Newcastle April 2017

The month in review: Newcastle

By Herron Todd White
April 2017

The Newcastle market is the strongest it has been in quite a while. There is an argument to be made that the market has never been stronger – the number of coconut lattes being consumed in Newcastle by real estate types is an overwhelming tidal wave in its favour.

Recently there has been plenty of media attention repeating the mantra that Newcastle is an up-and-coming Sydney, with less population, less gridlock and lower property prices. Agents are fielding plenty of enquiries from out-of-town buyers and they can definitely compete favourably with the locals at auctions; when you sell your property at Sydney prices, its gives you plenty of dollars to spend at Newcastle prices.

Take for example Mayfield East: houses in this suburb have smashed through the $500,000 barrier and powered up to join neighbouring suburbs in the $600,000 to $700,000 range. This is at a level beyond imagination a few years ago for the once-humble home suburb of former BHP workers. Gentrification of these areas is like a rampaging juggernaut, which keeps Bunnings in business and cafes buying as much coconut milk as they can get their callus free organic hands on.

So what’s driving this real estate frothiness? Media hype has already been mentioned and it is a massive factor, but supply and demand is where it’s really at. With dozens of buyers lining up to inspect houses at open days, it’s open season for agents – like shooting fish in a barrel. For the most part, auction strategy is giving way to a feeding frenzy, with suburb records occurring on what seems like a weekly basis.

Even if you are fortunate enough to make a bucket load of cash in the current market when you sell your house, how do you secure a new abode for yourself? The typical house-hunting Novocastrian is tearing their hair out in frustration. What are the options? Stay put and wait for the market to plateau, which we have been waiting almost 18 months for, OR extend and renovate your current house. It’s no surprise that tradies are in hot demand with waiting lists the norm. Some are developing a taste for coconut lattes, it appears.

Let’s not forget the unit market. If you bought a speculative unit off the plan in and around Honeysuckle back in 2015, then chances are you have already made money. The kicker is that the units are only just being handed over as we write this. It doesn’t always work out this way with units; it’s just that point in the market where it has. Given the number of new units commencing construction, it remains to be seen whether the next batch of off-the-plan speculators fare as well.

 

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