The Hunter has recorded some of the largest house price increases in Australia over the past year as more people seek to move to the region in search of lifestyle options they could only dream of in capital cities.
Fairfax Domain Group data released on Thursday shows Port Stephens is leading the Hunter price boom with a year on year increase of 16 per cent followed by the Upper Hunter with an increase of 15.9 per cent.
Newcastle recorded year on year increases of 7.9 per cent, Lake Macquarie 6 per cent and Maitland 5.9 per cent.
By comparison, Sydney house prices have experienced a 4.5 per cent fall over the past year.
The median house price in Sydney now sits at $1.14 million compared to $650,000 in the Lower Hunter.
Unit prices were also up across the region, but most notably in Newcastle, over the past 12 months.
“Regional areas like the Hunter are out-performing Sydney across the board,” Fairfax Domain Group data scientist Dr Nicola Powell said.
Relative housing affordability combined with lifestyle and access to employment opportunities is continuing to lure people out of Sydney to areas like Newcastle, Maitland and Lake Macquarie, Dr Powell said.
“Proximity to transport links is also important. The number of people who have a job in Sydney but only work in the office one or two days a week is definitely increasing,” Dr Powell said.
Home sweet home: First home buyers Hollie and Dylan Streeter bought their three bedroom house in Cardiff South in February after saving for a deposit for two years. Mr Streeter said surrounding infrastructure affected their decision to live in the suburb. Picture: Jonathan Carroll
“It’s a trend that I can see continuing as more people look for ways to be able to spend more time with their families.”
The 16 per cent increase in property prices in Port Stephens was among the highest reported in regional Australia in the past year.
At the top of the market was a five-bedroom beachfront home in Randall Drive, Salamander Bay that sold for $3.6 million at auction in March.
Going up: Port Stephens is leading the Hunter price boom with a year on year increase of 16 per cent. It was followed by the Upper Hunter with an increase of 15.9 per cent.
The transaction represented the highest sale price in Port Stephens in the past eight years.
Lucas Gresham, from Dowling Real Estate Wallsend and Stockton, was among those predicting the boom would continue.
“The middle of the Sydney market is about $1.5million and it’s about $650,000 in Newcastle. It’s no wonder we are seeing a lot of people from Sydney looking further to areas like the Central Coast, Newcastle and the Upper Hunter for a better quality of life,” he said.
“I recently sold a property to someone who just sold a house they had been living in in Sydney for 24 years. It cost him nothing to buy but he sold it for $3 million and was able to buy a beach house at Stockton and has enough money to retire.”
Australian Property Monitors show that Mr Gresham sold 19 Paperbark Court in Fern Bay last October for a suburb record of $920,000.
Infrastructure improvements, particularly the revitalisation of inner Newcastle and the expansion of Newcastle Airport, were a driving force behind property prices.
“Newcastle is coming ahead in leaps and bounds; there’s really no other place you would rather live. Aside from the city it is surrounded by beautiful beaches,” Mr Gresham said.
The new property price data follows the increase in rental prices in the region.
As with property prices, rental prices also increased sharply across the many parts of the Hunter, particularly in inner Newcastle, over the past year.
While the property price boom is good news for investors and those moving from Sydney, it is becoming increasingly difficult for those seeking to break into the property market.
First-home buyers Hollie and Dylan Streeter spent two years living with Mr Streeter’s grandmother to save a deposit.
The couple moved into their three-bedroom Cardiff South Property in February after looking at a variety of properties around Newcastle.
“Property prices are only going up,” Mr Streeter said.
“We had a look at a place in Mayfield. It was closer to town but the place we bought was much better value for money considering the amount of work we would have had to do to the Mayfield property.”
Aside from price and location, Mr Streeter said existing infrastructure was a major consideration.
“There are three schools nearby and good public transport links, which are important to us,” he said.
The Hunter Research Foundation Centre’s first Home Buyer affordability index was at its highest level (most unaffordable) in June 2017.
Property Council Hunter Future Directions committee member and Director of Project Marketing at Colliers International, Dane Crawford, told a forum in February that the state government needed to do more to make housing more affordable.
“The cost of getting a plan through the system is ridiculous, and construction and holding costs are rising,” he said.
“Developers will not deliver affordable housing at a loss.”
Sharon Pope, manager of Integrated Planning at Lake Macquarie City Council, is looking to improve the economics of developing housing in Lake Macquarie.
“We need to improve certainty for developers and decrease the time it takes to navigate the planning system,” Ms Pope said.
Council had encountered community resistance to medium density housing development applications.
“The community do not support clearing bushland on the city margins for development,” Ms Pope said. “But we also get opposition to medium density housing development applications closer to town centres.”
Compass Housing’s Group general manager Greg Budworth said Australia and the Hunter had an affordability crisis that went beyond housing.
“The population is increasing, we are not producing any more land, so the answer to solving affordability is bringing supply to the market,” he said.
Mr Budworth said that although negative gearing and capital gains tax concessions needed to be reviewed, there was a case for retaining them. He also said negative gearing could be more targeted to new residential builds to spur supply.
SOURCE: Newcastle Herald
POSTED: July 26, 2018
AUTHOR: Matthew Kelly