By Herron Todd White
What a year it has been! Beginning with fires, followed by a swift move into lockdown and then wrapping up the year with a local real estate market that has seen very strong growth, 2020 will be one to remember.
Back in our February 2020 edition, we predicted that this year would bring a number of events all converging in a strong market with record sales predicted. In essence…we nailed it! However the journey there was not what we expected. The COVID-19 pandemic sent the whole Australian economy into a spin, with a huge level of uncertainty across all markets. Businesses were closing and people all over Australia were losing their jobs within the space of weeks.
The start of 2020 was hopeful that the Newcastle market would continue on from the rise seen at the end of 2019, with a number of record sales closing out the year. 2020 started with optimism until COVID-19 hit the country in March. With the pandemic creating so much unprecedented uncertainty, the volume of properties for sale shrunk to the lowest levels seen in the last 30 plus years. Agents around the region reported that the number of property listings had dropped up to 80 per cent compared to the same time last year.
The Newcastle and Hunter property market stalled and plateaued early in the year with minimal activity. While many believed this was to be the new normal for 2020, we were all proved wrong as the Newcastle market began to rally and take off. Agents reported a large number of buyers with limited product resulting in many properties selling above guides, where only months ago the buyers were nowhere to be seen. This has led to the market continuing to surge upwards with a number of suburb records continuing to be set as the year progresses.
The Newcastle prestige market performed well across the whole year with properties in the range often being snapped up within a matter of days of being listed. 38 John Parade, Mereweather set a new record for Newcastle with a sale price of $7.25 million after a total of two days on the market! We also saw a new record set for Lake Macquarie with 7 Foreshore Street, Eraring selling for $6 million. While not as impressive as the previous numbers, 19 Kirkdale Drive, Kotara South just set the new suburb record at $1.185 million, a whopping $540,000 above the current suburb median (source: Corelogic). With new records being set at what feels like weekly intervals, 2020 has been a top notch year for the Newcastle market
Now it isn’t all about the multi-million dollar homes, with the $500,000 to $1 million price bracket also performing exceptionally well. Many properties within this range sold well over expectations with a number of auctions bringing ten to 30 per cent higher than guide. 17 Hawkins Street, New Lambton went to auction on 7 November with a guide of $625,000 and sold under the hammer at $775,000 after 30 days on market. Agents have reported that it isn’t just the locals keen on the market, with plenty of buyer enquiries from Sydney and as far as Melbourne as working from home becomes the norm.
Investors remained slightly more subdued for slightly longer, however are now out in full swing as they look to take advantage of the strong rental market, with many rentals being tenanted off market or within one week of properties hitting the market.The Newcastle and Hunter property market has shown amazing resilience over the past 12 months and its response to the COVID pandemic was unexpected. This performance shows that Newcastle is a strong, long term market with plenty of potential for both owner-occupiers and investors. Fingers crossed that 2021 brings a similar market performance, without the lockdown or drama preferably.
Tom Mc Douall
Certified Practising Valuer Valuation Manager
Speak with a Newcastle Mortgage Broker today.
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