Newcastle's Housing Prices Fall Flat for the First Time in 18 Months

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.

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.

A mixed bag for the Hunter economy

BY JESSICA ROUSE

The latest economic snapshot for the region has been released by the Hunter Research Foundation Centre.

It's a mixed bag, with the June quarter bringing subdued income growth and consumption, improved business confidence despite a decline in household confidence and a fall in the unemployment rate.

Lead Economist DR Anthea Bill says the state of the region's unemployment and employment rates are quite positive.

"The Hunter economy added 4,500 jobs and that was a growth of 1.4 per cent so that's in line with the state and a lot of those new jobs that were added to the economy were full-time jobs and growth was strongest in males and over the quarter male part-time employment actually contracted."

It's good news for first home buyers, but not so good for home owners - there's been a 2 per cent decline in Lake Macquarie and a 5 per cent drop largely in Dungog, Port Stephens and Singleton.

"The median house price across the Hunter declined in the June quarters of 2.4 per cent decline so that's the first time we've had a negative quarterly growth in median house price since September 2015 and that's led to a slowing of the annual growth rate to 6 per cent," said DR Anthea Bill.

However, while there are a few positives, DR Anthea Bill says apprenticeships for young people have been on a steady downward trend since 2012 with a 24 per cent decline.

"I understand there was some removal of employer incentives around that time period and there have also been overall shifts in employment away from manufacturing which has been a very strong provider of apprenticeships and traineeships in the region. I heard commentary also around the wage rate for apprentices and trainees."