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Newcastle Property Market Update 1st Half of 2022

In Q1 2022, Newcastle (postcodes 2300 and 2303) recorded a median house price of $1,500,000, and a median unit price of $819,750. This represents annual (Q1 2021 – Q1 2022) median price growth of 7.1% for houses and 32.2% for units. Total sales slowed between Q1 2021 – Q1 2022, by -15.7% to 43 sales for houses and by -10.1% for units to 89 sales. Q1 2022 recorded the lowest amount of unit sales between 2021 and 2022, and both markets are undersupplied. Now in ideal time of owner-occupiers to capitalise on their investment, and for developers to enter the market with ready-to-sell stock.

Average vendor discounts between Q1 2021 and Q1 2022 have swung back into a discount of -.0.3% for houses. A premium for houses seems to have peaked in Q3 2021 and Q4 2021, however uncertainties due to the Federal Budget and Election may have translated in Q1 2022, with buyers being more cautious. Average vendor discount remained relatively stable at -1.2% for units

House rental yields in Newcastle, particularly postcodes 2300 and 2303, were recorded at 3.8% in March 2022. In the 12 months to Q1 2022, the median house rental price increased by 14.2% to reach $628 per week, while average days to let remained low at 20 days due to a lack of supply. This confirms there is a healthy level of rental demand in Newcastle.

2 bedroom houses have provided investors with +14.3% rental growth annually, with a median rent of $520.

Newcastle recorded a vacancy rate of 0.9% in March 2022, slightly above Newcastle LGA (1.2%) but below Sydney Metro (1.6%). Vacancy rates in Newcastle have trended upwards slightly since September 2021, however, remain well below the Real Estate Institute of Australia’s healthy benchmark of 3.0%. It has trended within the 1.5% mark for the past 18 months, and with a lower entry price compared to Sydney Metro it presents an attractive alternative for investors. Overall, there is a strong rental market and investors can be confident of a conducive investment environment in Newcastle.

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