The Newcastle region in New South Wales is a popular destination for homebuyers due to its excellent weather, location, and strong economy. The region’s picturesque beaches, booming industries, and vibrant culture have historically benefited its property market. However, like many areas across Australia, Newcastle’s property prices have experienced a state of flux since the global pandemic in 2020.
To stay prepared and equipped to navigate the property market in 2023, it’s essential to research and understand the past and current real estate trends in Newcastle, NSW. This article will take a look at Newcastle’s housing market — past, present, and future — and identify key factors influencing property prices and the best high-growth suburbs to watch in 2023.
Newcastle, NSW – 2023 Region Profile
Newcastle is located on the Hunter River, about 160 kilometres north of Sydney. With a total region population of 461,000 people in 2023 and a city population of 174,175, Newcastle is a significant economic and education hub for the Hunter Region.
Here are some key statistics about the Newcastle region for 2023:
- Population: 461,000
- Population growth rate: 0.88%
- Population density: 1,103 people per kilometre
- Median weekly household income: $1,760
- Median house price: $1,250,000
- Median unit price: $773,750
- Median house rental price: $650
- Median unit rental price: $600
A Historical Look at Newcastle’s Housing Market
Newcastle’s property market experienced a significant boom in the late 19th and early 20th centuries due to the city’s strong economy and growing population. In recent decades and coming into the 21st century, Newcastle’s property market has continued to grow, as has its economy. Newcastle’s economy is strengthened by the major industries at work in the city, including manufacturing, mining, and tourism. Newcastle also benefits from its proximity to Sydney — one of Australia’s most prosperous and populated cities.
The Newcastle region population is the driving factor behind Newcastle property trends. The population nearly doubled in the last 50 years. Growth has slowed in recent years to a current growth rate of 0.88% but has remained consistently positive since 1950 — the growth rate ranges from 0.25% to 5.11%. According to U.N. Projections, the region’s population will reach 500,000 by 2031. Driving factors behind population growth include the strength of the economy, the availability of jobs, and the wide range of affordable housing and rental properties.
Average House Prices & State of the Market in Newcastle
Newcastle’s average house and unit prices have historically increased in accordance with the economy and the rising demand for properties. However, the past year has seen a marginal slowdown of this trend — and even a small turnaround.
The average house and unit prices were $1,215,000 and $835,500, respectively, in Quarter 3 of 2022. According to recent data from Quarter 1, 2023, those average prices are now $1,250,000 and $773,750. So, in the last six months, the average house price has increased by 2.88%, and the average unit price has decreased by 7.39% — an intriguing result.
To investigate this simultaneous increase and decrease, it’s worth going further back to see what things were like in Q1, 2022. Back then, Newcastle house prices averaged at $1.5 million and unit prices at $819,750. From Q1 in 2021, this represents a year-on-year growth of 7.1% for houses and 32.2% for units.
Jumping back to Q1 2023, the year-on-year change from 2022 to 2023 is a property price decline of 18.6% for houses and 7.3% for units — an opposing change from what occurred between 2021 and 2022. The number of property sales also declined dramatically between Q1 2022 and Q1 2023 — a 40% decrease for houses and a 26.9% decrease for units.
Even though property prices are down, rental prices are still rising — especially for apartments, which are much more popular for buying and renting in the Newcastle region and CBD. Also, vacancy rates in the Newcastle region are low — around 1%.
The combination of these trends poses an interesting state for the Newcastle property market in 2023. The conclusion? Now is a perfect time to invest in property and profit from rental yields.
Key Factors Influencing Newcastle’s Property Market in 2023
Global and local economy
Newcastle’s property market is heavily affected by economic trends and, subsequently, the cost of operations. A strong economy (global and local) can increase the demand for housing — which can drive prices up. As a central employment hub, Newcastle’s economy and population have been consistently strong, so property prices have seen an overall increase from year to year and decade to decade, albeit with a slight decline this past year, likely linked to a reduction of job opportunities as more people move interstate for work.
Increased demand for properties
In 2023, there is a high ongoing demand for rental properties and investment properties alike. As Newcastle’s population continues to grow, more people than ever are looking for affordable rental properties. As such, there is also an increased demand for investment properties from those who want to take advantage of high rental yields and potential capital growth.
Pandemic recovery phase
The real estate sector in Newcastle is also in the middle of a pandemic recovery phase, which has resulted in hard-to-predict fluctuations in property prices and rental costs across the region (and Australia-wide). The pandemic will likely continue to have an impact on Newcastle’s property market in 2023.
Property Market Trends in Newcastle for 2023
Investment properties: The demand for investment properties in Newcastle is driven by strong rental yields, increased competition, and a slight decrease in property prices (mainly for units. Lower property prices make 2023 an excellent time to buy an investment property and wait for property prices to go back up.
Average rental price: Newcastle’s rental prices for houses averaged out at $650 per week between May 2022 and April 2023 and $600 per week for units. Rental prices for houses are down 13% from the previous year, while they are up 5.3% for units, according to the latest data from Real Estate. The trend shows that apartments for rent are much more popular than houses.
Rental yields: As with many other cities, Newcastle’s rental yields are expected to remain fairly strong, making it a good time for investors to rent out their properties, especially apartments. The average rental yield for units is 3.9% and 2.7% for houses.
High Growth Areas to Watch for Newcastle, NSW, in 2023
One of the best ways to earn a passive income is to invest in a property and watch it grow over time. Some of the best high-growth suburbs to watch in Newcastle include:
- Merewether, a popular beachside suburb with high investment value.
- Adamstown Heights, a residential area with affordable house and units prices.
- Mayfield, set against the Hunter River, with a low median house price.
- Charlestown, one of Newcastle’s best shopping destinations with affordable house and unit prices.
These suburbs present some of the best investment opportunities in Newcastle for 2023. If you’re considering investing in Newcastle, it’s essential to keep an eye on house prices and property trends to make an informed decision about where you invest and what type of property you purchase.
Navigating the 2023 Newcastle Property Market
Newcastle’s 2023 property market is dynamic and everchanging, with constantly evolving real estate trends. The rises and falls in property prices and rental demand are dependent mainly on population, economic growth, and post-pandemic motivations, but it can be hard to tell why they fluctuate the way they do. This makes the Newcastle property market complex, hard to predict, and challenging to navigate. That’s where Wise Buy Group can help. Our expert team of mortgage brokers can get you access to the most competitive loan rates in Newcastle, helping you find the best property in this NSW region. We are Newcastle locals who understand the region’s unique dynamics, so we can help you make the best decisions in the 2023 market. Contact us today for help navigating the 2023 Newcastle house prices and property trends.