The month in review: Newcastle
By Herron Todd White
June 2016
The property market in most parts of the region still remains strong and active.
The recent RBA interest rate cut to 1.75% will ease pressure on mortgagees, especially for first home buyers, however reports of tighter lending practices which includes lowering EMV thresholds on new loan applications may off set the benefits of this rate cut for some.
Many areas of the region have experienced positive growth over the past 12 months. Interestingly the median house price in Newcastle’s LGA remains stable from 12 months ago at around $557,250 (April 2016). While unit median prices have increased to $487,500 (April 2016) as new, high quality unit stock becomes available in Newcastle’s CBD locations.
Around Newcastle, local agents are reporting higher volumes of stock entering the market, as owners and investors seek to capitalise on the current market highs. We believe the market is currently at the top of the property cycle and how long it stays there will largely depend on macro economic drivers and Sydney property market influences.
While the back half of 2016 will see more high quality units hit the market in and around the CBD, These units are starting around from $300,000 for a 1-bedroom unit and up to $1.2 million for a smart 3-bedroom unit. Agents are reporting good pre-sale transaction rates.
Residential properties in popular holiday destinations such as Port Stephens have remained in high demand and it’s too early to see trends to show otherwise. Agents in this location are still reporting good buyer interest and low available supplies. While around Lake Macquarie some agents are reporting some softening buyer interest resulting from tighter lending practices, although buyer demand is still strong.
The mining and resource industry downturn has seen parts of the Hunter Valley property market exposed to job losses and reductions in rental rates, in many cases, houses have been discounted in order to achieve a sale. Sadly, housing market prospects in these towns dependant on the mining industry do not look likely improve in the short to medium term.
At the time of writing, Williamtown’s contamination issue again dominates the front page of the Newcastle Herald. Unfortunately for many living within the identified contamination zone the nightmare of this situation continues to roll on – but at what cost to all stakeholders involved?
With market commentary surrounding negative gearing, a looming federal election, tighter lending practices, Donald Trump and global economic conditions dominating the headlines it seems the second half of 2016 will be one full of bravado and political rhetoric. How this influences the local property market in the short term remains to be seen, however the fundamentals remain strong in the local market. |
