Newcastle Property Market Update 1st Half of 2021

In Q1 2021, Newcastle recorded a median house price of $875,000, and a median unit price of $626,250. This represents annual (Q1 2020 – Q1 2021) median price growth of 10.4% for houses and 12.8% for units. Between Q1 2020 – Q1 2021 total sales increased, by 5.0% for houses (to 148 sales) and by a strong 92.8% for units (to 160 sales). Median price growth coupled with increased sale activity suggests there is real returns on capital investment in Newcastle. Now is the time to transact, particularly for owner-occupiers looking to benefit from a highly demanded market.

Average vendor discounts between Q1 2020 and Q1 2021 have swung to a premium of +2.6% for houses and tightened to 0.0% for units and. Market conditions in Newcastle have now shifted to favour vendors, as buyers are willing to offer either the first listing price (units) or above (houses). A house premium is a first since late 2019, thus advantageous for sellers.

In March 2021, house rental yields in Newcastle were recorded at 3.4%. In the 12 months to Q1 2021, the median house rental price has increased by a strong 10.6% to reach $550 per week, while average days on the market declined by -27.1% (to 17 days). Overall this has proven Newcastle to be a strong and resilient rental market throughout COVID-19.

4+ bedroom houses have provided investors with +9.5% rental growth annually, achieving a median rent of $690 per week.

Also in March 2021, Newcastle recorded a low vacancy rate of 1.8%, above that of Newcastle LGA (1.1%) but well below Sydney Metro (3.4%). Vacancy rates in Newcastle have trended downwards since April 2020, remaining well below the Real Estate Institute of Australia’s healthy benchmark of 3.0%, even amidst COVID-19 conditions. This confirms there is a healthy rental demand, showing investors can be confident of a conducive investment environment in Newcastle.