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Seaside nest eggs go off the boil

Photo: Dean Sewell

Beachside property owners may have to settle for much lower returns over the next 10 years as the decade-long property boom that tripled house prices in many suburbs runs out of puff.

Figures prepared for the Herald by Australian Property Monitors show massive increases along the metropolitan coast over the past 10 years: from 345 per cent at Whale Beach in the north to 230 per cent at Bundeena in the south.

Of 36 beachside suburbs studied, 20 had a median house price of more than $1 million. Ten years earlier, only eight of those suburbs had a median higher than $400,000.

The soaring prices could have an unwelcome social impact, said Geoff Withycombe, executive officer of Sydney Coastal Councils. The State Government must improve access to affordable housing by increasing the statutory allocation of such housing, he said.

The property boom also caused social dislocation, he said. There was demand in coastal suburbs for lower-income workers but they had little chance of living nearby, while "the kids who live in these areas can't afford to buy a house in their own suburbs. It's a major social issue for Sydney."

Phil Raskall, an urban economist, said many grandparents and their baby-boomer children were likely to have enjoyed big property-driven increases in wealth, while the next generation was shut out of the market. As the eldest generation died off, "it's possible there might be arrangements made to skip a generation, with the grandparents saying it would be better to pass it on to the [grandchild] instead of the already well-off baby boomers".