Newcastle Property Market Update 2nd Half of 2022
In Q3 2022, Newcastle (postcode 2300 and 2303) recorded a median house price of $1,215,000, and a median unit price of $835,500. This represents annual (Q3 2021 – Q3 2022) median price softening of -11.3% for houses and an increase of 8.3% for units. Total sales slowed between Q3 2021 – Q3 2022, by -20.0% (to 44 sales) for houses and by -33.6% for units (to 79 sales). These trends suggest cash rate hikes is starting to translate into the market, with median house price growth turning even in an undersupplied market. The unit market remains strong, thus a unique opportunity for sellers and buyers.
Average vendor discounts between Q3 2021 and Q3 2022 for houses have trended to a lower premium of 1.9%, which still favour vendors as it is above the first list asking price. Units on the other hand have widened to a larger discount for buyers, at -4.0% in Q3 2022. With an undersupplied unit market, and sellers offering below the first list price, now is an ideal time to transact.
House rental yields in Newcastle, particularly in postcodes 2300 and 2303, were recorded at 2.9% in September 2022. In the 12 months to Q3 2022, the median house rental price increased by 1.7% to reach $610 per week, while average days to let remained low at 21 days due to a lack of supply. This confirms there is a healthy level of rental demand in Newcastle.
3 bedroom houses have provided investors with +6.2% rental growth annually, achieving a median rent of $690 per week.
Newcastle recorded a vacancy rate of 1.1% in September 2022, which is slightly below Sydney Metro’s 1.6% average. Vacancy rates in Newcastle have held relatively steady over the 12 months, and trending within the 1.5% mark for the past 24 months. This indicates strong rental demand coupled with limited supply in the market. Vacancy rates in Newcastle have consistently trended under the Real Estate of Australia’s healthy benchmark of 3.0%, indicating a sustainable investment environment for investors. The current market downturn further emphasises an opportunity for investors to enter the market.
