Episode 173 | Buying in Byron Bay: Overhyped or shrewd investment? | Michael Murray, Byron Property Search

Who gets to live in paradise? Influencers, surfers and remote workers.
Covid has accelerated the remote work movement. Australians have fled the big city to greener pastures and clearer shores. What better place to a sea change, tree change than Australia’s most eastern tip. Global media coverage has put Australia at the forefront of Covid safe spots, this has drawn celebrities, actors and affluent business owners to find sanctuary in a small beach town in northern New South Wales.

Byron Bay has grown from what was a small tight-knit beach community, to become Australia’s most expensive location to buy property, with median house prices in Byron Bay eclipsing the Eastern Suburbs of Sydney.

In this episode, we shine the light on the Byron Bay property market, with no better expert than pioneering buyers agent, Michael Murray. Michael is a born and bred Byron Bay resident, who has helped families, friends, celebrities and entrepreneurs to find their slice of paradise. The influx of new money has pushed locals out and put mansions on hills, has this changed the bay forever?

RELEVANT EPISODES:
Suburb Trends April 2021 | Highest median growth suburbs!
Episode 160 | Working from Home Movement: Has Covid accelerated the inevitable | Soren Trampedach, Work Club Global
Episode 158 | Top economist puts Australia in the world picture | Warren Hogan

GUEST LINKS:
https://www.byronpropertysearch.com.au/
Facebook.com/byronpropertysearch
Instagram -@byronpropertysearch
https://www.linkedin.com/in/michael-murray-69b21510/

HOST LINKS:
Looking for a Sydney Buyers Agent? www.gooddeeds.com.au
Work with Veronica: https://linktr.ee/veronicamorgan

Looking for a Mortgage Broker? www.wealthful.com.au
Work with Chris: hello@wealthful.com.au

Send in your questions to: questions@theelephantintheroom.com.au

EPISODE TRANSCRIPT:
Please note that this has been transcribed by half-human-half-robot, so brace yourself for typos and the odd bit of weirdness…
This episode was recorded in April 2021.

Veronica Morgan: COVID-19 has sped up many sea change and tree change plans. And one area reaping the benefits is Byron Bay and its hinterland. What does this migration from the cities mean for that property market? Will it become a proxy satellite suburb of Sydney and Melbourne? Will the locals be priced out forever? Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about. I'm Veronica Morgan, real estate agent buyer's agent co-host of Foxtel's location, location, location, Australia, and author of auction ready.

Chris Bates: And I'm Chris Bates mortgage broker. Before we get started, I need to let you know that nothing we say on you can be taken as personal advice. We always recommend you engage the services of a professional.

Veronica Morgan: Don't forget that you can access the transcript for this episode on the website, as well as download our free fall or forecast report, which experts can you trust to get it right?

Veronica Morgan: The elephant in the room.com did I use probably Australia's most desirable sea change. Destination is bar and Bay and large numbers of Australians have been prompted to make the move there post lockdown. Today. We want to understand the impact on the property market. We're joined by Michael Murray, principal of bar and property search buyer's agency based in Byron Bay. Michael has been servicing the whole of the Northern region. Sorry, do that again. Michael's been servicing the whole of the Northern rivers for over 20 years and has lived in the bar and Bay area since the mid eighties. So we figured he's well-placed to share what's happening on the ground, both from a professional and local perspective. Thanks so much for joining us.

Michael Murray: Thanks for having me Veronica,

Chris Bates: I think in the last year or so,

Michael Murray: It was really a funny situation. Like most of Australia in March, April, we thought it was going to be doom and gloom and everybody was expecting a big downturn then like may, June, it started to it, wasn't the end of the earth. And then ever since then, it's been an exponential growth that none of us have seen. I will have been a buyer's agent for over 20 years. I've lived in this area and I've experienced the fume boom periods mainly the nineties. And then there's 2002, 2003 was massive. But this is just so off the chart. It's really hard to put a growth on it, but, you know, I think since I haven't got the stats that if I was to guess since last year, we've probably seen a 35% growth in prices, but it's patchy in that you've got some we're seeing really a massive increase in over, not over payment, but people are just going over the top for well-placed properties in a good location that are finished that in the three to $8 million range of people who have just gone on out of here and they're cashed up and they're either ex-pats or salads from the city and they're just making a move for the family.

Michael Murray: And I've just got you know, I want to get something for the rest of my life and they're thinking pool, water tanks, veggie gardens, solar system kind of land, and a few acres within a 10 or 15 to 20 minute drive from the beach. That's kind of mayor from heaven for them at the moment. And that's been like massive.

Veronica Morgan: Do you know? It's funny because like, you know, most people, when they do the sea change on a tree change, they sell out of their expensive capital city market. They're cashed up and then they go and they got some change, but it sounds like you still had a, you, you expensive capital city market, you cashed up, you go to Byron Bay and it's environs and you've got no change. You know, it doesn't appear to be that there's any downsize of bargains to be had or expert X, you know, city ex-pat.

Michael Murray: It's always surprised me that people don't realize that for example, to one bar and Bay has a higher median price than Sydney does. So if you take the whole Shire as an average, it's probably just below Sidney's average. The last time I looked in, it depends who you quote, but you know, we have we've got a median average from the last time I looked, which would have been before Christmas, around a 1.5, 1.6, where Sydney was 1.3 and a half. So that's two one. So yes, there is not much change left. Yes. Left for people buying in. Also the market has changed. My, the majority of my clients up until recently were baby boomers and retirees people looking for a shift and that making a permanent shifted three to five years, but wanting to buy something sooner rather than wait for that time.

Michael Murray: So they're not priced out, but now the majority of my potential buyers are what I call hipster startups you know, 30, late thirties, early forties, young couples with a young family and a really mobile buyers. I've got an internet business or runs some kind of a business where they don't have to be there all the time or can commute. And that's another thing that people don't realize the sea change tree change activity is people are bringing their business bringing their activity here to the Shire and not really looking for a local chance of employment. You'd find here at any time non COVID, of course your cooling gather and ballad airports are just packed with commuters and not people just commuting to Sydney and Melbourne. The people commuting to LA or Singapore. I mean, I had tried for a while. He would be two weeks in Mullumbimby in two weeks in Singapore manly because his wife refused to live in Singapore and wanted to, you know, rural lifestyle. So

Chris Bates: Yeah. How about, how would the locals feeling about you know, when we have a prices rise and you're saying around a 35% rise, I mean, a market's carefully balanced on what the locals can afford, but now it's not what the locals can afford. It's what these, you know, there's cashed up KIPPsters and the downsizers can afford. So how the locals feeling about this big shift in property

Michael Murray: Assume cost off that it's quite intense and it has been for a while. So, you know, as you could imagine it's a very bulky community to start with. You know, there's a lot in that. We've got too many lawyers that off degree retirees here and they, all they know how to do is argue. So people are really up in arms at the moment, especially around Airbnb as well. Because everybody's looking around saying everybody, you know, because I think there's, there's such an engaged, active and vocal community, and that's really what makes it an attractive place to be. And that's what a lot of people want to move to experience and have. But the downside of all, what will the upside of that is that people are very engaged in how they feel the region and the community is is traveling.

Michael Murray: So they really feel, and I can understand it. And I share with that a bit, as well as the lover of the community, how this will wash out in a few years and what it looks like. So as I've experienced my clients over the 20 years, I've been doing it. Many of them become friends and associates. Now they're on my books for years and I ring me up parties after I'd done their deal and ask God, do you know, landscape or I'm renovating, boosting yourself. I'm always available to them. And I've always felt that I whoever they are, hips, the startups or retirees, baby boomers, they're going to merge, merge and, and, and mesh well with the community. Everybody wants more or less the same things to keep the environment intact, to go to farmer's market and do the yoga classes and live this kind of lifestyle that people are attracted to.

Michael Murray: But what's happening now is that there's a you know, clique of people who really not that that's not their real priority. We've, we've moved into a strife when we're now you know a destination and I property asset to be part of somebody's portfolio whereby when you go blue chip real estate that you know, some subject could spend $10 million on a rural property or a house that water goes and now never visited maybe once a year come for a few weeks. And so that's the threat that people are feeling that could be an outcome of this is even more of a distraction than Airbnb, which I don't think, you know, people say, how are we going to have affordable housing here together about affordable housing in Byron Bay? It's just, hasn't existed for years and it won't exist in the future unless there's real legislation and and political change with the incentives and how things live.

Michael Murray: So I can understand why a lot of locals are feeling concerned on both levels. So coming at it from the air BNB ankle, and they're also coming at it from property prices at that luxury level is just gone deserved. But you see, we're also having a lot of people now that have had investor houses who have been renting for years. They now read the media and they think, Oh, maybe this is a good time to cash in. So they're selling their house at ocean shores or Mullumbimby and cashing out thinking this is the top of the trend line. But then those rents that have been there for years are being asked to leave by the occupies of people who are moving in.

Chris Bates: It's a really interesting web price shift also changes your community, right, but people who could afford it 2 million can't afford it at that price anymore. And the people who have got 3 million might be a different demographic or different backgrounds and bar, and it's about the community just as

Michael Murray: They would stay, they would stay. But the trouble is sometimes it's not an option to stay because there's no way to live. There's nowhere to rent and there's no way to buy if you don't have the the purchase amount required. So what we're seeing is what we're seeing, people are being forced to move, and there's you know, we're seeing some people finding real hardships and there's people with jobs who are you know, work is they're sleeping in their car or crowd surfing. What's it called?

Veronica Morgan: Well, yeah, I mean, this is, this is something that's, it's, I guess it's magnified up there because of the volume or the value of properties in the first place. You know what I mean? So if they're increasing 35% on what we, like, you already said, the, the median price was higher than the median house price of the whole Sydney. And, and so that makes it particularly difficult, but then there's also, you've got a migration of people coming to the area, and I would imagine some people are wanting to rent when they get up there as well. And if they do have, or the able to work remotely, perhaps they've actually got higher disposable income to be able to pay higher rents. So I would imagine there's, there's quite a lot of pressure on the local population in terms of affordable housing, both rental and purchasing,

Michael Murray: Not just on the the people running restaurants and businesses, that's their major concern as well, because they're not getting stopped. I know a friend of mine's got six restaurants in Byron and he's at a loss because he can't, if he's got people who really willing to work, but they say, well, I can't because I'm having to commute from Lismore or more bar. It's like the city, it's like, it's a similar, what is happening in you know San Francisco and around areas that are, have high, high value employment. And how do you get you know, baristas and cleaners and staff to service this kind of plant. That's why we are the pushes on now. And that's, that's a dilemma for more than just the people finding it, difficult to find a dwelling.

Veronica Morgan: It's really ironic, isn't it? I mean, because this is sea change, tree change area. It's so beautiful up there. You know, we all, I think like you can't find anybody that doesn't love it up there. And yet they're taking all the big city problems, you know, it's just, it's a bit insane. Don't you think? I mean, this is where you meant to go chill out.

Michael Murray: Well, I think that's it, in a nutshell, lots of people want to chill out at the moment and lots of people

Veronica Morgan: There won't be chilling and those won't be chilling and they're taking all these problems. They're from the city now. There's, I think there's also a big thing there. You know, that the bar and areas had this big celebrity effect thing happening. Right. Do you think that that's got anything to do with it, or is it they also coming because just the, because of the overall demand, the know the well-known, the attraction of Byron Bay?

Michael Murray: Well, we've had a few pull factors working on that at the moment. Yes. There's that startup quality and Chris Hemsworth and the family kind of been leading that, you know, I've had a few celebrity clients and it's truly bizarre here cause I'd been packed with them as well, because we've got kind of spotters that are running around. And if they see somebody in a cafe, they ring up these pap Tapper at, and I follow you. And I've kind of been in a couple of situations where I've experienced it myself. And it is bizarre when you find that, you know, just the thing of going to the beach or sitting at a cafe, you become, you know, I really feel have much of an invasion that is for these people. But besides that the global destination of bar and bat, this is something that I'm trying to educate.

Michael Murray: I didn't Caltech with the community here is that the idea that we're going to go back to a nice surf town where everything is chill and easy is just ridiculous. What we have to do is how are we going to manage this permanent transition from a sleepy little village to our global destination? I mean, I will listen to, it was on grind North the other day. And Melissa McCarthy, see that's the other pool factor. We've had all these because Australia it's been successful with COVID, we've had bothered. And now it's been a destination because we've got so many professional media people cinematographers. And so we've had three or four at any one time major productions happening, which is another factor. You know, just the ones I worked on, one of the locations scout, which I do on the side as well. And people came to Mullumbimby and they took 50 houses in Mullumbimby, just for costume crew. And Melissa McCarthy was on grind Norton the other day. And she had to get nagged at night up to look her best for the international potluck car being on online. And I said to her, you look so great because she woke up early in the morning because of the time difference. And she was all night off, but I can't go out and bar and Bay looking like this, people here don't wear shoes.

Chris Bates: Yeah. You mean, you spoke really about two issues, one the Airbnb, which I think some rural changes may happen up there where it limits the nights she can sort of rent it out and things like that, which would be interesting to get your thoughts on, but there's also that person who's got their second or fourth or fifth home. And maybe it's in water goes, or maybe it's another part of Byron that just don't ever go there. Those, those are the two things that I guess the locals that potentially upset about the most, maybe also the cutting up of farms and you know, reducing the food bowl, I guess, are they the issues?

Michael Murray: Look, the issue really is an unknown. All of those you know, eh, they Airbnb, as I've said people are using Airbnb as a can to kick down the road. Is this, this is the answer. My thing is, look, even if we go to the 90 day limit, that's not going to bring in portable housing because even if something that's been run as an Airbnb, suddenly they don't run it. I only round up for 90 days that $2 million property or $5 million property, or what it goes is not going to go back into the affordable rental market. It's just, it's just absurd for people to think that there will be this transition. The other, the other question of people, I think that's, that's what I'm trying to signal as a warning in five years time, what's called, we're gonna have to introduce a vacancy tax, which some popular destinations do to try to offset.

Michael Murray: That's what I'm saying. So a lot of people that I'm talking to here, look, Airbnb is the problem we had 10 years ago. That's kind of manageable in a way, and it's not going to solve that problem. But one of the things that we can try to manage for the future is this asset based portfolio property. So people just park a $10 million home in, in what it goes and don't use it. You know, the problem in water goes to give you another example is that there's a string of eight houses in Brown or drive on what it goes with a good view, of course. And five of those eight houses are under reconstruction at the moment being pulled down million dollar match since they put that. So that's upsetting the whole area because how do you get five houses being renovated in a short strip, then the tradies and the trucks and the parks. It's like chaos.

Chris Bates: Yeah. I mean, building booms are happening everywhere though. I mean, there's, there was an article on the weekend about wanting to vote clues in Sydney and the whole street everyone's doing knockdown rebuilds and, you know, I guess construction upsets a lot of people, right. Especially in small towns that can't

Michael Murray: Yeah.

Veronica Morgan: Now in the hinterland though you know, and I'm harking back now to a couple of episodes we did with location, location, location, and, you know, for many, many years, property prices were very stagnant. You know, properties would sit on the market for a long time before they sold a lot of them selling under a replacement costs, you know, and you know, that was sort of off the back of the last boom. I guess people forget that in well, people always forget the downtimes in the, in the good times or in the, in the P the booms. And they always are so forget the booms when they're in the downtime. So that recency bias that we have, what, what, you know, I guess, what do you say to people about that? Because, you know, you've been there for 20, you'd been working in this space for 20 years, you would have seen that and you would have felt that pain that some people have had for long periods of time, not being able to sell or not been able to recruit whatever they paid in a boom. I imagine the peaks and troughs in this market are pretty, can be pretty steep.

Michael Murray: No, I disagree on two counts. There was a big downturn after the GFC at 22, 2008. And then there were a lot of pain for those people in the rural properties who had spent $2 million buying a few acres and then spending a million dollars building the luxury home thinking they were going to do a big flip and cash out. So the timing was really bad for them. And we saw probably a 40% pullback and there were properties that were hanging on the market for a long time now. And of course we could see another big downturn and then, you know, the, the world's a very fragile and, and auratic place to say the least. So whatever happened to the future, I do not know, but I think that what's changed since then, is this awareness and appreciation of Byron or of other somebody called it vanity fair, actually called it a unicorn destination?

Michael Murray: You know, it's a one-off. And I think it's going into that area now with the combination of the, the local beauty and the sense of community and the perfect weather and the great surf and the celebrities that are living here and moving here and I want to visit, and it I've seen much more moving into a, you know, like a Santa Barbara, other people have called it a tropical Monaco. You know, we've kind of moved out of this places where I think even, I think similarly, the Eastern suburbs of Sydney or some Southern SW suburbs in London, or, you know, upper West side, New York, which are always quarantined from master downturn to cause there will be a ups and downs and trend lines that sometimes go against you. That really why these big money that are doing this asset portfolio by. Cause I realized now that we, this is the bite and it is a long-term hold and it's security. And why wouldn't, I can understand the financial economics of it are what's happening because you can park a few million dollars in a, in a trust account or a a managed fund and get one or 2%. But if you park $5 million, you know, house in water goes, you don't have to do much for it. And then five or 10 years, you've probably made 50%,

Chris Bates: Right? What are some of the things I could really change Byron for the worst? I mean, could you know, I've seen some regional areas where you've got this beautiful sort of coastal lifestyle, you know, you know, a lot of heritage sort of character homes small communities. And then on the other side of the freeway there's house and land packages that are on 300 square meter blocks and they completely shifting the sort of livability of the suburb. And so do you think you could say a house on land package boom out there? Or could you say, you know, lots of these bigger hundred acre, 300 acre farms get caught up into single acre farms? I mean, that would add a lot of supply or, or apartments hitting the

Michael Murray: No, the only, the only see that's what we call the zoning is very strict. Now is agricultural protect. So farming land can't be cut up anymore the only way. And that's one of the things that's driving this increase in small acreage is, is that you is the community title is the only way to get a a small rural, I could sort of two or three acres where a hundred acres is able to be split up in a zoning. And and you can buy one of those, you know, they come up occasionally, but you buy into now for three acres on a community title, which means that you like body corporate, you still have a body corporate and you have community land, which you have to share a common, it's like a strata in the city is community title on land here, but you know, a good place has come some coming up now incurable and the buy-in is like 1.4, four vacant land, a minimum.

Veronica Morgan: Yeah, look, Suffolk park, Chris. I think that that idea that you've got you know, one side of the road is all house and land packages and the other side is sort of more established closer to the beach, more expensive. So that's one example of that, but so, and that's quite an old subdivision though. Now isn't it? Michael?

Michael Murray: Yes. Suffolk park, fire and Hilton. And I will chase. Yes. Yeah.

Veronica Morgan: So there's not much more of that happening, is that what you're saying?

Michael Murray: No, these the last there's only two there's West Byron to come and that's been very contentious and very fraught very protested against, and that will happen. And then there's the last two stages of a subdivision in Mullumbimby. And there's been, they were taking names for those, you know, you start it on a list and they were going to do a lottery, but now it'll go for auction. And those last two releases of what, probably 20, 30 houses or house slots per release, they will be the auction. I don't know what they're going to come in. They were selling before 400, they could sell for five 50, 600 for the vacant lot.

Michael Murray: Not this council. We've got a green council that's fairly progressive and they're trying to do their best to increase supply, but the nimbyism factor is very extreme here. And they they're realizing that a lot of people are realizing that yes, nimbyism stop anything from happening and stop another development from happening. Yes, that may protect to a certain extent, the amenity of a certain area or a suburb and it will increase house prices, but it's gonna certainly damage longterm the feeling of a community and where a lot of people have been having to move out where they can't, where their lifestyle can't be sustained. If they're a renter or they don't have the assets to buy in. So, you know, it's a off, it's a, it's a wicked problem.

Veronica Morgan: If you like, what you're hearing here, please share this episode with others, you feel would benefit. And while you're at it, why not leave us an iTunes review five stars, please. Every review helps make it easier for other people to find us and hear what our amazing guests have to say. We love hearing your questions and we're planning more listener Q and a episodes. Please send your questions in. You can send them via the website, which is the elephant in the room.com.edu or directly via email. Two questions@theelephantintheroom.com. Did I, you talking about these lifestyle blocks, you know, there's two and three acre blocks that are subdivided in a community title subdivision. And I remember when I was up there that way late last, and, you know, as I do, whenever I travel, I look at Wallace state and I noticed there's sort of a dead giveaway in the way that they're they're numbered.

Veronica Morgan: So it's like might be two of 365 Rosebank road or something. So so I thought that's what must be the case. And then you Maclean's ridges. The first time I ever went up there years ago, my friend lived on the edge of a dairy farm that her sister and her husband owned in this Queensland and mean pumped on the side of the Hill with the most incredible views. And then Maclean's, which has been subdivided in much the same way will this effectively large project homes on big blocks, you know, is how are those properties, you know, is there a big demand? I mean, there's a big demand from everything of course, but are they seen as sort of poor man's poor man's hinterland home? How, how do they perform? And yeah,

Michael Murray: Because I perform well, but there that that'll be great because what we're seeing now is that the client's bridge is just a barn, Sharyn and Lismore Shire. We're also seeing the same balanced show. And the better example than McLane street is Lennox head, which is just the border. So they've had a lot of land release in Lennox head and all of those blocks. It's still a few more, but they let released land for the next 20 years for that area of Dominic Shire. It is all gone soaking up from the demand from buyer. So you see ballon, a Shire council contribution have been mega just on the back of Barron's popularity, but basically they've shot them on their land releases have been all soaked up in the first three to five years.

Michael Murray: There's not less. I mean, there's a few more in Epic. The Atlantic's head now has had a big extent of urban development and a bar. And now I don't see any more Greenfield development except for West Byron. You know, we I, I can't see where they'll do it. It's not in any rural or urban settlement strategy with council. The main one that's in the fighting at the moment is for what's called a business and industrial land strategy where they're trying to get more small industrial land, because the demand for people running small businesses, especially around specialty projects, you know, there's a whole thing, you know, activated, not so whatever, you know, all this, because they're playing off the bar and brand as well. You know, all these specialty food stuffs want to get night in bar and bar and whatever waffles cookie, they have had some of these big businesses that have become successful lightbar and their cookies and stone and wood.

Michael Murray: They've had to build factories up at mall, all of that because they can't get the land to do it here at and shot. So at the moment, the demand for rural subdivision has kind of gone. And the fight now is for people who are wanting to see the, the population stay employed and active and not just the tourism destination is saying, you know, we need more industrial land release. So that's at the fall at the moment we see what's happened now, and it's been really popular. And so some of these business parks as well as for what's called home home office. So there's been a development here, which you should go and look at habitat. It's just gone now, you know, a lot of it's just got a couple of restaurants it's on, I think four and the demand for that.

Michael Murray: And it's true. You could, you can go there and you get a picture in the image of where bar and lifestyle as a destination is happening. Cause you get, you know, a clear example of what this hip's to start here to start ups and the young yummy mommy's doing yoga and that thing. And it's very cool and hip and happening. And I have to roll out more than more of that because that's where it's happening because you know, people are wanting to move from starry Hills or Carlton. They want to have that lifestyle. I want to be able to live and have the internet office downstairs and walk or bike ride to their coffee shop and the beach and interact with everybody at the gyms and buy the Kashmir shawls at the shop. And that's where it's going. How do you supply that?

Veronica Morgan: It is fascinating, isn't it? Because we are talking about, it's basically a metropolis, you know, it's got, got to have all the infrastructure, all the same things to support all the people that are coming into the area. And then that creates the demand, the problems, because of course, land, land, values, rise, et cetera, et cetera. It's, it's, it's interesting to watch this play out.

Chris Bates: One of the biggest things, there is the local utilities, right? Which we, you know, the roads, the sewerage, the electricity. I mean, when I was out in the barn, I was obviously doing a big thing around that new roundabout and the new bus Depot, et cetera. I mean, how are they all sort of handling, how's the sort of local infrastructure handling it or

Michael Murray: Yeah, it's a big topic as well. You know, the potholes is an ongoing debate because, you know unfortunately because of the weather here and we get it's subtropical, we get a lot of ride. So road to very much easily damaged by that, especially now, but also because we have two, nearly 2 million visitors every year when it's on state trip staff. So there's no way of capturing, you know, that as an income stream except the shops do, but there's no rates or council except for pay parking, which has been successful is trying to raise revenue to keep the infrastructure and tech. But what you're talking about with the bus shelter and the new, that's been a Byron Bay master plan, that's been in process for over five, seven or eight years now. And that's just coming to play coming into for now.

Michael Murray: And it's going to be great to what we're trying to do is get Johnson street into a walking street. Cause the only way to make someone like Byron be successful still as a tourist town is, is minimize car usage and get people to park and walk so that you get places like, you know, in, you know, European cities where you have the center of town, the Piazza is free of cars and people can, you know it out and go to coffee shops. And so that's, you know, it's going to be going to, which is good.

Veronica Morgan: Yeah. Because getting in and out of Barnes, a buddy nightmares, basically single lane roads, you know, you install roads, usually a carpark. And is it, is it broken head road going down South? You know, it's, long-held, I had friends moved up there, you know, in the wake of GFC. And that was something that they said was really unusual. They'd had not anticipated, you know, and that's, that's a long time ago now and I can only imagine it's getting worse. What is there you know, typically when people make a sea change or tree change, if they haven't really sort of thought it out and they've got this sort of you know, dreamy aspirations, but the reality of living in a regional area is quite different. There's a bit of a, U-turn it, it sounds to me though that that that may not necessarily be a feature of this area. You know, is there a sort of proportion people, will they get there realize the amount of mistake and then get the hell out of there?

Michael Murray: No less than you would think. I used to get a lot of people coming from the city or even from Europe or somewhere, and their dream was to have an egregious, but now I filter them out. I'm very blunt with people. Don't do this. You don't know what you're doing now, but you've got to understand that people they don't understand what the nature is like, you it's like a wild, just constant maintenance. And if somebody has got five acres and they don't know what they're doing, my job as a buyer's agent is to warn them. You don't know what you're doing, please don't do this, but that's less now, but you'd be surprised because no matter with all its difficulties, it's still incredibly successful and fantastic place to live, mainly because of the mix of people. And what you're saying is people do treat, turn into a sea change, but we still, and let's try and keep it that way.

Michael Murray: We still have the best of a rural life and the best of the city life, because when you got the beach and the Bush and walks, and you're able to really have an enjoyable lifestyle, and at the same time, you've still got the culture and the restaurants and things to do and activities and people to meet that are always interesting, vibrant. That's a winning formula. So that's still intact. And I don't see that changing anytime soon. So no, we don't have that many people traveling in the towel. We mainly have people throwing in the towel because they can't afford to live here anymore. And they can't they've overextended themselves or they can't keep up the rent or the deciding to go somewhere cheaper, like McClain or Kempsey or whatever, or somewhere inland like Cayogle or Drake. And that's, that's the only thing. So it's people, but you know, I've seen it over the years and I've seen so many transitions of people that ki that, that kind of caught it for whatever reason and new people come and replace it. And I've never felt that it's going to be anything of concern because it's still keeps evolving and growing and changing and still being interesting. But as I said, this is a dilemma, this one where we're seeing a completely different class of people wanting a piece of it. And I don't know how much that is going to affect it. Maybe detrimentally, I don't know.

Chris Bates: Well, the main two classes that sort of hipster tech business, right. Or someone who's running an internet business that or can commute via, I mean the gold coast airport is literally 20, 30 minutes away. And that's an amazing airport to go wherever you want Singapore. And then you go to the rest of the world. But I mean, it depends on where you live on the North side. I mean, yeah, if you live in the hinterland, I mean, it's probably maybe 30, 40 minutes, I guess. I mean, what are they doing for schooling though? Cause you know, they are in that sort of forties, right? They might have young kids, the kids at schooling age. I mean, what are the schooling options like in barn? Is that becoming a bit of an issue as well because they weren't anticipating this demand for schooling.

Michael Murray: Yeah. In short there's two styles of schools. I have a waiting list very long. This is what I've been talking to. People that are saying, no, Airbnb is killing the town. I said, just go down and look at all the schools that building classrooms as fast as they can get glad to build them mom. So it is an issue but there's a lot of schools, you know, some people do a big to kid to doing a big commute because as good private schools in Lennox to Dave, yeah. There's a couple, a Woodlawn and Trinity and Lismore there's TFS, the South Southport school, if you want to go to the gold coast and there's a couple of other Linda's farm and Northern bow, also an alternative to up-market school. So I I'm, I'm pretty sure they're booming because there's nothing more important to a hipster startup couple than how to educate their kids.

Chris Bates: But then if there's massive waiting list, she can't move there. Right. So you can't say the kids are just going to miss school for six years. So you know, and that's, I guess one of the things that are, you know, maybe potentially just going to slow it down, if you can't move their kids into school.

Michael Murray: Yeah. Maybe it hasn't happened yet. I haven't seen, you know, what's conversation. I have, luckily, you know, my wife is a ex teacher. She's now a consultant, but she's been a teacher she would have started. And it's a big you know, we had an issue for a while. I had to stop. Cause you know, what would happen is that a public private primary school would suddenly become trendy with a good teacher or good headmaster. And then everybody would commute the kids that school, whether it's Cooper, bell school with the rumble going and Gary, all these schools, a little two or three class primary schools. And then suddenly everybody would hear through the coffee shop that, Oh, this is a really great school and everybody would move there. So now it's it's zones. You can't move your kid. You know, it was bizarre. They stopped it suddenly Val school, which is a three class school would have a hundred applicants for the next year because suddenly it became nine at the hip school.

Chris Bates: This is just taking all the inner city Sydney problems to the country before we get to the Dumbo, because hopefully you've got, it sounds like you've probably got plenty of Dumbo examples, but what's happened with the loss of,

Michael Murray: Well, I can't download on that too. It's a very complicated story. Very quick telegram thing. The, we deep green council, 15 years ago implemented what's called planned retreat for everything along the coastline. There's coastline protection, which is very understandable, which is if if your high tide comes from with 10 meters of your laundry or whatever it is home, you have to denounce it and move it. It, unless it was built before the mid 1980s. So, and also that ocean out there is a national park, the national park, you can't kind of promote peace there or anything, but the combination of that has made it another super phony issue on what to do with the date. But basically what's happening now with Clark beach has got to do more, not so much with climate change or erosion. It's got to do with the lamina that's happening now, where the current is keeping the sand being pushed up.

Michael Murray: And if you go to, or, or Tweed heads, you'll see huge beaches. So what's been happening is that I asked her and it's supposed to be turning the corner at K bar and coming into blond. Joel is being diverted from us by the current and is landing up North for the, so our view is why can't we do what they do at green mountain, the gold coast, and bring in one of those boats that kind of can push the sand from out at the beach and push it back onto the beach. That's what some people that are doing that have businesses along. And that's what we should do, but we have the dilemma that it's a national park and that needs special dispensation. And how old are the dogs that have that happen? That's a temporary issue. That beach will come back. But yes, your ocean problem long-term is an issue.

Chris Bates: I mean, what are some of the big mistakes that the new buyers to the area making? You said they're overpaying because they're cashed up, but, and what are some of the, you know, like what the locals know? Yeah. You wouldn't want to live in that pocket because of this reason, or you wouldn't wanna live on that road because of these reasons, what are some of the new people doing the big mistakes?

Michael Murray: Yeah. Well there's little ones, you know, I've always have clients, you know, like for example, the two that come to mind is Coopers, Coopers, shoot Ridge. The wind winter is so massive. You know, all of your veranda furniture gets to the North side of the rider. So careful with something like that. And there's also an exclusive, really sought after area of Friday Harbor road, which is beautiful. But because the topography of that area is if you're on the West side of Friday Harbor road, you've got the double whammy of the West sun and no northeasterly breeze. So I've had people move in now, people that have moved in there and then summer's so incredibly hot and wanting to go air conditioning, just a lack. It doesn't solve it. So they've had to sell. So there's a lot of little nuanced issues. Yes. Which is my long, long period here. And also me building and selling and buying over the many years that I've been here. I've learned about these little nuances of which there are many,

Chris Bates: I imagine there's lots of areas that flood habitually and roads washed, washing away, things like that. You know, there's tricks like that. I imagine

Michael Murray: They can do. And Gary, your, you know, you can get locked in for days at a time that's very very common and very standard, but this is not going to be you know, what, where this is going to be national soon already where I'm getting stories of people that can insure their property. That's happened in Lismore for a few years. So that's going to be the kind of standout thing generally for property. That's going to be an issue. That's going to hit people to bring awareness of climate change to therefore immediately that if you're in a fire or flood zoning, you know, and your insurance policy suddenly says, Oh, your insurance is going to go up from two grand a year to five grand. You're certainly going to wake up and start to take notice.

Chris Bates: So have you got a property Dumbo for us, Michael?

Michael Murray: I, I didn't pre precinct this, but just things that come to mind. Of course, Byron Bay, you've just got to read the back pages of our local paper echo and, you know, you've got the crystal healing and the chocolate valid thing. And so I occasionally get some really interesting, not that I'm not, you know, all of that ilk myself, I'm an old scopy of course. And as an aside, snag tend to tend to the new age guy. So I'm not kind of those two, did you get totally bizarre requests around lay lines or, you know, aspect or water was a big one for a while? Not so much because of people wanting to be a, you know, a survivalist and go Bush, but people are very, I was always surprised, not so much now, but you know, 10 years ago, I get people all.

Michael Murray: Is there fresh water? Can I have a dam? Can I put in a ball? How can I get water? Is there a Creek running water through it? That was always an issue that I thought was interesting for people have this concept that, Oh, if things got past shaped, as long as I've got water and I can grow stuff. So there's all, there's always that, but you know, I get you know, people buying a property for you know, really sensitive things around you know, the they're moving here. So of course you've got the things about pesticides with banana plantations or macadamia trees nearby. So I kind of know when I've got a client who has a sensitivity around living a kind of a organic lifestyle I know how to deal with that. So that's not so much a Dumbo client. It's not so much funny, but it's kind of, I think it's peculiar to the bar and region where you have people have a particular sensibility around some of these issues, new age issues,

Chris Bates: The dunes, the dunes day out sort of person that, you know, one also wants to get their piece of land, but in case the world does go to whatever.

Michael Murray: Well, we still get people that want to bet each way. They still want to live. You know, things go a little bit hairy. They want to know that they've got things covered.

Chris Bates: Plus the bunker and six months of food sort of stored away.

Veronica Morgan: Oh, just as one of the episodes that we did in the show, I had a a vegan who wanted to buy a place for BNB. And she is funny. We were looking and she had some, she was wearing vegan boots and we were traipsing around Mullumbimby and places like that. And her daughter was wearing thongs, right. But the daughter didn't get a leach. The mum got a leach and, and I'd only just discovered how to get rid of leeches. And and, but I didn't know enough about vegans. And so she gets the leeches at the end of the day filming. And I went on, I had to do to do with that are running inside. And I grabbed a thing of salt from the kitchen literally before she had a chance to do anything better. I just poured the salt onto the leech on her leg. And she starts freaking out because, you know, because I've killed the leech and I'm, and I'm like, but that thing we'll get to with the size of a rat. If you leave it on there, you know, it's the late show you, she was very, very upset with me. And the agent took me aside and said, Oh man, I had some people that really worry about walking on anywhere because they're worried they're going to squash an ad. That's the type of buyer you need to deal with. Very, very sensitive.

Michael Murray: The funny topical story similar now is in the upstairs. There's two offices upstairs in Mullumbimby. And one is a counselor dealing with respiratory people in one office. And you have a vestibule where shared, and then the office is in the other office is just across the road from them is the anti-vaxxer office. So there's a kind of a war going on in this whole way where the people who had respiratory counseling have to have the, the you know, the, the hand cleansing and the COVID and the mask and across the room, you know, you have a microcosm of the wall that's going on right here,

Chris Bates: Just practically on that, as well as the technology side is that know, you said the hipster startup is running an internet business needs good internet. Right. So how is that sort of, I know there's been a lot of backlash around 5g and yeah, we don't want that. I mean, what's the the internet, like just generally across the city, is it still very patchy and problem with that?

Michael Murray: Yeah. There's still blackout areas, but you see somewhere like the habitat, they've got fiber optic, tele tele with some of the new subdivisions and some of the new developments have fiber optics, but also you're able to get you know, the it's not 5g if the the NBN towers pretty good, you know, I'm on a Mac accessing one of the cold fixed slide tower. So I have a little satellite on my roof, which goes to the NBN tower and I get like 25 gigabytes download and five up. So I'm fine. And sometimes you can double that, but there's people who've got their own technology. I mean, there's a guy in the industrialist stated Byron, who does CGI graphics for Hollywood studios and digitally transported through his own system, back to his Hollywood studio all the time. So he's transported. So there's technology that can mix and match everybody's situation.

Chris Bates: Yeah. So you might not be able to get great to stand at its net, but if you can put a satellite on your house and you're willing to pay for it, then it should be solved. So

Michael Murray: Yeah, the, the, yes, you can manage it. And the poor on the, the, the conspiracy theories that unload download unfortunately, or download the latest conspiracy theory on 5g, they have to go to the critical, powerful to realign their chakra is after that.

Chris Bates: Oh, well, and on that note, thank you very much, Michael. Very interesting. Yeah. Very interesting conversation. And I look at it's a very unique market up there, obviously in a very unique place. And, and obviously what you're talking about, there is some of the nuances of local knowledge that really do assist anybody when they're buying in such an area. So thank you. We really appreciate your time and your insights.

Michael Murray: That was great. Fun. Thanks for the conversation. And Byron is going to stay beautiful and wonderful for the years to come. Let's hope, but I think it will. And everyone's welcome.

Chris Bates: I appreciate it. Thanks for your time. Bye-Bye we want to make you a better elephant rider and this week's elephant rider bootcamp. So I think that insurance thing is not something we've really seen as problem where a client's bought a house and they can't get any building insurance. They might have to pay a bit more money than they'd like to for it because they're in a bushfire zone or flooding zone, et cetera, but ultimately there's an insurer willing to do it, but do we get to a world where they're just not willing go to any area, no insurance willing to insure in those areas and can you not get insurance? And if you can't get insurance, then you basically going to have to, you know, protect the bank some way. And how do you protect the bank if the hassles, so you might not be able to get a loan, basically. If you haven't got enough capital or some other security to protect the, the bank in case the house burns down or is flooded, et cetera. So insurance is, I mean, that is definitely going to build in certain pockets around Australia, where insurers are willing to, to go. And people may not be able to buy houses there because they can't get insurance.

Veronica Morgan: So on the flip side of that, they can get insurance, but it's so ridiculously expensive. They won't insure their property. So you know, there was a re in the recent floods up in Tyree, there was a newspaper story about a guy that's, you know, scraped together a deposit for his first home. He's bought his first time. And then the insurance bill was $13,000 cause it's in a flood zone. And so we didn't insure the property. So he's only recently taken, bought the property. I don't know how he's got got around this with his bank by not insuring it, but you know, that was actually avoidable because he, in his due diligence prior to purchasing that property, you can find out whether the property is in a flood zone or not now, unfortunately, and look in new South Wales, there is a document in the contract, which used to be called the one for nine.

Veronica Morgan: Now I think it's a section 10 C or something, which basically, you know, it will flag if you're in a bushfire zone or a flood zone, and you can go to local councils, there's all these maps, you know, and a lot of this information is available online as well. It's not actually hard to find and you go and find out, you know, the sorts of things that might impact your ability to insure that property or that will increase the cost of your insurance premium. And so that, that to my view is very, very, very, very avoidable. This information is freely available yet. Most people don't even think to look for it now. And in new South closet is an essential document in your contract, the zoning certificate or the one for nine or 10 C or whatever it is they're in, in in Victoria, there's a section 32 what I call it forgotten the word disclosure that a vendor has to put together.

Veronica Morgan: So there's all these documents that go in that and a zoning certificate is part of that. In Queensland, there's no requirement at all for vendors to disclose this stuff, right? So, but up to you as the buyer, you know, and if, if you're dealing with a buyer's agent, then are checking this stuff out for you, then you should be getting this stuff checked. You need to look at that. You need to get your solicitor looking at it, or someone looking at the zoning and, and what the risks are. Because if you get stuck, you know, is a very expensive lesson.

Chris Bates: Yeah. I mean, absolutely. You should be doing your quote, lucky. You're going to go and buy a, you know, of AI, twin turbo car. And you've kinda got a bad driver history. You want to go and check with, you can get insurance on that car before you actually sign up. So I think, you know, we could find, you know, some areas of Australia where, you know, you should be getting your insurance quite done before you make an offer because you go, well, it's going to cost me five grand a year. That's a lot of cash that is eating into your capital growth, or it might not be any capital growth because of insurance. So I also think we could see a green slip sort of solution where the banks don't check your insurance on an ongoing basis. You provide a certificate of currency, but they don't hold you to it.

Chris Bates: You could actually cancel your insurance a week after getting your plan. The bank wouldn't know there's no like interconnectedness between insurers and banks, but you know, in a digital world, that's pretty easy, right? So, you know, a mortgage provider could say, it's coming out to your anniversary. Can you please do send us your new certificate of currency? And every year the bank is checking and you know, if I was a bank and I want to manage my risk, there'd be certain pockets of Australia where I wouldn't care about. But there'd be certain pockets where I would say, look, if a flood does happen, we could have big losses. So we definitely need to check these areas. So I think things like this, again, it changes obviously the climate change story continues.

Veronica Morgan: I think too, that we do have short term memories. I was talking to Megan Wells recently. We were doing a podcast on your first home buyer guide and can't remember exactly which episode, but we were talking about this type of thing and flooding, and, and she was saying that, that up there, because you know, the market's hot in Brisbane as it is everywhere else that people are now buying flood affected properties. And there's a very little price difference if any, between the flood effect to property and the ones that aren't flood effected. And so the reality is that if people can't remember to what is it eight years ago or so when the last lot of floods came through in the devastation, and now in the sort of the blindness of FOMO, they're now not actually paying a discount for those properties, but they will, it'll, you know, bottom of the bottom at some point,

Chris Bates: Oh, it's the floods that we just had in Sydney. And and I just, the last couple of months, if that was in Brisbane, that would have flooded Brisbane, the amount of water that came down you know, it's just was a bit further South than it probably could have been. And Brisbane would have flooded again. So yeah, that's, I mean, that's a sign of a hot market. You were saying that Navarone occurring in Sydney, people in Melbourne be seen the same thing where the seas days, the busy roads, people are desperate. Investors are more likely to off load those properties as well. They're more likely to be a bigger saturation of those properties and less of quality assets. So people are probably paying big prices for the poor properties as well as paying massively overs for the good stuff. So it's a hard market.

Veronica Morgan: It's a very hard market. They're taking risks. They would not take normally. And so I'll give you a good example, and that might be a property that where renovation was done, you know, maybe say five, seven years ago, and there are no there's no occupation certificate or burdens building certificate. And so in a slow market, that is a very thing that will stuff that sail up solicitor would ask for it that were met a get it, the buyer go, Oh, I don't know. I'm not sure about that. The council go, nah, that's not approved. You know, all this stuff will be very, very negative and that would really make that property difficult to sell now in this market. And we've had this happen recently where we've discovered parking that was not approved. Council's very clear. It's in writing, not approved. We go to council to find out what, what, what would be required to become approved.

Veronica Morgan: And it's like, there was conditions provided 10 years ago. And of course, no, we're not guaranteeing that those conditions would apply. Now you need to lodge a da in order to find out whether or not parking is going to be approved. Right. And so you go, okay, well, I'm buying a property in Balmain and it's got to all intents and purposes parking. But if I find that it doesn't have parking, it's suddenly devalued quite significantly. And we knew that because of our due diligence, but I can guarantee other buyers would have known that I even went back to the agent and I said, do you know what? You should not be advertising. This property is having parking. Now the vendor solicitor comes back and says, Oh no, statute of limitations, you know, councils, you know, they've, it's tough to you as time has gone past council, can't make these people remove the parking.

Veronica Morgan: And I'm like, yeah, but it could make the next owners remove the parking. There's no PR no protection there for a buyer of that property. Now, unfortunately, and sometimes, you know, I get a bit ranty on this because I feel in some ways, like my clients have been disadvantaged, my client knows that my client could have afforded to buy this property could have paid more than the highest than an ultimately sold for and was prepared to, until we found out that there were parking was a bit dodgy. Right. And the thing is, and maybe it's all right, maybe it's fine, but what if it isn't, you know, what if it isn't. And so we've got to buy that property thinking what if it isn't and we've got to price it according to what if it isn't client may still decide to go, I don't care and that's fine. At least they got their eyes wide open, but mostly other buyers, I guarantee you buying that property. Wouldn't have asked the questions that we asked and wouldn't know what we knew.

Chris Bates: I mean, yes. Similar story, clumps blowing something up on central coast just recently. And none of the renovations that they'd approved, there's just massive structural renovations. And you know, they did a bit of digging. Luckily they were doing their due diligence and I was really on them you know, friends of the family. And I said, no, we're not going to go for this property. And it went for a massive price at auction. And so the person who bought that just obviously didn't care or didn't do the due diligence. And so these things are happening. And you know, the frustrating thing is, is that there's very limited alternatives right now, the goods you go, well, I'm not going to buy that stuff. It's compromised because, you know, for some reason it's not a quality asset, and then you try to buy the good stuff and, you know, good luck because, you know, there's always someone willing to pay a huge at the moment is desperate. We've had very few success with people buying we've had more pre-approvals than ever because it's so hard to just to buy whatever at the moment, because there's someone who's a bit more desperate than you.

Veronica Morgan: And, you know, I'm more than happy for my clients to go, right? Hell for leather, go, you're going to have to pay a premium when you buy, you're going to have to, but, but we got a minimize that risk because there is risk with property. If you've been around long enough, you know, it and you know, so actually a bit surprised at Michael's saying, Oh, you know, I don't ever see that going down again. You know, after the JFC, you know, there were honestly, we were looking at properties, as I said, and we weren't looking back. That was back, it's sort of in the million dollar price bracket. I mean, I, to 1.2, that sort of range, you know, there were properties that were struggling at that price bracket, you know, and they, the ones that did sell, sold for big, big discounts. And that can happen again. You know, I think that we forget, and it might be a world-class yesterday. It was world-class then too, you know, so these are always risks. And so you've got to buy a Cracker, you buy a good one and someone wanted, you buys a dog, you buy this, you know, the one with on the Western side with the, you know, the terrible heat. Yes. You might get it now and say, I don't care anymore. But you know, when the market slows down, you will care.

Chris Bates: Oh, and I think you might not have to worry. It's always about losing money in the price of the property falling. Some of the risks is the property process doesn't do anything. And I think the risk at the moment is people are going in there with a, after a boom and say 35%. And that sometimes on the poor stuff, just as much as the good stuff, and you're going to buy a poor asset, that's paying, let's say 40 or 50% over what it was worth a couple of years ago, because you bought under hot conditions. That property might not do anything for 10 years. You know, you've already basically paid for all your growth. That's the problem with buying in these areas? After big price rises is that you know, 2020 was a unique year and maybe 2030 that the property price is the same. So just be super careful that buying into hot markets. Yeah.