Byron Bay NSW Property Investment

THE MARKET

Median house price in Byron Bay sits at $2,500,000 with 59 days on market and a 2.0% vacancy rate. This is a balanced market right now.

- **Median house:** $2,500,000 | **Units:** $1,365,000 - **Gross yield:** 2.7% | **Net yield:** 1.2% - **5yr price CAGR:** -7.9%/yr | **3yr forecast:** -8.9%/yr - **Population:** 6,330 | **Owner-occupier rate:** 35% | **Affluence:** High

- **Supply pipeline:** Moderate — Development activity consistent with long-term averages

RENTAL SNAPSHOT

- **Vacancy:** 2.0% (worsening) | **Rental demand:** High - **Median weekly rent:** $1,300/wk | **Days on market:** 59 (worsening) - Balanced market — vacancy manageable but monitor trend.

SHORT-TERM RENTAL

- **Median nightly rate:** $350/night | **Occupancy:** 68% - **Estimated annual STR gross:** ~$86,870/yr - **vs long-term rent:** $67,600/yr (+29% STR premium — factor in higher management costs)

INFRASTRUCTURE & CATALYSTS

- No major confirmed infrastructure projects on record. - **Transport:** Standard suburban transport access

BULL CASE

If Byron Bay maintains 3%+ annual growth and vacancy stays below 1.4%, median prices could reach $2,875,000 within 3 years with yields compressing slightly as capital values rise.

BEAR CASE

A market correction or interest rate shock could see prices in Byron Bay pull back 10-15% from $2,500,000, with vacancy rising to 3.6% and rental yields softening as tenants gain leverage.

KEY RISKS

- Negative price growth suggests a softening market - Premium price point limits buyer pool and increases interest rate sensitivity - Distance from CBD may limit long-term capital growth potential

COMPARABLE MARKETS

- **Zetland** (NSW): $2,610,153 median, 2.0% yield, 8.7% 1yr growth - **Newtown** (NSW): $2,000,000 median, 2.4% yield, 6.8% 1yr growth - **Glebe** (NSW): $2,700,000 median, 1.8% yield, 3.3% 1yr growth

THE PLAY

Byron Bay carries elevated risk that outweighs potential returns at current levels. A trough market combined with moderate vacancy risk warrants caution. Avoid new acquisitions unless significant discount to median pricing is achievable. Re-evaluate if vacancy falls below 2.5% or annual price growth exceeds 3%.

- Entry range: $2,250,000 – $2,750,000 - Minimum gross yield to target: 4.5% - Watch signal: vacancy dropping below 2% and days on market falling below 35

This analysis is for informational purposes only and does not constitute financial, legal, or investment advice. Seek professional advice before making investment decisions.