The Smartline Report – November Edition

The month in review: Newcastle

By Herron Todd White
November 2016

Residential property owners are tapping into their growing equity to utilise investment opportunities. And why not, given that at any point in the year we are all drawn to watching renovation (reality) TV programs, creating that desire to take on a project from start to finish yourself.

Smaller scale development options can include a minor subdivision of a large residential block, allowing for a second dwelling, granny flat or even a knock down and re-build with townhouses. All are appetizing small scale projects for novice investors.

In our patch of Newcastle and The Hunter, mum-and-dad investors may have difficulty sourcing an investment opportunity for small scale development within a desired budget. Given the stronger property market within the confines of Newcastle itself, turning up to Saturday’s open homes and attempting to get through the front door can only be described as being more hectic than the mosh pit of a 1992 Metallica concert in Alabama. We also note that this is the same case across every price point within the region with recent sales of blue chip properties upwards of $3 million.

Higher competition between prospective purchasers ultimately reflects higher sale prices, which will influence the end profitability for the investor. Given this, investors are currently not evident in the Newcastle market, unless the typical mum-and-dad investor is looking to upsize and can secure a property with re-development potential in the long term.

Reaching out to Port Stephens, in particular Colette, Salamander Bay and Nelson Bay where there is low supply in any residential land availability, any block that has the potential to provide additional housing is in high demand.

In areas with continuous expansion of residential development such as Fletcher, West Wallsend, Gillieston Heights and Chisholm, mum-and-dad investors seeking to increase their portfolios are looking to grab the corner or wide frontage block that will allow for a duplex pair to be built.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2016. Australian Credit Licence Number 385325

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.