The month in review: Newcastle
By Herron Todd White
The residential property market in Newcastle and The Hunter over 2016 has exhibited mixed performance throughout the different areas of Newcastle, Hunter, the Upper Hunter and Port Stephens. These locations are in substantially different stages of the property cycle, which could overall easily be described as two speed. Considering our patch as a whole however, it is the upsizer who is dominant, this being the hard working, 30 to 40 year age group with not enough room in the current home to accommodate the new exciting addition to the family.
Let’s start with Singleton, which is still experiencing declining prices with little to no positive change expected in the near future. There are very little to no investors prepared to lose money, nor could they easily obtain finance if they wanted to. Agents have commented that purchasing in the area is limited to a needs only basis with their vendors accepting losses. Purchasers are upsizing at a discounted price point due to the over supply of property within the market. The price point for a typical 4-bedroom, 2-bathroom home ranges between $400,000 and $500,000.
Suburbs surrounding Maitland including Chisholm, Thornton, Gillieston Heights and Clifftleigh are experiencing a substantial increase of new residential housing development. This market is seeing a combination of investors competing with first home buyers who can still obtain their grants for newly built residences. On average a typical newly built 4-bedroom, 2-bathroom property would be within a price point of between $500,000 and $600,000.
Port Stephens has a more specific type of purchaser, with higher rates of investors and holiday accommodation. This area is also experiencing high demand for land for new residential development. Agents have stated that purchasers are looking for properties that can be knocked down due to the limited amount of new land available.
The price point which is most favoured within the Newcastle patch is the 30 to 40 age group of second home buyers and upsizers. This demographic of families is purchasing their next home within the price point of approximately $500,000 to $700,000 which will purchase the extra bedroom and second bathroom within the desirable 20 minutes of the Newcastle CBD. Specifically it is the well performing suburbs of Hamilton, Mayfield, Lambton, Adamstown and Charlestown where capital growth for 2016 is between 5.3% and 10.5%. There is a combination of factors as to why this price point and demographic is the most active, which also goes hand in hand with why the Newcastle property market is at peak levels. Investors are continuing to experience difficulty entering the market due to lending restrictions, even though there is confidence in property growth. First home buyers are having very little success securing a property as the lower end of the market is also in high demand from the same 30 to 40 years age group of buyers who have the skills and experience to extend and renovate.