NSW towns with the biggest house price increases

“It’s probably a chain reaction of people moving out of Sydney, being priced out of Sydney, and then people moving out of Wollongong because of being priced out. People are no longer moving to train stations, they’re moving to towns,” Mr Rawnsley said.

He said house price growth has slowed due to rising interest rates and falling demand for home purchases.

“We are back to market fundamentals of what locals can afford. Higher interest rates are impacting households’ ability to borrow,” Rawnsley said.

“But we see people with higher incomes moving further afield. They bring with them higher purchasing power than others.

House prices in Byron Bay rose 9.3 per cent in the year to June and Christian Sergiacomi of Pacifico Property said while some properties were reselling below their 2021 peak, others were selling for more, particularly turnkey properties.

For example, two townhouses in the Asana development sold for $4.5 million and $4.45 million, respectively, at the peak of the 2021 market, and later resold for $4.6 million and $4.8 million.

“It’s more about the type of product people are willing to pay for, if it’s complete and doesn’t require the question mark of a builder or renovation, they are more likely to buy it once they understand what they are getting and know it’s complete,” he said.

He is still fielding inquiries from buyers in Sydney and Melbourne, although not as many as during the boom years, but he said there were also a lot of transactions between locals.

“There’s one person who sold in Wategos and bought in Coopers Shoot. There’s another person who sold in town for $4 million and bought in Suffolk Park for $3 million to reduce the mortgage a bit,” he said.

He said Byron Bay’s warm climate was a drawcard for homebuyers in the capital city compared with options such as the NSW South Coast or Central Coast.

“It’s obviously a special place and it’s a different feeling when you walk up to the lighthouse or walk along the beach or sit out front and watch the whales.”

Andrew Curlewis of Yass Valley Real Estate said buyers had been moving from Canberra to the more affordable Yass Valley, where house prices had risen 12.5 per cent in a year.

He believes buyers can find a four-bedroom home on 700 square metres for about $750,000 and enjoy country living, with easy access to schools, doctors and a close community.

“When you have a large affluent population like Canberra within an hour’s drive, it obviously has an impact on your market,” he said.

As well as Canberra buyers, locals have also been trading up, with some investors also buying from further afield because of capital growth. Some Sydneysiders have been drawn to the region because of its cool-climate wineries.

But he said first-home buyers were few and far between because high rents made it difficult to save for a deposit.

“The high end of the market, $1 million and up, is developing very well. So people with money can still buy it, but people without money find it hard to buy it,” he said.

He said while he believed prices had recovered slightly since their lockdown peak, they were still above pre-pandemic levels.