North Coast Region – What’s Happening in the Housing Market?

The North Coast region covers twelve local government areas on the north coast and immediate hinterland, including significant regional centres. While there are differences across the region in median rent and house prices and rent and house price growth, there has been a reduction in both rental and purchase affordability in every LGA in the region and a loss of affordable rental housing. At the same time low income rental households are continuing to increase, so demand for affordable housing is strong and growing.

Housing Market - RentalRents There have been moderate to strong increases in median rents in all bedroom

categories (although there are too few studio dwellings to reliably give a median anywhere in the North Coast and for one bedroom dwellings in some LGAs) over the last ten years.

Over this time frame, the highest rent increases for one bedroom properties were in Byron (92.8%), Clarence Valley (82.1%) and Ballina (62.5%); for two bedroom properties in Kempsey (63.6%), Byron (61.3%) and Bellingen (60.0%); for three bedroom properties in Byron (77.8%), Kempsey (57.1%) and Bellingen (49.0%); and for four or more bedroom properties in Byron (90.0%), Clarence Valley (69.6%) and Nambucca (56.6%)

The highest median rents in the North Coast at June 2018 are in Byron, Ballina and Tweed in every bedroom category.

The table below shows median rents for one, two, three and four or more bedrooms at June 2008 and June 2018 for all the North Coast region local government areas (LGAs).

www.facs.nsw.gov.au

June 2008

June 2018

Area 1 bed 2 3 4 1 2 3 4

Ballina 160 240 330 400 260 380 490 630

Bellingen 200 250 308 320 380 450

Byron 200 300 373 425 400 500 640 855

Clarence Valley 140 300 240 265 255 295 370 475

Coffs Harbour 150 210 280 350 253 320 400 495

Kempsey 138 168 210 270 200 270 330 420

Kyogle 228 230 210 300

Lismore 120 195 260 335 195 270 360 425

Nambucca 125 170 220 270 270 350 415

Port Macq-Hastings 155 200 278 350 233 330 400 500

Richmond Valley 165 235 285 270 320 400

Tweed 180 270 330 420 280 380 480 600

The graph below shows changes in median rents for all dwellings (houses and flats, all bedroom numbers) from 1990 to 2019 in the North Coast. There was relatively little increase in rents between 1990 and around 2003, after which median rents began to increase strongly to around 2018, with a subsequent easing or drop in median rents. The graph shows the highest median rents are in the far north coast LGA’s of Byron, Ballina and Tweed.

www.facs.nsw.gov.au

Vacancy Rate According to Real Estate Institute of NSW (REINSW) data, the vacancy rates in

the Northern Rivers (1.4%) and Coffs Harbour (2.2%) at June 2019 are tight - well below the 3% level regarded as representing a balance between supply and demand. For much of the period since 2006, there has been a tight vacancy rate in the Northern Rivers, with significant periods of undersupply in Coffs Harbour.

The graph below shows the vacancy rate in Coffs Harbour and Northern Rivers from 2006 to 2019 using REINSW data.

www.facs.nsw.gov.au

Affordable Rental The NSW wide trend to decline in the proportion of rental housing that is

affordable for lower income households is evident in the North Coast, although, as in the Rest of NSW, there has been some recent improvement in rental affordability.

All the LGAs in this region have a significantly lower proportion of affordable rental for very low income households in 2017 than in 2001. Seven of the twelve LGAs in this region have a lower proportion of affordable rental than the Rest of NSW average of 23.1% (Ballina, Bellingen, Byron, Clarence Valley, Coffs Harbour, Port Macquarie Hastings and Tweed). Byron had the lowest proportion of affordable rental for very low income households with just 2.2%, followed by Ballina with 4.0% and Tweed with 6.4%.

The graph below shows the change in the proportion of private rental accommodation that is affordable to very low income households in all LGAs in the North Coast region between 2001 and 2017.

www.facs.nsw.gov.au

The proportion of rental properties affordable for low income households has also declined in the North Coast region.

Again all the LGAs in the North Coast have a lower proportion of affordable rental for low income households in 2017 than in 2001 (with the exception of Kyogle). Five LGAs – Ballina, Byron, Coffs Harbour, Port Macquarie Hastings and Tweed have a lower proportion than the average for the Rest of NSW of 54.1%, with Byron Bay having the lowest proportion with just 10.8%.

The graph below shows the change in the proportion of private rental accommodation that is affordable to low income households over the period from 2001 to 2017 in North Coast of NSW.

While there has been some improvement in the proportion of affordable rental in some LGAs since around 2011, overall all the North Coast LGAs have experienced a decline in the proportion of affordable rental.

www.facs.nsw.gov.au

There is evidence that short term holiday rentals such as Airbnb are impacting the supply of housing, including long term rental and affordable housing in cities and coastal communities. The North Coast sub-region and Byron Shire in particular has experienced significant impacts, including loss of long term and affordable rental housing.

The University of Sydney Urban Housing Lab undertook a study and prepared a report for the Australian Coastal Councils on short term holiday rentals: “Planning responses to online short term holiday rental platforms” - Research Project for Australian Coastal Councils Association Inc. September 2018 by Nicole Gurran, Yuting Zhang, Pranita Shrestha, Catherine Gilbert.

The study found (p7) “that there has been a rapid growth in online holiday rental listings overall and in coastal Australia in particular. Since Airbnb was launched in Australia, the number of listings has risen to over 130,000 properties, amounting to around 0.2% of the housing stock nationwide. If holiday rentals are considered to be part of the rental housing stock (a smaller proportion of Australian homes), then Airbnb listings for whole homes represent around 3.5% of rental accommodation. In coastal communities, the rate is much higher. Across the communities in this study, between 0.3% (Moreton Bay) and 17.6 % (Byron) of the total housing stock is listed on Airbnb.”

Further (p36) “Many… of the case study communities report that lower income residents and local workers face barriers in securing affordable rental housing or entering home ownership … – particularly Byron Bay … – online holiday rentals permeate residential neighbourhoods which were formally places for lower income earners and local workers to find permanent rental housing.”

“In these localities, interviewees described a tightening rental market where renters struggled to find accommodation in the towns where they worked, or

www.facs.nsw.gov.au

faced eviction notices prior to holiday seasons. In Byron, interviewees described a process of tourism displacement whereby local workers and aspiring first home buyers with ties to the locality, have been priced out of the market by tight rents and unaffordable prices.”

New residential development intended to increase the housing supply was often purchased by investors with the intention of listing them as holiday rentals rather than offering them to long term tenants.

The report notes that in Byron (p58) “The rental housing market has always been tight, with many renters needing to vacate during summer peak seasons. However, since the rise of online platforms …permanent rental accommodation is almost impossible to access within Byron Bay itself, and difficult across the entire local government area. There is a particular concern about the potential for new housing supply to be subsumed within the holiday rental stock rather than contributing to local housing need.”

As the study points out (p46) “in communities where demand for rental housing outstrips supply, any conversion of the residential stock to tourism will exacerbate housing affordability issues.”

The study outlines a range of potential planning, regulatory and industry responses, including a checklist for local government to consider.

Rental Stress Households regarded as being in rental stress are renting in the private rental

market and paying more than 30% of their income in rent. Lower income households in rental stress will struggle to pay for other essential household costs, such as medical or educational expenses, food, transport and energy costs.

At June 2016, between 83% (Kyogle) and 97% (Byron) of very low income households in the North Coast LGAs are in rental stress (that is, paying more than 30% of their income in rent) compared to the Rest of NSW average of 89%. Only Kempsey, Kyogle and Nambucca have a lower proportion of very low income households in rental stress than the Rest of NSW average.

Between 54% (Nambucca) and 71% (Byron) of low income households are in rental stress in the North Coast compared to the Rest of NSW average of 62% (only Nambucca, Clarence Valley, Richmond Valley and Kempsey are below this level) at June 2016.

The graph below shows the proportion of both very low and low income rental households in housing stress in the North Coast and the Rest of NSW in 2016.

www.facs.nsw.gov.au

The table below shows the number and proportion of tenants in the North Coast region who are in the private rental market, are in receipt of Commonwealth Rent Assistance, and even with this additional income support, are in housing stress.

There were a total of 18,663 tenants in receipt of CRA and in housing stress across the North Coast region in 2016. The North Coast is home to over a quarter of all the CRA recipients in housing stress across the Rest of NSW. This is a very high proportion and indicates that this region is not affordable for rental, relative to other regions outside Sydney. Tweed had the highest number of CRA recipients in housing stress with 3,845, while Coffs Harbour and Port Macquarie Hastings also have a significant number.

Several North Coast LGAs have a higher percentage of CRA recipients in housing stress than the average for the Rest of NSW (Ballina, Byron, Coffs Harbour and Tweed). Byron has the highest proportion in the region with 54.4%. This demonstrates that many low income North Coast residents are not able to access affordable housing in the region.

AreaTotal CRA

recipients 2016

CRA recipients

in Housing

% in Stress

www.facs.nsw.gov.au

Stress 2016

Ballina 3,710 1,509 40.7

Bellingen 1,064 379 35.6

Byron 3,663 1,994 54.4

Clarence Valley 5,213 1,591 30.5

Coffs Harbour 7,404 2,823 38.1

Kempsey 2,878 805 28.0

Kyogle 709 211 29.8

Lismore 4,605 1,702 37.0

Nambucca 2,326 565 24.3

Port Macquarie-Hastings 7,317 2,584 35.3

Richmond Valley 2,549 655 25.7

Tweed 10,031 3,845 38.3

North Coast 51,469 18,663 36.3

Rest of NSW 181,401 70,760 35.1

Loss of Affordable Housing Stock The Department of Communities and Justice (DCJ) has calculated the number of

new bonds lodged that were affordable to low income earners on the North Coast in 2006, 2010 and 2013 and 2017.

All North Coast region LGAs experienced a significant loss of affordable private rental housing stock between 2006 and 2017, averaging 68.0% fewer affordable bonds lodged in 2017 than in 2006. A total of 4,059 affordable private rental properties were lost in the twelve North Coast LGA’s over this period, with the largest numeric losses occurring in Coffs Harbour (655 or 70.5% fewer), Clarence Valley (623 or 70.2% fewer), Lismore (512 or 70.4% fewer) and Port Macquarie Hastings (565 or 63.8% fewer).

At 2017, Byron had just 39 affordable rental bonds lodged, Bellingen and Kyogle just 51 and Ballina only 87.

This loss of affordable rental housing is concerning, given the increase in low income rental households across the region. Significant losses are occurring in

www.facs.nsw.gov.au

places that have historically been amongst the more affordable North Coast LGAs.

The table below shows the number of new bonds lodged that were affordable to low income households in 2006, 2010, 2013 and 2017.

 Number of affordable rental properties for low income 

households

AREA 2006 2010 2013 2017

Ballina 281 149 136 87

Bellingen 162 72 44 51

Byron 107 87 49 39

Clarence Valley 887 405 475 264

Coffs Harbour 929 514 421 274

Kempsey 605 434 296 149

Kyogle 153 81 124 51

Lismore 727 426 406 215

Nambucca 358 283 247 137

Port Macquarie Hastings 886 540 396 321

Richmond Valley 413 238 314 128

Tweed 457 267 317 190

Housing Market - Purchase

Sales Price Changes in the median sales price of both houses and flats over the ten

years to March 2018 have been upward. Byron (61.2%), Port Macquarie Hastings (54.5%) and Bellingen (54.1%) had

the largest proportional increase in median sales price for houses over this period.

For strata properties, Kempsey (69.2%), Byron (65.8%) and Ballina (61.8%) had the largest proportional increase in median rents over the ten year time

www.facs.nsw.gov.au

frame. Note that Richmond Valley experienced a small decline in median sales price of strata properties over that time frame.

At March 2018, Byron had the highest median sales price for houses with $935,000, followed by $727,000 in Ballina and $637,000 in Tweed. Byron also had the highest median sales price for flats at March 2018 with $718,000, with Ballina the next highest again on $495,000 and then Tweed with $395,000.

The table below shows changes in the median sales price of both houses and flats over the last ten years in the North Coast region.

Strata Houses

2008-March

2018-March Change %

2008-March

2018-March

Change %

Ballina 306 727 212 41.2 515 500 -15 -2.9

Bellingen 201 513 180 54.1 333 400 67 20.1

Byron 433 935 355 61.2 580 595 15 2.6

Clarence Valley 286 395 110 38.6 285 310 25 8.8

Coffs Harbour 250 525 165 45.8 360 415 55 15.3

Kempsey 195 335 97 40.8 238 276 38 16.0

Kyogle 195 290 3 1.05 287 181 -106 -36.9

Lismore 207 430 133 44.8 297 330 33 11.1

Nambucca 266 400 118 41.8 282 320 38 13.5

Port Macquarie-Hastings 269 550 194 54.5 356 410 54 15.2

Richmond Valley 315 292 41 16.3 251 281 30 12.0

Tweed 360 637 122 23.7 515 455 -60 -11.7

The long term median sales price trend for houses and flats shows growth across all LGAs, particularly from around 2002.

The long term trend for strata properties is similar, with increases occurring primarily after 2001.

The two graphs below show the median sales price trend for houses and for strata properties from 1991 to 2018 in all North Coast LGAs. It is clear that the median sales prices are highest in the far North Coast LGAs of Ballina, Byron and Tweed.

www.facs.nsw.gov.au

www.facs.nsw.gov.au

Purchase Affordability Purchase affordability in the majority of North Coast LGAs declined dramatically

between 2001 and 2006. Purchase affordability has been close to 0% for the majority of North Coast LGAs up until 2016. There has been some improvement in purchase affordability in most North Coast LGAs since then. Kyogle, Richmond Valley and Kempsey are the only LGAs that had a higher proportion of properties affordable for purchase by very low income households than the average for the Rest of NSW in September 2017. For the rest of the North Coast region, it is virtually impossible for low income earners to access affordable properties for purchase. Byron has 1.2% affordable for purchase, Ballina 1.5%, Bellingen 1.6%, Port Macquarie-Hastings 1.8%, Tweed just 3.6%, Coffs Harbour and Lismore 4.8% and Nambucca 5.5%.

The graph below shows the purchase affordability for very low income households in the North Coast LGAs from 2001 to 2017.

The situation for low income households in the North Coast region is somewhat better, with five LGAs (Clarence Valley, Kempsey, Kyogle, Nambucca and Richmond Valley) having a higher proportion of affordable purchase than the Rest of NSW average of 24.7% at September 2017. However there are still large parts of the North Coast that are not affordable for purchase for low income households, relative to the Rest of NSW. Byron had the lowest proportion of properties affordable for purchase by low income households with just 1.9%, followed by Ballina with 4.9%, Port Macquarie Hastings with 7.9% and Tweed with 10.7%.

As is the case with rental, much of the North Coast is not affordable for purchase by lower income households.

www.facs.nsw.gov.au

Additional Data

More detailed housing data and tables used in this Snapshot are available from the Local Government Housing Kit Database on the DCJ website at:

https://www.facs.nsw.gov.au/resources/nsw-local-government-housing-kit/chapters/local-government-housing-kit-database

More detailed information on Rent and Sales data is available from the Rent and Sales report on the DCJ website at:

https://www.facs.nsw.gov.au/resources/statistics/rent-and-sales/dashboard

More information on vacancy rates is available from the Real Estate Institute of NSW website (see their media releases on vacancy rates):

https://www.reinsw.com.au/

www.facs.nsw.gov.au