Newcastle Property Watch Q1 2014
With Sydney median prices achieving record highs in 2013 investors have also begun to search for greater perceived value.
The region continues to be the beneficiary of significant capital projects investment despite recent volatility in the energy and natural resources, manufacturing and trade exposed sectors. Over the next decade it is projected that total capital expenditure in the greater region will be in excess of $3 billion.
Developers, investors, prospective owners and vendors alike should take notice of the ongoing recovery evident in the market for vacant land in the Newcastle area. Over the 12 months to October 2013 the median land price increased 11.6 per cent to $240,000 and is approaching levels last recorded in 2008. Land sales volume rebounded strongly over six months ending October 2013, up 23.5 per cent to 121 but still below the 146 transactions recorded in the half year to October 2012.
Sustained Price Growth
Newcastle has exhibited strong and sustained growth in the median house price over recent years. Furthermore, the regional market has proved particularly resilient in the face of a range of negative economic influences including the Global Financial Crisis and competitive pressures arising from the persistent strength of the Australian Dollar.
Over the 12 months to October 2013 the median house price increased 8 per cent to $430,000. The median unit price rose a more modest 1.4 per cent over the same period, to $354,950.
Overall improvement in employment prospects, sector diversification and consistent demand for residential stock over time have been key drivers of this trend.
Activity was strongest in the $300,000 to $399,999 range for both house and unit stock for the six months to October 2013. Since the 12 months ending October 2009 there has been a 31.1 per cent increase in the proportion of house transactions above $399,999. Similarly, the proportion of unit transactions for more than $299,999 has increased 15 per cent over the same period. This upward shift in the price point composition of transactions is likely to persist well into 2014 as investor interest increases, largely as a result of affordability relative to Sydney.
Opportunities exist for providers of affordable stock with the proportion of residents living in social housing accommodation 46.6 per cent higher than the national average as at the 2011 Census.