Newcastle median sale price up 7.4 per cent in three months with Sydney buyers behind rise
Newcastle house prices are growing at a rate of $2000 each week as NSW’s second largest city experiences one of its strongest property booms yet.
Unprecedented price growth is being driven by a shortage of stock, low interest rates, housing demand in coastal communities and Sydney buyers.
Real estate agents and developers are reporting “incredible” demand for property from Sydney buyers who have been priced out of their market and are also searching for a better lifestyle.
This has seen the Newcastle median house sale price grow 7.4 per cent in the past three months to $690,000 — or about $2300 per week.
The median sale price for houses in Newcastle is $690,000 and $540,000 for apartments.
Apartments have grown 6.9 per cent in the previous three months to $540,000, according to realestate.com.au.
Ray White Newcastle principal Darren Penn said the market had been “ridiculous” in the past three months with March having the highest buyer activity he had ever seen.
“We had a 250-300 per cent increase in our sales volume than a typical March,” he said.
Mr Penn said while Sydney buyers remain active, they had dropped off slightly due to many
frustrated with Newcastle’s surging house prices.
“Sydney buyers really have no one else to blame for the surge in house prices but themselves as they are bringing in a lot of money,” he said.
The Ray White principal said he expected the coming months to be favourable towards sellers because there were under 800 properties on the market in Newcastle — 400 fewer than last year.
Thirdi Group’s upcoming Stella development has been very popular with Sydney buyers.
“This has seen many buyers look towards developments as there is not enough stock to go around,” he said.
Developer Thirdi Group saw lots of Sydney buyers purchase in their Eaton and the nearly completed Stella developments in Wickham. The group’s director of sales marketing Luke Berry said Sydney buyers were fed up with paying a lot to live on the city fringes.
“Newcastle is appealing because it is not just cheaper but also allows them to get a brand new apartment in the inner city near the beach,” he said.
“We’ve had buyers renting old two-bedroom units in Bondi for $1500 per week and are relocating to a brand new three-bedder for half the price.”
Mr Berry said there has always a trend of people leaving Sydney for more affordable areas, but has been sped up by Covid-19.
The Stella development is due to open in the coming months.
“The ability to work from home has made Newcastle a great location as Sydney buyers can work remotely for most of the week and commute by train for a day or two,” he said.
Mr Berry said the majority of buyers relocating from Sydney had been young families and first homebuyers, but added there had been a trend of parents also following their kids to Newcastle.
This trend will see Thirdi look to target both demographics with their new Dairyfarmers project in Wickham and an over 55s development at Merewether Golf Course that will launch in the coming months.
“We are designing these products to be attractive to Sydney buyers,” Mr Berry said.
Former Sydney resident Anthony Wood recently moved into Thirdi’s Eaton on Union development at the end of last year.
“Dairyfarmers will have high quality finishes and also spaces that will allow buyers to work remotely.”
Former Sydney resident Anthony Wood and his family moved to Thirdi’s Eaton development in Wickham last December after being priced out of the Sydney housing market and craving a better lifestyle.
“Our move to Newcastle has seen us get significantly more bang for our buck,” he said.
“We’ve also been able to achieve a lifestyle similar to North Narrabeen on the northern beaches.”
Mr Wood added the dream of owning their own property combined with living on the beach and near the city made the move worth it.
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