Newcastle is quickly becoming a sought-after lifestyle destination. Newcastle is growing, and there is only more to come. The NSW State Infrastructure Strategy 2018-2038 suggests that Newcastle, Wollongong and Gosford will be important economic hubs with key transport and freight gateways, and strong service-based industries. Ref: NSW Gov. Despite the active market, we have been noticing a big change in trends in the market over the last 12 months.
Forsythes Recruitment and HR’s latest annual Employment Trends Report found that Newcastle are experiencing one of the biggest jobs surges in a decade, although the bulk of these jobs are part time. Jobs growth in the Hunter is 7.4 per cent, outstripping state-wide growth of 4.3 per cent. The outlook for work and wage prospects in the region can be summarised by ‘three Cs’: computers, construction and commodities. Ref: Newcastle Herald.
With growth in jobs in the Hunter, and updates to infrastructure, Newcastle properties are selling for record prices. Investors haven’t been as active in the Newcastle property market, as home owners step in. We’ve listed recently sold properties, auction data, and potential reasons for inactive investors.
92 Carrington Street Mayfield
The 3-bedroom house previously sold in November 2007 for $147,500 and ten years later, was sold in November 2017 for $570,000.
The Mayfield property was on the market for 15 days, with 15 groups of buyers through. The home is situated on a 446m2 block and in need of a renovation. The Carrington Street property sold for $20,000 above the listed price.
Carrington Street Mayfield had its first million-dollar sale this year and other streets in the area have been following suit.
Mayfield has seen 68.3% capital growth over the last 5 years and the average days on market is at 16 days. The current median house price for Mayfield is $581,625 as of March 2018 compared to the same time last year when it was $500,000.
Set on a large 1027m2 block this property presented a unique opportunity for the area. The 4-bedroom 2-bathroom home had recent updates throughout with new carpet, blinds and painting, however had the original bathrooms and kitchen.
This property sold for $670,000 in March this year, previously selling for $510,000 in March 2016. The Dianella Court home had 22 groups of buyers enter its doors at open homes and took 41 days to sell.
Warabrook has seen an increase of 39% in capital growth in the last 5 years with an average of 35 days on the market. The suburb currently has a median house price of $600,000 as of March 2018 compared to the median house price at the same time the year before at $547,500.
This data has been recorded by Reynolds Auctioneers since the beginning of the year. In February, they recorded a clearance rate of 67% out of 56 properties which went to auction. In March they took 40 properties to auction with a clearance rate of 75%. April saw 38 properties go to auction with a clearance rate of 63% and in May, a decline in the clearance rate as it dropped to 52%.
We have been noticing a big change in trends in the market over the last 12 months, last year the market was still very active with many investors attending open homes and purchasing properties for investments. This has now almost done a complete 180 flip with first home buyers dominating the market. I believe that this change is due to the exemption of stamp duty for first home buyers for properties purchased under $650,000 which was introduced in July last year.
Potential reasons as to why investors have disappeared from the market is because of banks tightening their lending requirements for investors asking for 20% deposits and higher interest rates. Investors have also noticed that rental returns haven’t been as high compared to the return from a few years ago, which may explain their inactivity.
Looking back on the last 12 months of the 17 properties we have sold, only 4 were purchased by investors compared to 13 purchased by home owners. We have noticed that investors were more focused on securing properties in strata complexes rather than houses, as the 4 properties that were sold to investors were either Townhouses or units. Out of the 13 other properties which were sold, 6 of those were purchased by first home buyers and the remainder were buyers either reentering the market, downsizing or up sizing.
Curious about the value of your property?
If you would like to find out what your home in Newcastle could sell for, get in touch with Chris and the team at Arnold Property.