Why the Newcastle region remains a great location for property investors

Artist impression of Newcastle West

Billions of dollars of investment have poured into Newcastle and Lake Macquarie in recent years (read our previous blog here from Dec 2021).

The Newcastle property market has felt this investment with many quality new developments and record property sales on top of an influx of people and money from other cities including Sydney.

Lately the greater Newcastle region continues to kick goals and a series of events and articles in the last 5 months highlight the attractiveness of Newcastle as a place to live, visit and invest in.  Some of these are detailed below and this bodes very well for the continued growth and prosperity in Newcastle, Lake Macquarie and the extended region.

For property investors, these events highlight very positive macro indicators which correlate to strong future demand, solid capital growth projections and lower risk.

 

Newcastle International Airport to generate 4,500 jobs

July 2023 – The Prime Minister turns the first sod at the new International airport in Newcastle which is expected to generate an estimated 4,500 new jobs and generate billions for the local economy.     The Commonwealth Bank announced in April they would be the sole financier of this project; the $240 million deal with CommBank includes the expansion of Newcastle Airport to enhance domestic capacity and develop a new international terminal and finance to accelerate the activation of the Astra Aerolab.

Anthony Albanese turning the first sod at the site for the new International Terminal at Newcastle

Offshore Wind farm off Newcastle coast to create over 4,560 jobs

July 2023 – Climate Change and Energy Minister Chris Bowen was in Newcastle to declare the nation’s second offshore wind zone off the Hunter coast.   The power-generating wind turbines will cover 1800 square kilometres from Port Stephens to the north of Newcastle, south to Swansea (Lake Macquarie). The project is estimated to have the capacity for hundreds of turbines and generate thousands of jobs.  Newcastle has a long history in mining and energy production, and this focus on renewables and technology “… opens the door for a new industry in the Hunter, which could create over 3,000 construction jobs and another 1,560 ongoing jobs” said Mr Bowen.

Federal Government allocates $70 million for Newcastle Hydrogen manufacturing hub

July 2023 – The federal government has signed off on an agreement to pump $70 million into the Hunter’s first commercial hydrogen manufacturing hub.  A 55 megawatt hydrogen electrolyser, the Newcastle hub is 5 times bigger than any other hydrogen electrolyser at final investment decision stage in Australia.  The project will be a combined effort with Origin Energy and Orica and will be developed at the existing Port of Newcastle Kooragang site.  Most of the initially produced hydrogen is planned to be used by Orica locally but this is seen a key step in planning for the future export of Hydrogen to interested countries like Korea and Japan.  It also represents a further diversification for the Newcastle economy.  Read more here.

Newcastle residential property sale record broken

July 2023 – 8 Berner Street Merewether has broken the Newcastle record, selling for $11,050,000.  Just over 3 years old, this amazing property boasts a 55m uninterupted ocean view frontage and generated interest from Newcastle, Sydney, Brisbane, the US and Singapore.  Eventually being snapped up by a local, the property has 6 bedrooms, 6 bathrooms, 2 car garage and all the modern fixtures and features you can dream of including magnesium heated pool with waterfall, 2 storey guest house, 12-camera back-to-base security, underfloor heating, 2 gas fireplaces, 26 solar panels, Tesla battery, keyless access, near soundproof double glazed 2m tall windows, automated recessed blinds, individual a/c to every room and full home automation.  View the sales listing here.

8 Berner St Merewether sets a new sales record (image courtesy Newcastle Weekly)

High-Speed Rail project – planning starts for Sydney to Newcastle line

June 2023 – The High Speed Rail Authority (HSRA) board has been appointed and their very first priority is to manage the planning and corridor works for the Sydney-to-Newcastle section of the project.   Travelling at up to 250 km/hour, this project is anticipated to revolutionise travel, providing a fast alternative for people to move between cities and regional centres and create broad economic benefits for those areas. Read more here.

 

Corelogic’s “pain and gain report” lists Newcastle property as a top performer

June 202398 per cent of property transactions in Newcastle and Lake Macquarie sold for gains and pocketed sellers an average of $377,000 during the March 2023 quarter. Across the wider region people held their properties for an average of 9.2 years, with the combined total gains across the region totalling $496 Million over the March quarter.   Read more here.

 

Lake Macquarie is the #1 place in NSW for people moving from major cities

May 2023 –  The city of Lake Macquarie encompasses its namesake Lake Macquarie which is one of the most beautiful waterways in Australia.  Twice as large as Sydney Harbour and the largest coastal salt water lagoon in the Southern Hemisphere, the lake is home to amazing sailing, swimming, fishing and many other recreational activities.  With many waterfront suburbs boasting amazing views and private jetties, together with many glamorous beachside suburbs like Redhead and Catherine Hill Bay, it is no surprise that people are leaving the major cities to take up residence in this amazing city.  Lake Macquarie was also ranked 4th most desirable area in all of Australia for people moving from major cities.  Read the article here.

Aerial veiw of Lake Macquarie, from Swansea Heads looking North

Newcastle named NSW top tourist town

May 2023 – Beating the beautiful towns of Ulladulla (2nd) and Wollongong (3rd) on the podium, Newcastle won this prestigous award because of “… initiatives to increase visitors and support local tourism…”.  Lord Mayor Nuatali Nelmes said the award recognised a recent boost in the local economy, including in hospitality.  Newcastle recently secured Elton John concerts as part of his farewell tour and has also secured Pink in February 2024, 2 significant events that show off its world class appeal.

 

The Lake Macquarie suburb of Teralba named #3 in NSW regional areas with the largest house price growth

May 2023 – Homeowners and investors in the lakeside locale witnessed a 125% value increase since 2018. Teralba is on the north-western edge of Lake Macquarie and boasts a mixture of older houses on larger blocks, as well as a brand new subdivision called Billy’s Lookout which will add over 500 dwellings when complete.  On the Newcastle-Sydney train line and with close proximity to Speers Point park and the gentrified Toronto and Warners Bay,  as well as the new Costco industrial site, Teralba still has some good opportunities for the astute investor.

 

Newcastle named as Australia’s hottest residential market

May 2023 – This accolade from Urban Developer has no doubt been spearheaded by the significant investment in the foreshore redevelopment and Wickham Master Plan (read here for more details in our previous blog) as well as the brand new East End renewal project.  Read more here.

 

Council approves blueprint to create future retail and business park creating 6,000 jobs

Apr 2023 – Nestled between the new Costco and Bunnings near Boolaroo on the northern edges of Lake Macquarie, a new retail and business park is planned to generate 6,000 jobs and attract up to 10,000 new residents.  The goal of this site is to establish an “iconic city landmark” that will “generate excitement, attract visitors, residents, workers and customers” from outside the area to promote Lake Macquarie’s “leading role in the region and state”.

 

Newcastle East End Village – Phase 3 commences

Mar 2023 – Phase 1 and 2 of the most significant urban renewal projects ever undertaken in Newcastle, Newcastle East End Village, are well underway.  Phase 3 (which includes 200 more apartments valued at $450million) follows the success of the first 2 phases which have both sold out.  Read more about the final phase which is about to start.

East End Village is expected to become a vibrant urban precinct sprawling four city blocks in Newcastle’s inner-city area (artist impression, image courtesy Newcastle Weekly)

 


Quick population stats on the greater Newcastle region

Australia’s 7th biggest city and NSW’s 2nd largest city, Newcastle has emerged from its mining and “steel city” roots and is transforming into a dynamic and progressive city as you can see from the information above.

When people think of Newcastle though, they don’t always think of the amazing waterways and beaches in the City of Lake Macquarie, the infamous vineyards and entertainment precinct that is the Hunter Valley, and world-class waterways and natural tourism activities in Port Stephens.

These three areas together form a powerhouse regional centre with very diverse economies, opportunites, lifestyles and endless attractions.  Key stats:

  • The greater Newcastle region (classified here as Newcastle, Lake Macquarie, Hunter Valley and Port Stephens) had a population in 2021 of 682,465
  • The population grew 59,943 from 2016
  • This recent 5-year growth was nearly double the previous 5 years from 2011 to 2016 (which was 36,671), an indication of the attractiveness of the area to people. (source ABS)

“…population growth has nearly doubled in the last 5 years…”  


NSW Government Hunter Regional Plan 2041

In late 2022, the NSW government released the Hunter Regional Plan 2041 which identified 100,000 more homes would be needed by 2041 in the wider Newcastle, Lake Macquarie and Hunter Valley region.  In 2021 there were only 292,133 dwellings in the combined region.

Building an additional 1/3 of the current dwelling number is a significant challenge.

That’s 5,555 homes every year for 18 years.

Over the 5 years from 2016 to 2021, an average of 4,707 dwellings were built every year.

That is a shortfall of 848 dwellings per year.

This comes on the back of construction industry pain due to the ongoing impacts of the pandemic and other global issues, with many building companies collapsing due to increased costs.

Weakened private investor activity and reductions in new home approvals, both mainly due to interest rates and inflation, also play into this challenging situation.


Newcastle property investment opportunities

The above planned shortfall is not good for people wanting a roof over their head.  Whilst the Government is working on incentives to increase supply, these can and will take time to come to life.

But it can be an opportunity for investors.  Immigration is booming and the Newcastle region has all the hallmarks for continued population growth.  People drive the demand to rent and buy properties.  Population growth is therefore one the most important considerations when selecting an area to invest in.

Infrastructure projects and the local economy are other important factors and these are all very strong as is evidenced in this story.


Want to invest in property in the Newcastle or Lake Macquarie region?

Nigel Watts, co-founder of Niva Property, is a licensed buyer’s agent, Qualified Property Investment Adviser (QPIA®), qualified Engineer and has over 15 years’ experience helping contractors value and estimate construction assets.

Born and bred in Newcastle and Lake Macquarie, Nigel has lived in Redhead, Belmont, Adamstown, Elermore Vale, Charlestown and now resides at one of the region’s premier suburbs – Merewether.

With a multi-million-dollar property portfolio in various states, Nigel has built up his portfolio to provide him financial freedom to do what he loves – being a buyer’s agent and helping people attain financial freedom using property as a vehicle.

Contact Nigel for a no-obligation discussion about your life and retirement goals and how a Newcastle investment property can help you achieve these.


Main image at top of page courtesy and copyright of of HCCDC (artist impression of the future). Wickham in the foreground, West End and Honeysuckle.

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