State of the Newcastle Property Market

There is no denying that the Newcastle property market is heating up. With increasing pressures for first homebuyers to just ‘get on the ladder’, and with the seemingly impossible feat of cracking the Sydney market, both investors and owner-occupiers from around the state are seeking property in the next best place.

Newcastle, being the second largest city in NSW and the seventh largest in the country[1], has a lot to offer in terms of property potential. Newcastle offers a plethora of beaches, accessible from both the city and suburbs, and with the recent emergence of the café, culinary and craft brewing culture, Newcastle’s liveability has increased exponentially over the past 10 years, as the city continues to transition from its industrial past.

The city’s growing popularity with buyers, both owner occupiers and investors, is having a very tangible impact on the property market.

In the last 12 months, the Newcastle Local Government Area (LGA) has seen close to 3 billion dollars of residential property transact with areas including Mayfield, Merewether and New Lambton experiencing some of the areas highest number of sales for the city region.

It’s good news for Newcastle property owners with local housing sale prices growing strongly.

Data indicates that median house prices over the last 5 years have increased strongly, with the suburbs of Mayfield, Georgetown, New Lambton, and Merewether experiencing a 5-yearly median sale growth in the order of 45%, 42%, 50% and 52% respectively (RPData 2017).

While apartments are a relatively new product for some of these previously industrialised suburbs, median unit sale prices have increased circa 20-30% in the same period (RPData 2017).

It’s not so great news, however, for those first homebuyers trying to break into the Newcastle property ladder. Not only are property prices steadily moving upwards, but the housing stock is in high demand and the competition is hot.

Take auction clearance rates as an example. Clearance rates in Newcastle over the last 12 months have peaked at levels pushing over 90% (Pricefinder 2017), particularly in the trending suburbs of Merewether and Mayfield. By way of comparison, this eclipses, the published clearance rates this week for Sydney at a very respectable 70%. (Domain 2017)

So where do things go from here? When can buyers expect to gain access to an ‘affordable’ Newcastle again?

Indicators show that the recent excitement in the Newcastle market, particularly for the inner-city suburbs, is likely to continue across the medium and long term. While Newcastle is of course subject to the same macro-economic forces which could see a short term slowing of growth across the NSW market at some point in the future, if the previous global history of industrial city revitalisation is anything to go by, Newcastle only has bigger things in its future. The recent release of Economist Greg Clarks’s study into Metro Planning Insights for Greater Newcastle, supports this view.

The continued revitalisation of Newcastle CBD, the development of inner-city University of Newcastle campus ‘NeW Space’, the proposed light rail system and even special events such as the Supercars Championship races are acting to draw regional and global attention to Newcastle, making it an ever increasing competitive and attractive city.  This city-wide momentum will continue to be a key driver of the local property market.

For more information on the Newcastle’s Metropolitan Strategic Plan visit: http://www.planning.nsw.gov.au/Plans-for-your-area/Greater-Newcastle-metropolitan-planning

Or if you want to learn more from one of EPS’s property or planning consultants contact us at reception@enviroproperty.com.au

[1] (according to 2015 ABS population data)