The month in review: Newcastle
By Herron Todd White
Autumn is over and winter is fast approaching if recent storms are anything to go by. What does this mean for the Hunter region and its property market?
The yearly halfway mark is not far off and house prices are still increasing. According to RPData, over the past year we have seen a 14.5% increase in house prices within the area. This is a substantial increase over a one year period and we are left wondering when this increase will show signs of slowing.
The Hunter region, being the largest coal producing location in Australia, can become a slave to the price of coal and a small pebble thrown in the world pool of coal prices can have an enormous ripple effect on the local Hunter economy. Coal prices were a significant factor in the Hunter weathering the Global Financial Crisis so well. Lately we have seen the price of coal drop significantly and this has been a damaging element to the Hunter property market, especially within Singleton and surrounding suburbs. House prices within this region are trending downwards at present with no obvious growth prospects on the short term horizon. Driving through suburbs of Singleton supports this contention as most streets have many properties for sale with little or no sold stickers plastered on the sign boards.
The Newcastle market is still on the rise with house prices seemingly ever-increasing especially in inner city suburbs such as Cooks Hill, The Junction, Merewether and Hamilton. The question is what is driving these prices and we think it primarily comes down to location and scarcity of stock. People want to live close to the beach and within the CBD suburbs and with interest rates taking another cut lately, that makes it a lot easier for many families to justify the move to inner city if they can find the right property. That, however, is easier said than done.
Moving away from Newcastle and up north we come to Nelson Bay, which could be described as the Florida of New South Wales. Surrounded by beautiful bays this is the perfect place to retire with many serviced apartments available for occupation as holiday retreats with beautiful views, excellent facilities and handy to all the local amenities.
The property market here shows much stability at present with mortgagee in possession sales seemingly a thing of the past. You can live in a tranquil beautiful serene location and still have the advantage of being close to infrastructure and also less than an hour’s drive to Newcastle.
The Hunter property market could be considered reasonably volatile at present with different drivers being exhibited in different locations, some good and some bad. Given this, investors need to be wary of where they invest, especially out of towners with limited local knowledge. Our advice is to seek local expert information and have a drive around the localities in question. A simple drive around can highlight things of note that are not evident from a sterile sales ad.