The month in review: Newcastle
By Herron Todd White
In a society consumed by a 24 hour media cycle which is addicted to hyperbole, the residential property market is increasingly influenced by external market indicators, both good and bad.
As Australia enters 2016, the big economic news continues to be China’s economic position and its potential to impact global financial markets which are still vulnerable following the 2008 Global Financial Crisis.
Closer to home we have seen recent Sydney property market prices entering a cooling phase, while anecdotal sales evidence shows this sentiment is now creeping into parts of the Newcastle and Hunter Valley property markets. However on the flip side, some in the media have highlighted positive forecasts in 2016 for the Newcastle property market and some are tipping growth rates to exceed Sydney’s.
Strength in the local market will remain property located within a five kilometre radius of the Newcastle CBD where economic risks are spread and demand for blue chip property remains high. Property within close proximity of the University of Newcastle remains in high demand and this is tipped to continue.
Residential property in popular holiday destinations such as Nelson Bay will remain in high demand, however it’s important to remember large external financial events can impact discretionary spending in different ways. Some people may be encouraged to holiday and spend their money locally which benefits local economies, while some people may refrain from holidaying at all until economic conditions improve.
Since 2014, the mining and resource industry downturn has seen parts of the Hunter Valley property market exposed to job losses and reductions in rental rates and in many cases houses have been discounted in order to achieve a sale. Sadly, housing market prospects in the towns dependant on the mining industry do not look like improving in the short to medium term.
Williamtown’s contamination issue continues to dominate media headlines and unfortunately for many living within the identified contamination zone, 2016 remains a year in question and we are all hoping for a positive outcome here.
2016 will remain a year of cautious optimism. It’s important to remember that property markets are cyclical and solid research is imperative. Property prices are impacted by internal and external forces and unlike the equities and capital markets, the impacts generally lag behind.