BY JESSICA ROUSE
Experts say the flattening out of Newcastle's median house price was inevitable after a considerable housing boom this year.
The median house price has dropped by 2.5 per cent in the September quarter going from $610,000 down to $595,000 in Newcastle.
Compared to other regional areas Newcastle is quite attractive affordability wise; the median house price in Wollongong is $650,000 and $750,000 in the Southern Highlands.
Domain group Chief Economist Dr Andrew Wilson said we're one of the strongest regional growth areas when it comes to house prices and this is the first time they've fallen flat in 18 months.
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| Dr Andrew Wilson. Image domain.com.au |
"Despite that quarterly fall in prices, Newcastle house prices are now up by 13.3 per cent over the past year and it has certainly been one of the strongest performing regional centres in Australia over the last year and there's been some consolidation there recently,"
"Similar to Newcastle, Wollongong after very strong growth over the past year has also tracked backwards over the September quarter down by 1.9 per cent. And similar to Newcastle, Wollongong's median house price has increased by 13.9 per cent over the past year and I think this is just another story of consolidation of very strong prices growth," said Domain group Chief Economist Dr Andrew Wilson.
Dr Wilson believes tighter bank lending to investors who were quite active in Newcastle is taking some of the blame for the drop in the median house price.
He said the flattening is a part of the cycle of house price growth and fall.
"The market's now finding a level and I wouldn't be surprised if prices continued to grow over the year, but I don't think we'll see the same sort of results we've seen in terms of the rate of growth and the boom time rate of growth over the last year."
Sydneysiders have discovered what Newcastle has to offer and are buying up, and even better the lower prices are better for first home buyers who don't need to pay stamp duty at the moment either.
"Newcastle still offers some considerable affordability advantages to the Sydney market. The current median of $595,000 in Newcastle is still well below the Sydney median which is just under $1.2 million," said Dr Andrew.
