Buyers keen to jump on the property ladder in Australia’s most coveted coastal town could find themselves spoilt for choice with more homes hitting the market amid a pullback in prices.  

The number of homes listed for sale in the picturesque north coast beachside town of Byron Bay, which became a buyer hotspot during the pandemic, have increased by almost a third over the past year, at the same time house prices have fallen almost 20% to a median of $2.5m according to PropTrack.

PropTrack senior economist Eleanor Creagh said would-be buyers were now faced with greater bargaining power when it came to negotiating price.

“It's allowing them to potentially secure properties for more competitive prices given there is a lot more choice for buyers,” she said.

Despite the recent cooldown, the median price for a Byron Bay house has risen 60% over the past five years.

Byron Bay has recorded a pullback in home prices over the past year after booming during Covid. Picture: Getty

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“Byron is probably a market that it's always going to have some level of demand and popularity,” Ms Creagh said.

“It's one of those iconic lifestyle coastal markets and what we're seeing at the moment is a normalisation back to more reasonable market conditions.” 

Buyers not prepared to pay 'pandemic prices'

Local real estate agent Christian Sergiacomi from Pacifico Property told realestate.com.au a number of properties purchased during the peak of the pandemic were now returning to the market.

“I wouldn’t say there’s a load of them, there are definitely some sales that are happening for people who purchased in the rage - as we called it the 2021 peak -  and they’ve now worked out that they don’t need to move, or don’t want to move now that everything has calmed down,” he said.

One example is the listing at 2.04/139 Jonson Street which was purchased off the plan in 2020, but has been re-listed after its owner upgraded to a house instead.

Properties like this new four-bedroom unit in Byron Bay are taking longer to sell as the market normalises. Picture: realestate.com.au

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Following a few price adjustments in the six months it has been listed, the four bedroom apartment is now priced at $2.55 million.

Mr Sergiacomi said typically the average time on market in Byron Bay was nine months, but the volume of buyers has changed with many “sitting on their hands”.

While some listings were on the market longer than others, he said the Byron Bay market was offering better value now than during the pandemic.

“I think it’s just recalibrated to the norm. Even last year people were still trying numbers that were 2021 numbers and therefore people weren't prepared to pay,” he said.

'Must Be Sold', this cottage in the heart of Byron Bay has been listed with a revised price guide of $2.9m. It has been freshly painted and modernised since it last sold for $2.75m in February 2021. Picture: realestate.com.au/buy

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Interest rate rises coupled with less buyer demand post-pandemic have contributed to the jump in homes hitting the market, Ms Creagh said.

“We have certainly seen the incredibly elevated demand experience throughout the Covid period has eased back to more average levels,” she said.

“It’s probably a normalisation of market activity in terms of demand tapering off back to more average levels and supply increasing, creating less competitive market conditions, and more of a buyers’ market.

“Obviously interest rates are a lot higher and affordability has deteriorated significantly so buyers aren’t necessarily able to take on as much debt that they could have previously, so that's probably presenting further downward pressure on price momentum.”

Hollywood shine wears off

Byron Bay became a pandemic haven for a raft of Hollywood celebrities, such as Chris Hemsworth and Zac Efron, contributing to the surge in property prices.

But the so-called Hemsworth effect appears to have worn off, with many A-listers since returning to their overseas bases.

The so-called ‘Hemsworth effect’ seems to have reversed in the popular north coast town of Byron Bay. Picture: Celeste Humphrey

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Still, the coastal hub remains a celebrity hotspot with locals including TV presenter Carrie Bickmore, The Block co-host Shelley Craft, international model Gemma Ward, and actress Isabel Lucas.

But that doesn't mean it's all glitz and glamour in the property market. Natalie Bassingthwaighte’s plans to rent out her former Byron Bay home haven’t gone according to plan, with the singer and her estranged husband forced to slash the price from $2850 a week to $2500.

Late last year, renowned fashion designer Wayne Cooper and estranged wife, Sarah Marsh, copped a big hit on their resort-style home near Byron Bay, which they bought for $5.09 million in March 2022. Sales records show the home has since sold at a substantial discount of $3.871m in October 2023.

Wayne Cooper and Sarah Marsh sold their Myocum resort-style home last year at a discount.

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After sitting on the market for some time and failing to sell at auction last year, a four bedroom home at 21 Carlyle Street, Byron Bay has been listed with a new price guide of $2.9 million.

With its listing stating it ‘must be sold,’ the home is a stone’s throw from the beach, and has been modernised while retaining its yesteryear charm.

Sales agent Damien Smith from Ray White said Byron Bay still offers good value for money despite properties not fetching the high prices achieved two to three years ago.

 “I think it’s still the same spectacular place it's always been,” he said.

“It’s a good place to be buying in and it’s probably never going to really go backwards in the long term. It’s going to go further and further up.”

Turnkey homes ready to move in with no further work needed were in high demand, according to Nick Dunn from McGrath Byron Bay.

 “The market is really good and if you align with the market that you choose to sell in, well then you are in an area that you will always sell,” he said