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REAL ESTATE: Newcastle beats to its own drum

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The median house price in Newcastle surpassed Melbourne last month.

Not even wage increases can keep up with the pace at which home values are rising across the country, and just days ago the former steel city recorded a sale of  $8.7 million – a figure thought to be the highest value for a house in the city’s history.

So where and when is this growth expected to end?

According to data released by industry analysts CoreLogic this week, Australia’s property boom may have finally peaked, with figures now falling across much of the country.

And while vendors are still hoping to latch on to the tailend of what was a record-breaking time, a lowering of listing numbers suggests demand is tapering off.

This is not the case for the Hunter though, which as a region continues to defy nation-wide trends.

Last weekend a home in Merewether sold for an eye-watering $8.7 million.

On 22 December, a 1226 square metre property at 30 Lloyd Street, again in the appealing seaside suburb, is expected to fetch in excess of $9 million.

Altitude Real Estate director Paul McAllister says the city’s property market is once again marching to the beat of its own drum.

“Newcastle doesn’t have the aggressive peaks and troughs as the rest of the country,” he said. 

“I don’t think it ever has, and there are several reasons for that.”

Mr McAllister says its location makes Newcastle resilient to many nation-wide trends.

“We’re the first major city in NSW outside Sydney,” he said.

“That still allows access to family and friends in Sydney but without the traffic and the congestion that makes it a capital.

“Another reason is that there are services here that continue to draw people to the region regardless of trends.

“Services like the John Hunter [Hospital] which is a prominent teaching hospital, and the mining industry, our port and the fact that we’re a hub for a lot of specialist work.

“These are things that are always going to attract people.”

Mr McAllister has worked within the Newcastle real estate industry for the past 17 years.

Altitude Real Estate founder and director Paul McAllister

He says while the pandemic and subsequent lockdowns may have fast-tracked the ‘property clock’ a few weeks in what is traditionally a decade-long cycle of market growth, the boom is not yet over for his hometown.

“I’d say we’re back to listing volumes pre-COVID,” he said.

“We’ve got more homes on the market now which means more time for buyers to make a decision. 

“Four to six weeks ago, where we might have had 10 houses on the market, there are now 20. Homes weren’t available for long either, so buyers were forced to grab things fast if they didn’t want to miss out.

The balance between supply and demand remains the constant see-saw within the real estate industry, Mr McAllister says, but there are other driving factors that affect sales in the former steel city.

“Interest rates will always be a driving factor in our industry, that goes without saying,” he told Newcastle Weekly.

“But we’re also now seeing the people that were hosting Zooms and home-schooling and couldn’t open their homes up for sale, they’re now joining the market.

“We’ve got expats returning from overseas who need a place to live, and soon we’ll have the international students arriving, so their parents will be looking to buy.”

New research shows after an initial exodus to the regions, many Australians will return to office work in 2022 which will once again affect the real estate industry, Mr McAllister suggests.

“Initially there were thousands looking for a sea or tree change during the pandemic, but many are now hoping to return to the office,” he said.

“Working from home wasn’t all they’d hoped for and they’re looking forward to joining the office environment again.

“Let’s face it half the world moved to Byron Bay during the lockdown and now that they’re all waiting half-an-hour in line for a coffee every day they’re seeing it’s not all it’s cracked up to be,” he jokes.

“We don’t have that problem here in Newcastle and you only have to look at how many more beautiful beaches we have to understand why people want to live here.”

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