The month in review: Newcastle
By Herron Todd White
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.