Byron Bay’s soaring popularity as a playground for the rich, famous and sea-changers has pushed its house prices to record levels – and into the $3 million club.
Renowned for its stunning beaches, relaxed lifestyle and being home to celebrities like Chris Hemsworth and Elsa Pataky, the world-famous coastal town is one of Australia’s newest suburbs with a $3 million-plus median house price.
The ranks of the $3 million club have swelled during the pandemic to reach a record 120 suburbs, thanks to soaring property prices and a booming luxury market.
See the full list of new $3 million suburbs below.
PropTrack director of economic research Cameron Kusher said the Byron Bay market has recorded exceptional price growth over recent years.
“While Byron Bay has always been one of the most expensive regional suburbs in New South Wales, there were always many Sydney suburbs more expensive than it,” Mr Kusher said.
“It’s now become significantly more expensive than most Sydney suburbs.”
Byron Bay’s median house price has more than doubled during the pandemic to now sit at $3.09 million, PropTrack data shows.
Property prices in the famous coastal town of Byron Bay have skyrocketed during the pandemic. Picture: Getty
“Decades ago it was a sleepy little surf town but it first grew as a holiday destination and has now evolved further to a township where many people from Sydney own property and where people that don’t need to be in an office regularly have decided to base themselves,” Mr Kusher said.
While there has been much talk about ‘the Hemsworth effect‘ pushing up property prices, First National Byron director Su Reynolds said the influx of city dwellers during COVID has had the biggest impact on the market.
“So many people have wanted to live here for so many years – they holiday here regularly, they get married here, they always want to end up moving here – and what stops them from doing that is that our average incomes here are much lower than the metropolitan areas,” she said.
“Of course, COVID completely tipped that on its head, with a mobile workforce enabling buyers to be able to move here and bring a city income with them.”
Many people who had dreamed of living in Byron Bay decided to finally make the move during the pandemic. Picture: Getty
Ms Reynolds said the high demand and low supply, including a lack of available land, had created “a perfect storm” leading to increasing prices.
“It’s very hard to get anything around or under $1 million. Even our two-bedroom unit market has exceeded $1 million now,” she said.
“There’s definitely wealthy people buying the $10 million and $20 million properties, but even $3 million is really a second home buyer here now.”
Ms Reynolds said Byron Bay’s natural beauty will always be a major factor in its appeal, with the local community pushing to keep the town’s development low density.
Mr Kusher said supply is a big issue in the local area, with many locals and local councillors generally being anti-development.
The Byron Bay area was already experiencing a housing shortage before the devastating floods in large areas of coastal NSW, including the Northern Rivers region, and South East Queensland from late February.
The Byron Shire Council declared a housing emergency in March 2021 – and that was before the flooding exacerbated the issues of limited housing supply, a lack of affordable housing and homelessness.
Byron Bay’s median rent is now $1000 a week for a house, and Ms Reynolds noted there is a shortage of rental accommodation.
Mr Kusher said housing is out of re
ach for locals. “But for wealthy people from Sydney either looking to invest or move, the prices are not particularly unaffordable.”
Mr Kusher expects the rate of price growth will slow in Byron this year, like elsewhere.
“We’re already seeing some weakening of demand and sales in the region and the cost of housing is already so high,” he said.
The $3 million club expands further beyond Sydney
While Greater Sydney still dominates the $3 million club, Australia’s housing boom has both swelled its ranks and further extended its reach beyond Harbour City suburbs and the likes of Toorak in Melbourne.
The number of $3 million suburbs doubled to 30 during the first year of the pandemic in 2020 – and more than tripled last year. Another 16 suburbs have been added to the list so far in 2022.
Mr Kusher said the rise in suburbs with a median house price of $3 million-plus over the past year mirrors broader market trends, with prices rising rapidly and the luxury housing market recording particularly strong growth.
“With the pandemic in full swing over the past year people have been willing to dedicate more of their income to housing and less to things like social and travel, largely because they weren’t allowed to do so,” he said.
“As a result, the higher end of the housing market in particular has seen strong price growth, which has pushed more suburbs into the $3 million bracket.”
Greater Sydney is home to 103 of the 120 suburbs that now have a $3 million-plus median.
The list is headed by the top-end of the market: the likes of Tamarama ($9.9 million median house price), Vaucluse ($8.238m), Whale Beach ($7.9m) and Bellevue Hill ($7.45m). Point Piper is one of Australia’s most expensive suburbs, but doesn’t appear in the latest list because it did not have enough house sales over the 12 months to April.
The $3 million members are spread across Sydney, although the eastern suburbs, north shore, northern beaches and the inner west feature strongly.
Mr Kusher said the increased numbers in Sydney reflect the fact that it is Australia’s most expensive city for housing and the rapid rise in prices.
“Of course, many of these suburbs are desirable locations either close to the city, close to the water or both, and this is increasingly what homebuyers have been seeking in Sydney throughout the past year,” Mr Kusher said.
Eleven of this year’s 16 entrants come from Sydney, including Drummoyne ($3.038m), Abbotsford ($3.13m), Breakfast Point ($3.2m), and Haberfield ($3.06m) in the inner-west.
| Suburbs new to $3m club in 2022 | Region | Median house price |
|---|---|---|
| Abbotsford NSW | Greater Sydney | $3,130,000 |
| Breakfast Point NSW | Greater Sydney | $3,200,000 |
| Byron Bay NSW | Rest of NSW | $3,090,500 |
| Church Point NSW | Greater Sydney | $4,150,000 |
| Cronulla NSW | Greater Sydney | $3,061,000 |
| Dalkeith WA | Greater Perth | $3,100,000 |
| Drummoyne NSW | Greater Sydney | $3,038,000 |
| Gerroa NSW | Rest of NSW | $3,050,000 |
| Haberfield NSW | Greater Sydney | $3,060,000 |
| Kyle Bay NSW | Greater Sydney | $3,830,000 |
| Lane Cove West NSW | Greater Sydney | $3,080,000 |
| Malvern VIC | Greater Melbourne | $3,075,000 |
| Myocum NSW | Rest of NSW | $3,050,000 |
| Port Hacking NSW | Greater Sydney | $3,100,000 |
| Sandringham NSW | Greater Sydney | $3,062,500 |
| Sylvania Waters NSW | Greater Sydney | $3,000,000 |
Melbourne now has eight $3 million suburbs, with Malvern ($3.075m) joining the likes of Toorak ($4.955m), Brighton ($3.375m), and Canterbury ($3.495m).
While Canberra already had a $3 million suburb in Forrest ($3.43m), two of Perth’s most expensive suburbs are now on the list after Dalkeith ($3.1m) joined Peppermint Grove ($3.52m) this year.
Apart from its sheer numbers, one of the biggest changes in the $3 million club during the pandemic has been the rise in its regional members.
Byron Bay and the nearby towns of Ewingsdale ($3.325m), Newrybar ($5.0m), and now Myocum ($3.05m) are members, as is Gerroa ($3.05m) on the NSW South Coast.
The other regional $3 million suburb is Sunshine Beach ($3.422m) on the Sunshine Coast, one of Australia’s hottest commutable lifestyle hubs.
A $3 million suburb is ‘not the norm’ for Queensland
Sunshine Beach is Queensland’s first $3 million suburb, thanks to the huge buyer demand for the Sunshine and Gold Coasts in particular and influx of southerners during the pandemic.
Sunshine Beach’s median house price has almost tripled in five years to now stand at $3.42 million.
Sunshine Beach is Queensland’s first $3 million suburb. Picture: Getty
While Brisbane’s most expensive suburb of Teneriffe could join the $3 million club in the future, Real Estate Institute of Queensland CEO Antonia Mercorella said such high median sale prices are the exception.
“Whilst we’re now seeing a lot more $1 million suburbs in our state, I think it will be a long time before we start to see $2 million and $3 million medians becoming part of the normal landscape,” Ms Mercorella said.
The high-end luxury and prestigious homes selling for extraordinary amounts were “certainly not the norm”.
“While those sort of sales are a lot more commonplace in Sydney and Melbourne, they’re still very much the exception rather than the rule here in Queensland,” she said.
Sunshine Beach’s recent “extraordinary” sales include a beachfront property that sold for $28.5 million – more than double what was paid for the property less than a year ago – while a double block with an old house down the road sold for $21.5 million.
Teneriffe’s median house price has also been heading towards the $3 million mark during the COVID boom, currently sitting at $2.5 million.
Ms Mercorella said Teneriffe “is not your normal suburb”.
“Teneriffe is a pretty unique suburb. It’s obviously very close to the city, there’s very few houses there and it’s a tightly-held area.
“So you can see why that median house price is so high, as opposed to a suburb that’s still in the Brisbane local government area but it’s more, dare I say, a ‘run of the mill’ suburb, whereas Teneriffe is not that.”
Homes on Teneriffe Hill and riverfront Catalina residences on Macquarie Street are some of Brisbane’s most exclusive real estate, and can lift Teneriffe’s median price when they come on the market.
Teneriffe Realty principal Jennifer Lockley said there is strong demand for both apartments and the limited number of houses in the suburb.
“Three bedders are very hard for people to get their hands on or anything along the river, two or three bedders,” she said.
“There’s huge demand and most of it is not interstate like people think it is, it’s local.”
She said a large part of the market is people selling larger homes in places like Noosa or Sunshine Beach and buying smaller apartments there and in Teneriffe or New Farm, or downsizing in the Brisbane suburbs and buying a second home on the Sunshine or Gold Coasts.
But many vendors who are downsizing are now waiting until they find another home before listing their properties, meaning there are not as many listings as last year, she added.
Ms Lockley said despite its title as Brisbane’s most expensive suburb, Teneriffe still has affordable properties and a range of apartments, albeit with a limited supply of houses.
“People see that median price and think they can’t afford it but they can.
“You can still buy some two bedrooms on the river for under $1 million and one bedders start in the $300,000s and two bedders in the $400,000s.”
Buyers prepared to pay top dollar for lifestyle
The surge in demand – and prices – for lifestyle properties and locations has pushed more coastal suburbs into the $3 million list during the pandemic.
The long list of coastal suburbs in the $3 million club now includes Cronulla ($3.061m), Bondi Beach ($3.855m), Narrabeen ($3.85m), Coogee ($3.71m) and Avalon Beach ($3.2m) in Sydney plus Byron Bay, Sunshine Beach and the Mornington Peninsula’s Portsea ($3.75m) and Flinders ($4.02m).
A wave of buyers making a sea change during the pandemic have headed to Melbourne’s Mornington Peninsula, where the supply of properties for sale has been limited for some time. Picture: Getty
Mr Kusher said the inclusion of so many suburbs close to the ocean or waterfront reflects the drivers of the market over the past year – lifestyle and the money saved during COVID and then invested in luxury property.
“As highlighted by these suburbs joining the $3 million range, there is a lot of money around and buyers are prepared to pay top dollar to secure properties in these lifestyle markets.”
Kay & Burton – Flinders and Red Hill partner Tom Barr Smith said the lifestyle shift after lengthy COVID lockdowns in Melbourne has had a massive impact on the local market.
Mr Barr Smith is not surprised Flinders broke the $3 million median barrier.
“When you can see other suburbs that have broken that sort of barrier, I think it’s completely logical that Flinders would be one of them.
“It’s just such a tightly-held area and there’s no subdivision, no development, and very few properties available at any one time.”
Homes in the Mornington Peninsula village of Flinders have been in high demand, with this five-bedroom home on 5.5 acres on the market with a price guide of $6.8 million to $7.48 million. Picture: realestate.com.au/buy
Mr Barr Smith said there has been strong activity across all price points during the pandemic, adding the strongest this year has been below $4 million.
“The starting point for Flinders is really $2 million now, or very close to it. Even apartments are closing in on $1 million now, and not that there are many of those.”
Mr Barr Smith said Flinders is still a seasonal village.
“There is a reasonable number of people that are looking to move this way from Portsea and Sorrento – they’re obviously still very popular areas – because it’s quieter.”
The COVID-driven lifestyle shift has also sent demand and housing prices soaring in popular tree-change markets like the NSW Southern Highlands, home to some stunning grand estates.
The median house price in the Bowral suburb of Burradoo has now reached $2.7 million, putting it within reach of the $3 million club.
DiJones – Southern Highlands partner Michael Cawthorn said $2 million was entry level for a house in Burradoo now.
“If a house comes up at $2.5 million it will probably sell in two or three or four days, because it’s a seriously popular price range,” he said.
Mr Cawthorn has sold several homes in Burradoo for between $4 million and $6 million this year.
A four-bedroom home with a new ensuite but no main bathroom, as it had been pulled out ready for renovation, recently sold for $3.65 million. The lack of a bathroom didn’t faze the interior designer buyer.
“To the average buyer, yes, it had no main bathroom. It shows the strength of the market.”
Mr Cawthorn said Burradoo had always been a popular suburb with its beautiful tree-lined streets and being close to the township of Bowral.
COVID had boosted the appeal of Burradoo and other Southern Highlands towns, including among a younger demographic who were priced out of Burradoo but could look for lower-priced options in towns like Mittagong and Moss Vale.
“During COVID a lot of people wanted to not just get away from Sydney but get away from people,” Mr Cawthorn said.
The market had increased so much during the pandemic that some vendors had made more than $1 million in a year or $2 million in a few years, he said.
The $3 million club may get even bigger
More suburbs are likely to break the $3 million median this year, although price growth is expected to continue to slow after increasing rapidly during the pandemic.
“Although price growth has slowed and households are likely to spend less of their income on housing and more on things like travel and entertainment, prices are still forecast to rise further in 2022,” Mr Kusher said.
“Given this I would expect more suburbs to break into the list over the coming year although the number is likely to be relatively small compared to the number of new entrants last year.”
PropTrack analysis shows another 48 suburbs are within $500,000 of a $3 million median house price, with Teneriffe the only Queensland contender and Burradoo the only regional possibility based on current prices.
| Suburb | Region | Median house price | Gap to $3 million |
|---|---|---|---|
| Arcadia NSW | Greater Sydney | $2,987,500 | $12,500 |
| Lane Cove NSW | Greater Sydney | $2,979,000 | $21,000 |
| North Manly NSW | Greater Sydney | $2,950,000 | $50,000 |
| Cabarita NSW | Greater Sydney | $2,915,000 | $85,000 |
| East Melbourne VIC | Greater Melbourne | $2,900,000 | $100,000 |
| Maroubra NSW | Greater Sydney | $2,900,000 | $100,000 |
| Russell Lea NSW | Greater Sydney | $2,900,000 | $100,000 |
| St Ives NSW | Greater Sydney | $2,900,000 | $100,000 |
| St Ives Chase NSW | Greater Sydney | $2,895,000 | $105,000 |
| Kenthurst NSW | Greater Sydney | $2,880,000 | $120,000 |
| Manly Vale NSW | Greater Sydney | $2,870,000 | $130,000 |
| Lilli Pilli NSW | Greater Sydney | $2,850,000 | $150,000 |
| Sydney NSW | Greater Sydney | $2,845,000 | $155,000 |
| Middle Park VIC | Greater Melbourne | $2,829,000 | $171,000 |
| Killarney Heights NSW | Greater Sydney | $2,812,500 | $187,500 |
| Rhodes NSW | Greater Sydney | $2,811,000 | $189,000 |
| Balmain East NSW | Greater Sydney | $2,800,000 | $200,000 |
| Concord NSW | Greater Sydney | $2,800,000 | $200,000 |
| Balwyn VIC | Greater Melbourne | $2,785,500 | $214,500 |
| Crows Nest NSW | Greater Sydney | $2,777,500 | $222,500 |
Not surprisingly, most of the contenders are in greater Sydney with Arcadia ($2.987m), Lane Cove ($2.979m), North Manly ($2.95m), Cabarita ($2.915m), Maroubra ($2.9m), Russell Lea ($2.9m) and St Ives ($2.9m) all within striking distance.
Maroubra is close to breaking into the $3 million club, as buyers prioritise lifestyle factors such as being close to the water like at this home. Picture: realestate.com.au/buy
The list also includes the likes of Kenthurst ($2.88m), Manly Vale ($2.87m), Rhodes ($2.811m), Balmain East ($2.8m), Bondi Junction ($2.765m), Wollstonecraft ($2.71m), Balmain ($2.625m), Gladesville ($2.622m) and Vineyard ($2.587m).
Twelve Melbourne suburbs are within that range including Middle Park ($2.829m), Balwyn ($2.785m), St Kilda West ($2.75m), Hawthorn ($2.652m) and Armadale ($2.61m), while East Melbourne ($2.9m) is close to getting back into the $3 million club.
Beachside Cottesloe ($2.525m) may become Perth’s third $3 million-plus suburb.
Mr Kusher said many of the $3 million contenders also had the lifestyle factors people look for, such as a tree or sea change or being in the capital city and close to water.
“It seems we’re also starting to see more suburbs that are inner-city established markets nudging the $3 million mark,” he added.
