Newcastle property market – bucking the trend in 2020

Despite the doom and gloom in the headlines and commentary around a post-Coronavirus property market, we’ve seen some great results in the markets we operate in. Newcastle is one such example.

While other major locations, such as Sydney and Melbourne, are facing significant challenges with rental vacancies at this time, DPN’s Property Management team has seen strong demand for new home rentals in the ongoing investment hotspot that is Newcastle.

Australia has not one property market, but many

We’ve written before about the danger of viewing the ‘property market’ as a singular entity. With 8,800 suburbs in Australia, each of them performs based on a variety of factors impacting that location, such as population growth, job opportunities and infrastructure investment.

The Hunter region has been on our investment radar for a number of years. There’s ongoing demand for investment, backed by significant capital works, employment and an excellent lifestyle environment. It’s a popular and desirable place to live.

A bright future in an idyllic coastal location

QBE's 2019–2022 Australian Housing Outlook highlights some key positive data, with the local economy benefiting from increased immigration, with population growth in the area up over the last five years.

QBE believes that 2020, and the years ahead, should be positive for Newcastle as it benefits from a diversifying local economy centred on tourism and logistics. They also identify major infrastructure projects earmarked or in progress as further proof the local property market is on the up. This includes the Newcastle light rail and the expansion of Newcastle University, which should both drive demand for local housing. 

Overall, they forecast average annual price growth for an overall cumulative increase of +11% to June 2022, and a median house price of $630,000.

Its own strong market

In terms of residential property, Newcastle has become its own market and no longer relies on Sydney as it once did. In the past 12 months, Newcastle saw a shift in confidence independently of Sydney; they no longer follow suit like they once did.

Savvy property investors are still seeing Newcastle and supporting areas as a great place to invest due to affordability and also strong growth potential.

You can’t argue with supply and demand

Despite the recent challenges of COVID-19, DPN’s Property Management team have seen demand remain unabated, with new home leasing often seeing double digit applications. This is great news for investors, with a local community actively looking for quality rental homes.

Cassie Nancarrow, DPN’s Property Management Leader explains, “The leasing performance has been exceptional. DPN properties in Newcastle and the Hunter region are typically on the market only a matter of days before they’re leased. Furthermore, right throughout the COVID-19 period, we’ve achieved rents above the appraisal value. For example, in the suburb of Fletcher, we rented a dual income home (a 4-bedroom plus 2-bedroom dwelling) for a total of $855 per week, when the independent appraisal for the property was $830.”

Cassie continues, “What this means for our investor clients, as landlords, is that they have confidence in their investment, even when we see a challenging environment.”