a bit more than other areas. Especially if they've gone on building booms.

 

I may be biased as I have two properties on the GC, but I’m optimistic that it has matured since the GFC, which admittedly was a pretty grim time on the coast.

Over the past 5 years every friend that was single income with kids, or below average income have left the coast. They’ve gone to Logan or the far outer reaches, of the Gold Coast. It’s been a pretty solid demographic shift. And unlike in 2010, rental vacancies are incredibly tight. I’ve got DINK friends on $150k+ currently living in a studio resort room as there are no rentals.

I’m also optimistic that infrastructure in the pipeline and Olympics cash will keep things ticking over. But it will be interesting to see how it all plays out.

 

Comes down to individual taste. I love Jindabyne and the surrounding area and I love my snow sports, my trail walks, cycling and that stuff.

 

What are your thoughts on inner city lifestyle areas, such as Surry Hills? Eyeing terraces there.. and can't see demand dipping too noticeably

 

Young crooks stealing cars leaves Gold Coast neighbours desperate

 

That is a sign that you live in a top Gold Coast suburb! It’s almost a status symbol if your street becomes the target street Alas, in ten years no kid has stolen my Hyundai for a joyride.

 

Hahah! I used to go fishing in the upper end canal estates on the Broadwater, I could write a book on all the dodginess I had seen at the wee hours of the morning. Even got raided by undercover police once, and they found my ziplock bag full of frozen worms.

 

I have observed the post covid lifestyle is here to stay, albeit in a hybrid format - i.e. a few days WFH is now the norm, as for as long as it is an employees market, most folks won't want to go to an employer that forces them to do 5 days in the office. Having said that, 5 days WFH is definitely not the norm and not to be expected.

In my view, lifestyle location that is still commutable for those ~2 days in the office, is a safer bet than something out in the middle of no where close to a job centre.

 

Reminds me of Umina, Woy Woy, Ettalong area.

Just have to accept it.

 

Could be time to re-kindle this thread

... last post June 2022 and current (Nov 2023) interest-rate scenario is very different - mortgages of around 2.5% are now 6%.

6% proving tolerable for PPoR's, but not so sure about Lifestyle property (second homes, not rented). Mixed signs here in WA - land struggling but some big prices being asked at the premium end.

 

I got really bored this morning after reading a capital city thread and started looking up a few lifestyle places. East coast dropping, west coast rising. I’m not sure if my mum is the only person in Aus who gets the newspaper but it’s been interesting to see WA’s beautiful Yallingup feature on the front page of the travel section in a Brisbane newspaper. Nicholas Cage may put it on the map even more after his movie is released.
Yallingup Suburb Profile | Property Market, House Prices and More - REIWA
https://www.realestate.com.au/qld/noosa-heads-4567/
https://www.realestate.com.au/nsw/byron-bay-2481/

 

One word, terrible, I inspected fair few properties on the far south coast of NSW, they were going for like 1.4+, now these can be yours for 0.8 to 0.9 mil.

Around Moss Vale, some can be yours for 0.8-0.9, but some vendors still live in 2021/2022 and they want 1.5+, they are dreaming.