Half Time! What's the Score?
We’re at the pointy end of the first half of the year, and it’s time to take stock of the first six months of 2023 and its impact on the property market. Luckily, the local market has provided a generally stable response to successive interest rate rises, and according to David Sims (Property Valuer, Herron Todd White*), the expectation of overall property price depreciation has not materialised, but growth has been limited too.
“As would be expected in a generally weak market, demand for property has fallen with less aggression in the bidding process and property taking longer to achieve a sale, however, this is probably what would happen in a normal market which is not overheating,” said David.
“Location-wise, higher demand suburbs are performing well with well-presented properties at sensible asking prices achieving sales without too much trouble compared to those where vendors or agents with high expectations are failing to attract buyers.
“Older properties that appear dated or semi-modern are also achieving less interest, mainly due to the construction industry providing less certainty over timescales and rising build costs, making renovations expensive.”
One of the key factors contributing to the stability of Newcastle's property market seems to be the city's diversified economy. Historically reliant on the mining and heavy industries, Newcastle has made a significant shift towards a more diversified economic landscape. Emerging sectors such as technology, education, healthcare, and tourism have infused the city with new jobs and attracted a wave of young professionals and families seeking better opportunities. This influx of talent has driven demand for properties, keeping the real estate sector buoyant.
Additionally, Newcastle's infrastructure development has played a pivotal role in shaping the property market. The expansion of public transportation, the construction of major roads, and the upgrading of healthcare and educational facilities have enhanced the city's livability and overall appeal. As a result, both local and interstate buyers have been drawn to Newcastle as a desirable place to call home and over the course of the past six months, this has been reflected on the lower end of the market, which has again attracted interest.
“The sub $800,000 price bracket with reasonable presentation has performed well compared to the prestige market, which is falling short due to selling prices not meeting expectations and marketing times being extended due to the lack of active buyers,” said David.
“Mid-range properties between $1 million and $3 million have generally seen some activity in-demand suburbs, however, buyers are becoming more selective when considering a property.
“Vacant land sales have seen a fall in demand, with some vendors or owners struggling to recover from their off-the-plan purchase price at the height of the market. Agents generally report a weakening in demand mainly due to rising build costs, extended build times and risk of price variations due to delays.”
City of Newcastle’s commitment to tackling environmental issues should also prove beneficial to our property market moving forward. A draft Newcastle Environment Strategy designed around the three priority areas of climate change, nature-based solutions and the circular economy sets out a 10-year environmental roadmap for a sustainable Newcastle, with 15 key actions identified to be delivered within the first four years.
The good news is that the property market in Newcastle remains vibrant and promising for the remainder of 2023. The city's diversified economy, improved infrastructure, and focus on sustainable development have contributed to its resilience. As the sun sets on another sunny day in Newcastle, it leaves behind a landscape of opportunities for those seeking a place to call home or investors looking to capitalise on a stable market amidst changing times.
*Source: July 2023 edition of Month In Review, a national property report from Herron Todd White – Australia’s largest independent property valuation and advisory company.
