The next big thing in property presents sun, sand – and investment opportunities

F or anyone who has experienced family road trips along the Pacific Highway, The Big Banana at Coffs Harbour is a memorable landmark. When Australia’s first “big thing” was built almost 50 years ago, it literally represented the fruits of the labour for a parochial town sitting halfway between Sydney and Brisbane.

But what a difference half a century makes. 

Soon that local icon, now a family amusement park, will be bypassed with a 14km $2.2 billion highway upgrade, transforming the coastal city into a destination ripe for the picking.

Going bananas 

The 2021 Census named health care and social assistance as the leading employer in Coffs Harbour followed by retail, education, plus accommodation and food services. These in-demand employment sectors, as well as a significant amount of infrastructure already in the pipeline, continue to attract newcomers to the area.

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Coffs Harbour recently welcomed a $194 million expansion to the local hospital and continues to introduce more carriers to the airport with daily direct flights to Sydney and Melbourne. It has a growing tertiary education campus with TAFE and University of Southern Cross courses, and an international sports stadium that hosts star-studded events.

Culture is also high on the agenda. In June 2022 Hollywood heavyweight Russell Crowe, who owns a farm in nearby Nana Glen, announced his intention to back a $438 million world-class film studio for Coffs Harbour.

Mountains meet the sea

The Coffs Coast is on the land of the Gumbaynggirr people and encompasses a collection of suburbs and townships including Nambucca, Urunga, Bellingen, Sawtell, Coramba, Moonee Beach, Sapphire Beach and Woolgoolga.

Often described as the place “where the mountains meet the sea” the sub tropical region, which is home to 78,759 people (and forecast to hit 100,000 by 2041 according to council estimates), is the meeting point of the Great Dividing Range and the Pacific Ocean. Due to its unique topography, Coffs ticks plenty of coastal boxes, but also offers leafy acreages and hinterland estates with ocean views. However, it’s this landscape which presents challenges for residential development and the supply of new housing.

Slow and steady

Homebuyer demand and prices in greater Coffs Harbour skyrocketed in 2021 but spent much of 2022 slowly declining as interest rates climbed. However, limited supply is likely to prevent significant price falls. 

“Based on the current peak in the cash rate expected for early 2023 and a lagged response in the property market, we could see a floor in price falls across Northern NSW lifestyle markets in the second half of this year,” says Eliza Owen, head of residential research Australia at CoreLogic.

According to CoreLogic the median house price in Coffs Harbour is $815,000, although there are some coveted suburbs such as Sapphire Beach to the north with a median of $1.39 million. 

“Values [in the Coffs Harbour region] have fallen a relatively mild -5.0 percent from a peak in August,” she says. This follows an upswing of 56.3 percent, so overall values are still up 47.9 percent. While COVID no doubt unlocked some value in Coffs Harbour that couldn’t be realised before remote work was so normalised, there are some headwinds for the purchasing market.”

New kids on the block

A pipeline of investment in Coffs Harbour caught the eye of residential developer Third.i. Late last year the group launched Sable at the Jetty, a medium-density development of 35 apartments.

“Part of the reason we wanted to target Coffs was because we believe there’s an undersupply of the style of apartments we create; a luxury lifestyle, or a larger downsizer product,” says Third.i director of sales marketing, Luke Berry.

“Coffs Harbour ticks so many boxes. I used to holiday there as a kid and I love the region. It’s only going to become more desirable as workers continue to turn to remote working and the ageing population seeks out appropriate areas to retire to. 

“Coffs is high on the list for anyone looking at a strategic investment or secure retirement,” he says.

Martin Wells, principal of McGrath Real Estate Coffs Harbour, says despite a slow finish to 2022, the forces of supply and demand kickstarted 2023.

“By mid January we noticed our online buyer inquiries had doubled compared with those softer episodes of last year,” Wells says. 

“The supply shortage is still the dominant driver of prices holding and I’d expect they’ll continue to climb again throughout 2023.” 

Top end prices, locally considered to be above the $1.5 million dollar mark, have “corrected”. However, Wells suggests the trough could have already passed. 

“We’re probably seeing about 5 to 10 percent off the price of top end properties,” he says. “But I think that’s probably the last of it because demand is coming back into that price point.

“Traditionally, around 30 percent of our inquiry might’ve been from Melbourne or Sydney purchasers, now it’s probably closer to 50 per cent. 

“So there’s still a large amount of money around.”

David Malvern, regional manager at McDonald Jones Homes says the limited land available meant any price decreases were unlikely to linger.

“If there was a larger supply I’ve no doubt new home sales would increase significantly,” he says.

“Either customers can’t find land, or when they do, often the topography is really not ideal for an affordable home. 

“They might find themselves having to spend $100,000 on earthworks just to get a block ready.”

He says while the supply of land  is the greatest challenge for buyers in the area today, it ultimately translates to a positive for anyone holding property for the long haul.

“You’ve got such a high demand for housing and a limited supply that if you’re an investor, or looking to move into Coffs Harbour, you’re going to benefit,” Malvern says. “I simply can’t see the market producing the amount of land and housing that’s actually needed to meet demand.”