1008 Nsw Resi Suburb View Newcastle


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1008 Nsw Resi Suburb View Newcastle

  1. 1. MARKETVIEW October 2008, New South Wales NEWCASTLE Residential Area Overview Situated 162km NNE of Sydney, at the mouth of the Hunter River, Newcastle is the predominant city within the Hunter Region. The Newcastle local government area had a population of 141,753 at the 2006 Census. Yet Newcastle’s wider statistical subdivision area (including the Newcastle and Lake Macquarie local government areas and Fern Bay) is growing at a faster rate than Sydney with around 522,000 residents. The first European to explore the area was Lt. John Shortland in September 1797. His reports of the deep-water port and abundant coal initiated the areas mining in the early 1800’s. Convicts had the painstaking job of mining the coal in this area resulting in NSW colony’s first export. Newcastle remained a penal settlement until 1822 when the settlement was opened to farming. After removal of the last convicts in 1823, Newcastle was freed from the infamous influence of the penal law and began to acquire the aspect of a typical Australian pioneer settlement. A steady flow of free settlers soon poured into the area. The 1989 Newcastle earthquake, measuring 5.6 on the Richter scale, killed 13 and destroyed or severely damaged a number of prominent buildings. The following economic recession of the early 1990s meant that the city took several years to recover. Modern times see Newcastle the economic and trade centre for the resource rich Hunter Valley region and for much of the north and northwest of NSW. Newcastle has the world’s largest coal export port and Australia’s oldest and second largest tonnage throughport. Over 3,000 shipping movements take place a year, handling cargo of 85.6 million tonnes, of which coal exports represented 80.2 million tonnes in 2005/2006. The old city of Newcastle has seen new apartments and hotels built in recent years, but the rate of commercial and retail occupation remains low as alternative suburban centres have become more important. The CBD itself is shifting to the west, towards the major urban renewal area known as “Honeysuckle”. This renewal, to run for another 10 years, is a major part of arresting the shift of business and residents to the suburbs. Residential infill sites are providing the city with product diversity; an example is the heritage area to the east of the CBD centered around Christ Church Cathedral. The area is home to a number of historical Victorian terrace houses embedded in architecturally “sympathetic” modern housing developments. Source – Wikipedia
  2. 2. October 2008, New South Wales Newcastle Dwelling Type Not surprisingly, separate houses dominate Newcastle housing. Of the 58,755 occupied private dwellings, 74% are separate houses, unit and apartments account for 15% and semi-detached terrace houses or townhouses consume 11%. The increased introduction of unit and townhouse developments to Newcastle is likely to see a percentage change in dwelling type come the next census. The largest concentration of high-rise units is in and around the Newcastle CBD. Proposed residential projects will see this area increase in density over the coming years as new mixed-use (including residential, commercial and retail) buildings are built. Larger residential subdivision projects are planned in the suburbs of Fern Bay and Fletcher with medium density continuing in the suburb of Wallsend. Who lives in Newcastle? Tourism is thriving in the region supported by the famous vineyards of the Hunter Region and the city’s historical attractions. The 2006 Census recorded an even division between residents who had never married at 37.5% and those married at 42.5%. The Census also showed residents who owned their home and those renting were equal at 32.1%. Those paying a mortgage followed closely at 28.4% with an average loan repayment of $1,300 per month. Newcastle bears a bright positive outlook that reflects a resource rich town atmosphere and lifestyle coastal living. Newcastle Residential Market While Newcastle’s industrial sector continues to play an important role in the economic strength of the city, Newcastle has evolved beyond its former presence as a ‘steel city’. A substantial and growing portion of Newcastle’s economy is now based around education, health services, tourism, retail and hospitality. The June 2008 quarter saw Newcastle’s median house price correct by -1.91% to $356,000. Annual house sales also dropped to just fewer than 6,000, indicating that a period of correction is underway. The weekly median rent for a three bedroom house was $315, providing a rental return of 4.62%, which is trending upwards. House rents in Newcastle increased $25 per week over the June quarter, supporting increasing yields and reflecting the growing demand for rental accommodation. The unit market in Newcastle has shown similar results, with the June quarter median unit price of $322,500 only increasing 7% in the last four years. Newcastle’s median unit rental yield has risen from 3% to nearly 4.5% during this time. The trend in rising unit rentals is likely to continue with the June quarter median weekly rent reaching $255. Resi-SuburbView 2
  3. 3. October 2008, New South Wales Newcastle Top Five House Sales in 2008 (Post code 2300 only) Barker Street, The Hill sold for $7 million Bar Beach Avenue, Bar Beach sold for $2.7 million Dawson Street, Cooks Hill sold for $2.6 million Church Street, The Hill sold for $2.4 million Memorial Drive, Bar Beach sold for $2.3 million Newcastle Top Five Unit Sales in 2008 (Post code 2300 only) Scott Street, Newcastle sold for $1.77 million Wharf Road, Newcastle sold for $1.36 million Scott Street, Newcastle sold for $1.22 million Scott Street, Newcastle sold for $1.11 million Scott Street, Newcastle sold for $1.1 million Residential Development Supply Pipeline The Newcastle LGA has 3,868 new proposed residential dwellings/lots in the supply pipeline. Across the 84 proposed developments, the majority are unit and townhouse developments ranging in size from two to 13 storeys. An example is the Honeysuckle Lee Wharf shown here, developments like this have modernised Newcastle and made regional city living attractive. From October 2007 to October 2008, 36 projects have development applications lodged, 17 have development approval, 20 have tenders called or contracts issued, and 11 projects are under construction. Those projects that have not yet commenced construction have scheduled completions throughout 2008 to 2014. Due to the increasing cost of construction and tighter lending criteria, it is likely some of these proposed projects will not be constructed with some deferred or abandoned for various reasons. Resi-SuburbView 3
  4. 4. October 2008, New South Wales Proposed Residential Projects in Newcastle (>50 dwellings/lots) Project Address No. Stage Developer Estimated Units/ Project Lots Value UNITS Honeysuckle – Cottage Honeysuckle Dr, TBA Tenders Hunter $20,000,000 Creek Precinct Newcastle Called/Submitted Development Corporation Harbourside Apartments Scott & Bolton St, 59 Development Pacific Lifestyle $5,000,000 Newcastle Approval Resorts P/L Lee Wharf Honeysuckle Dr, 150 Early Planning Lee Wharf $25,000,000 – Stages 4-5 Newcastle Developments Wharf Rd & Centenary Rd Wharf & Centenary 288 Development Kaross P/L $56,000,000 Units Rd, Newcastle Application Hunter Village Hunter St, Newcastle 167 Development Pacific Lifestyle $30,000,000 Application Resorts P/L The Royal Newcastle King St & Shortland 146 Under Construction MIRVAC $89,700,000 – Stage 1a & b Esp, Newcastle Projects P/L Royal Newcastle Hospital Shortlande Esp, Watt 146 Early Planning MIRVAC $50,000,000 Site St & King St, Projects P/L – Stage 1c Newcastle Steel Street Mixed Steel St, Newcastle 131 Development Cartier $25,000,000 Development West Approval Holdings P/L – Stage 2 Total Units 1,087 LAND Dan Land Estate Minmi Rd, Fletcher 346 Construction North West $14,000,000 Residential P/L Abbott Street Housing Abbott St & Newcastle 52 Development SIMHIL $4,725,000 Rd, Wallsend Application Developments Blue Gum Vista Estate Minmi Rd, Fletcher 769 Various Stages Landcom $26,000,000 – Stages 2-3, 5a & b, further Hunter Region stages Fern Bay Seaside Village Seaside BVD, Fern 950 Development The Aspen $80,000,000 Bay Application Group Fletcher Subdivision Plattsburg Pde, 267 Subdivision Kingston $7,900,000 Hebrides & Minmi Application Properties P/L & Rds, Fletcher MIRVAC Homes Total Lots 2,384 Source – Cordell’s (October 2007 to October 2008) What is happening at the Coal Face? CB Richard Ellis is pleased to announce the opening of the Newcastle Residential Valuation Mortgage Services office, located in The Glasshouse at 101 Hannell Street, Wickham. CB Richard Ellis Director of Residential Valuations in the Newcastle office, Peter Fallon describes the local 2008 residential market as one of sand and soil. Beachside property values appear to be holding although a couple of benchmark breaking sales were recorded this year. Newcastle’s beachside property benchmark of $4 million in 2007 was trumped when a house on Ocean Street in Merewether sold for just under $5.5 million this year. Undoubtedly, such high-end sales are infrequent for Newcastle but assist in boosting the regional cities evolution. Moving inland from the beach, Newcastle’s median suburbs reacted to harder economic times with an increased number of properties on the market and extinction of buyers. This stagnated residential market caused a slight correction in values of approximately 5%. However, recent interest rate cuts by the Reserve Bank along with the prospect of more have brought Newcastle’s extinct buyers back to life. SOLD stickers across For Sale signs are being seen again and market activity is slowly returning, albeit at corrected values. With the influx of resource employment and Boeing calling Newcastle home, inner city units are the choice of these Resi-SuburbView short-term renters. This increase in demand has accelerated rents, which in turn is likely to entice investors into the market. Toni McKnight Peter Fallon Senior Manager - Residential Research Director - Residential Valuations CBRE Research & Consulting CBRE Residential Valuation Mortgage Services 4 T 61 7 3833 9773 M 0432 571 724 T 61 2 4926 6433 M 0412 498 798