Hotspot Location of the Week – Newcastle/Hunter Region

Hotspot Location of the Week – Newcastle/Hunter Region


– Hi everybody, it’s Terry
Ryder from hotspotting.com.au. Bringing you my regular
feature, Hotspot of the Week. One of my strong themes this week and looking forward to coming
weeks as well, probably, is the reality that the strongest markets in Australia right now are
not in the capital cities, they’re in the regions. We have some very, very strong regional property markets at the moment leading on price growth and
uplift in sales activity. And I’m gonna feature one of them tonight, the one that I think is probably right now the strongest individual
market in the country, certainly from the last
12 months in terms of activity and price growth,
and that’s Newcastle. But I want to sort of switch the focus, having initially spoken
about why I think Newcastle is the strongest market
in the country right now to the neighboring areas,
’cause that’s where I think we’re gonna see some future growth. Much of the growth has
already happened in Newcastle. Now, Newcastle is the seventh
largest city in Australia. It’s bigger than two or
three of our capital cities. It’s a very strong
economy in it’s own right and so it’s got a strong
property market because it is a strong regional economy
of lots of diversity, a major export port, all
sorts of things, a RAAF base, it’s links to the Hunter
Region nearby with it’s horse industry and it’s
wine industry, tourism, power generation, all
sorts of different things, all part of the economic
mix for Newcastle, this very strong regional city. It’s got its own reason to grow, but it’s also benefited
from its links to Sydney, so it’s also caught some of the wave, some ripple effect from Auburn
and Sydney and increasingly, Sydney buyers are looked at
Newcastle a couple of years ago, the price comparison was very attractive. With a possibility of people to buy, live in Newcastle and perhaps
even commute to jobs in Sydney because the links are good
between the two places. Newcastle’s market has risen
and in the last 12 months pretty much all the suburbs
of the city of Newcastle have had a couple digit
growth in median prices. Many of them have actually
had more than 20% growth in the median prices. So very, very strong market
with very strong pos growth. The best time to buy in
Newcastle was say, two years ago. But, as often happens, the
growth in the central market is now rippling out to
some of the nearby places. One of those places is the local government
area of Lake Macquarie. And also, then we have the towns of the Hunter region nearby, places like Maitland and Cessnock and then further out to
Singleton and Musselburgh. But just looking at some of the numbers, Newcastle suburbs like
Adamstown, Hamilton area where the median price growth
20-25% in the last 12 months. And then others have grown say 17-19% like Acara and Mayfield. I mentioned, next door is
the local government area called Lake Macquarie,
it’s all part of the Newcastle metropolitan area. It’s just that it’s owned government area. It’s caught the wave, quite
a bit of traction there the price is a little bit cheaper than downtown Newcastle but,
it’s also now seen some very substantial price growth. A lot of suburbs have
grown in double digits in the last 12 months. Some at 14-15% and one is, according to these figures is 30%. It’s probably a
statistical aberration but, it is indicative of the fact that particular area has had
very, very strong pos growth. What I think is gonna happen
is the next growth wave is gonna be in the towns and suburbs in the nearby Hunter region. So we’ve got places like Cessnock, Maitland, Greta, Kurri Kurri, Singleton and Singleton
Heights, Musselburgh. Again, affordability’s
attraction in pricing in Newcastle after the
recent very high growth is now quite high. Not so many cheap suburbs in the Newcastle local government area anymore but, out in the Hunter region, you’ve got a number of
towns with median prices in say, the mid $300,000
so, the pricing there is a lot more attractive
than in Newcastle city. And the rental yield is much higher too. Many of the towns and suburbs
through that Hunter region, near Newcastle, have median rental yield somewhere between five and
five and a half percent. So it becomes quite attractive
for property investors when you look at those numbers. You just have to believe there’s going to be some growth there. And I believe the growth is coming. The Hunter region has been
a strong growth market in the past. Then it went through a downturn because developers flooded the
market with new product. They built too many new
house and land packages and created high vacancies. That’s all been absorbed. The economy of the Hunter
region is becoming strong again. And we’re seeing sales activity pick up a lot in those areas. That’s a precursor I
think, to prices growth and some of the towns have already had some pretty substantial nine,
10, 11% type price growth. Cessnock median price up 10% for example, in the last 12 months based
on almost 400 house sales. Median price is now $340,000. So, pretty solid market. Coming strong again. Underpinning it all is, the local economy. Lots of big spending
happening in Newcastle and in the Hunter region. It’s the resources sector
area, big export port, the Williamtown RAAF
base is having right now, a billion dollars spent on development and expansion there. We’ve got expansion on
the port of Newcastle, billions of dollars being spent there. That’s an ongoing thing that seems to be constantly happening. Road projects, the Hickson
bypass, $600 million. Inner city bypass on
Newcastle, $280 million. Newcastle light rail
project, $500 million. An aerospace center at Williamtown, near the RAAF base, $500 million. There’s a marina project,
almost $400 million. And then, lots of big
residential developments including, the creation of new suburbs, major master plan communities. There’s a lot happening. A lot of construction jobs. The CBD of Newcastle
was being revolutionized with urban renewal projects, development of apartment projects. Just, a very vibrant economy. Lot’s of money being
spent on infrastructure, and property development. And we’re seeing strong price growth. My expectation is that
the growth the we’ll be seeing in Newcastle is going to be felt out in the those towns in
the Hunter region as well. It’s really one to take notice of. In terms of recent price growth, arguably the strongest market, in all of Australia,
including the capital cities. Growth higher than we’ve seen in the hottest of the capital cities
right now which is Hobart, and prospects for ongoing growth out there in the Hunter regions. Really worth a look. As is regional Australia generally. Particularly right now, New
South Wales regional markets and Victorian regional markets. I think, in little while we’ll be talking more about regional markets in Queensland. But right now, the big action, the strongest markets, are regional New South Wales, regional Victoria. Even as their capital cities wind down, those regions are cranking up. Newcastle has been the forefront of it. We think it’s growth
is going to ripple out to some of the neighboring areas. They’re the ones to watch. The Newcastle and Hunter
region is this week’s Hotspot of the week. If you’d like to learn more, you can go to the
hotspotting.com.au website and go to the location reports page. We have a location report on Newcastle. We have a location report
on the Lake Macquarie, a local government area, and
a market in it’s own right next door to Newcastle. And then we have a location report on the Hunter region as well. So there’s three there that cover the area I’m generally
talking about tonight. So, get those reports. They’re packed full of good,
solid information analysis. Easy to read. And give you the reasons why we think these markets are worthy of consideration. Okay, so that’s it for now. That’s Hotspot of the week for this week. It’s Terry Ryder from
hotspotting.com.au signing off. I’ll talk to you again soon.

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