Property Price Forecast 2016 to 2019
The median house price for Newcastle increased 17.5% since 2011, rising from $411,900 in 2011 to $483,400 in 2015. From this strong growth, Newcastle’s median house price is expected to increase by 6% over the three year to June 19 as forecast by BIS Shrapnel. Generally 2016 should be strong around 3% with slowing economic conditions impacting local house prices in 2017 and 2018 reducing growth to 1% and 2% respectively. Plans to revitalise Newcastle and the associate new infrastructure should stimulate demand for housing.
Interest Rate – Remain Unchanged
The cash rate has been left unchanged by the RBA at 1.75% in July 16. There does seem to be some pressure on the RBA to shift rates lower in August due to political and global volatility. Tim Lawless from CoreLogic says ‘the challenge for policy makers and regulators will be to ensure lower mortgage rates don’t refuel a higher rate of growth in the Sydney and Melbourne housing markets where affordability is already stretched and rental yields are pushing to new record lows each month’.
Rental Vacancy Rates
The rental market is showing great improvement in the past twelve months. Vacancy rates for Newcastle reducing to 2.1% in April 16 from 3.0% in April 15 (Source – REINSW). Over the next few months supply of inner city apartments will increase as several apartment projects reach completion. The local rental market should absorb this additional stock well.