Coastal real estate: 10 beach towns in Australia that have had huge home price drops

Jemimah Clegg
view.com.au
Beachside towns in New South Wales and Victoria have seen house prices drop by up to about $108,000 in the past year as lockdown-driven demand slows.
Beachside towns in New South Wales and Victoria have seen house prices drop by up to about $108,000 in the past year as lockdown-driven demand slows. Credit: Michael - stock.adobe.com

Beachside towns in New South Wales and Victoria have seen house prices drop by up to about $108,000 in the past year as lockdown-driven demand slows.

Coastal areas where house prices saw the steepest falls in Australia since May last year were heavily concentrated in Victoria’s Gippsland and Warrnambool areas, with suburbs including Port Fairy, Venus Bay, Portland and Metung seeing prices decline by up to 12 per cent, CoreLogic data showed.

Other towns and suburbs in the ten most discounted coastal areas and surrounds included Fyansford in Geelong and Inverloch — also in the Gippsland area.

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This cosy coastal home in Venus Bay, which has seen a 11.2 per cent drop in prices in the last year, has a price guide of $529,000.
This cosy coastal home in Venus Bay, which has seen a 11.2 per cent drop in prices in the last year, has a price guide of $529,000. Credit: Supplied

Despite their price drops in the past year, these areas saw strong growth in the four years since the pandemic began, thanks mainly to sea-changers escaping locked-down capitals during 2020 and 2021, CoreLogic head of residential research Eliza Owen said.

“In the markets that have had really strong levels of growth, it might be more tempting to reverse your sea-change or tree-change decision, especially for the younger Australians who are facing higher interest rates and potentially a return to work policy,” Ms Owen said.

“But it’s hard to know how much of the weakness in some regional markets at the moment can be explained by that.”

She said regional markets tended to follow trends from their respective capital cities, and it was therefore unsurprising that Victorian coastal towns were heavily discounted.

“It’s broadly reflecting the national trend, where the Victorian housing market has been a lot weaker over the past few years compared to the WA housing market,” she said.

“Victoria has fairly consistently had the highest number of dwelling completions of the states and territories over the past few years.

“So that additional supply has kept values low, but that also helps to make the market a little bit more affordable and a little bit more accessible over time.”

Top 10 most discounted beach towns

Top 10 Most Discounted Beach Towns
Top 10 Most Discounted Beach Towns Credit: Supplied

Rates pressure

Gippsland-based agent Marni Lee Redmond from Alex Scott and Staff said the Inverloch and Venus Bay areas were experiencing a correction after high demand during COVID.

“It’s also driven by rate rises, but people have realised they don’t need to be in the regions anymore - even if there was another pandemic.” Ms Redmond said.

She said the state’s land tax on holiday homes had discouraged investors from the area and the state.

“A great part of our economy is based on holiday rentals,” she said. “The tax may work for the city — but it doesn’t work for our area.”

In Port Fairy, which saw the biggest price drop over the past 12 months of 12 per cent, homes are being discounted.

This includes a three-bedroom property on acreage with views of the coast, that has had a price cut from $950,000 in February this year to $850,000 this month.

In Venus Bay, which has seen an 11.2 per cent drop in prices in the last year, this cosy coastal home (pictured) has a price guide of $529,000.

Going up

Meanwhile, the 10 coastal areas with the strongest price growth were all in WA’s Bunbury region except two — Vincent and Cranbrook in the Townsville region of Queensland.

The areas saw between 24 and 31 per cent house price growth in the year and were all still reasonably priced — between $370,000 and $670,000.

“The past few years have seen really strong performance in these markets,” Ms Owen said.

“But if you zoom out 10 years, WA has been the weakest or one of the weakest performers aside from the Northern Territory. So part of the reason values are growing so strongly in Western Australia at the moment is because they’re coming off a low base.”

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