walkom

443 Hunter Street 2300 Newcastle , NSW
Phone: 02 4974 8900
Property Market Update - November/December 2016

walkom

443 Hunter Street 2300 Newcastle , NSW
Phone: 02 4974 8900

Scott Walkom

Property Market Update – November/December 2016

mailchimp2

 

6% pa Median house price average growth in Newcastle Local Government Area (Sept Qtr)

5% pa Median house price average growth in Lake Macquarie (LGA). (Sept Qtr)

 

newcastle-house-prices

 

 

 

 

 

 

 

 

 

 

Positive factors driving the property market;

  • Low mortgage rates – lowest rates since the 1960’s
  • Investors a large part of the market – 48% of new mortgages are to investors (Last year 55%)
  • Low stock levels – less property for sale means more competition from buyers and a sense of urgency for buyers to purchase quickly. The number of sales transactions in Sydney are down 18% compared to last year and in Melbourne they are down 20%.
  • Locally, the Newcastle inner city revitalisation work such as; the Wickham transport interchange, light rail project, and the University Campus (opens late 2017) are creating huge interest in Newcastle.

Some head winds effecting the market;

  • Banks have tightened lending policies and require larger deposits
  • Supply levels may trend higher as approvals move through construction phase
  • Rental yields are at record lows and may act as a disincentive. Gross yields on houses are 3% in Sydney and Melbourne.
  • Housing affordability is becoming stretched as prices out pace household income growth.
  • Offshore investors are now a smaller component of the property market due to stricter lending policies and government rules.

Summary
‘Despite these headwinds, with conservative asset classes like cash or government bonds offering low returns and share markets remaining volatile, it’s likely that housing investment will continue to be a popular option. Although gross rental yields are at historic lows, they remain higher than rates for cash deposits and are quite attractive when you factor in the growth in home values as well as the yield, especially if investors are using larger deposits.’

Sources
Corelogic / NAB Business Research and Insights. Australian housing market update. October 17, 2016.
Hunter Research Foundation September Qtr 2016 Hunter Economy Update

 

To see our full market report for the November/December follow this link 

 

 


Leave a Reply



(will not be published)


About comments
Please be respectful of others when posting comments.

* = Required fields