The month in review: Newcastle
By Herron Todd White
July, 2010
This time last year we looked at the places where those
with or access to $500,000 should be looking to purchase
residential property in the Newcastle Region. Statistically,
our records indicate there has been a 10% overall increase
in values.
We reviewed five locations around the area and will look
at these again after 12 months.
The Hill, Cooks Hill, The Junction and Merewether
These suburbs are close to the city, within walking
distance to shops, restaurants and beaches. The standard
of real estate is considered to be generally good to high.
Most dwellings are older style (but numerous have been
renovated) and units are small but modern.
The past twelve months have seen a period of
consolidation in these areas with steady sale volumes and
little growth. $500,000 would secure a good standard of
dwelling with an expect rental return between 4.5% and
5%.
Hamilton South, Adamstown and New Lambton
Often described as being on the fringe of the inner city
suburbs and accordingly, they are well positioned (10 to
15 minutes drive from Westfield Kotara and Charlestown
Square, the CBD and surf beaches). The standard of
development is variable, so a keen eye is necessary when
looking to buy. The market slow down saw reduced sale
volumes in these localities and they have remained this
way over the past twelve months. On the other hand,
rental returns remain stable and investors can expect
returns of around 4.5% to 5%.
Carrington
This has remained an affordable inner city suburb which
essentially fronts the Newcastle Harbour area. The area
has traditionally been an area dotted with workers
cottages associated with the industrial uses, but it has
been somewhat gentrified over more recent years.
The first home buyer’s bonus scheme increased demand
during 2009 and values have firmed accordingly. Rental
returns have firmed to around the 5% mark.
Stockton
A somewhat unique suburb bounded by Newcastle
Harbour and surf beaches. It is a 20 minute drive from
the city centre.
This area is considered to have been a slightly volatile
market over the years. The market has slowed more
recently with values softening over the past 12 months.
This however has led to increased returns as rents
continue to firm. Rental returns are noted to be generally
around 5% plus for this area.
Charlestown
This is a locality which has seen a major level of
redevelopment in recent years. A modern (renovated)
house can be found for around $500,000 and returns
are estimated to be around 5%. Due to the level of
development in the area, we do not anticipate any growth
in values for some time. A concern we have with this area
is the emerging proliferation of new units with slow take
up rates.
Our thoughts on where to invest $500,000 would be in
the inner city or fringe areas of Newcastle. But that said,
an investor or home occupier would also be well advised
to look seriously at Cameron Park, where a modern home
with four bedrooms, two-car garage on a 600sqm-plus
parcel can be found within this budget. Expect a return
of at least 5% in this.
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