Australia is in the midst of a regional property boom, and the Newcastle and Lake Macquarie region is one of the NSW’s biggest winners.
Australia’s regional property boom
The property market here in Newcastle and Lake Macquarie had an excellent year in 2020, and recent data from CoreLogic shows that our good news story was replicated across Australia’s regional areas.
Data shows that the combined Australian regional property markets increased 6.9% over the twelve months to December, a growth rate more than three times that of the combined capital cities markets. This certainly tallies with our experience of a strong year of sales here in Newcastle and Lake Macquarie in 2020.
But it wasn’t just a case of one good year. Some areas, particularly throughout Australia’s eastern seaboard, are showing positive long term returns. When you look at the 10 year annualised growth rates (which is the average compounding growth rate over the past 10 years), some regional centres have performed just as well, if not better than, their capital city cousins.
What’s happening in our area
When you look at the 10 year annualised growth rates, you can see that large coastal dwelling markets in NSW, like Newcastle and Lake Macquarie, are closer to the performance of capital city sub-markets than they are to the rest of regional Australia.
Here in the Newcastle and Lake Macquarie region, the 10 year annualised growth rate was 4.5%. This compares to an average of 5.1% across the Sydney sub-markets, 5.0% across Illawarra, 4.5% across the Southern Highlands and Shoalhaven region and an average of just 2.1% across the rest of regional NSW.
This is great news for property owners in Newcastle and Lake Macquarie. It shows that when it comes to Australia’s property market, the best long term returns don’t always come from the capital cities. With strong predictions for the housing market in 2021, the value of the regional property may well continue to rise.
What’s driving the price increases?
How do we account for the rise in property values in major coastal markets, including our own, over the past decade?
Population growth is one factor that drives up property prices, and people priced out of the market and seeking a better lifestyle have been leaving capital cities in favour of regional Australia for years. For example, Newcastle experienced 4.6% population growth between the 2011 and 2016 censuses, whilst Lake Macquarie saw a 4.4% increase in population over the same period. ABS data shows that COVID exacerbated that trend, with Australian capital cities experiencing a net loss of 11,200 people during July, August and September last year, the greatest quarterly net loss since records began in 2001.
When people move out of the capital cities, they still like to remain in striking distance. You’ll notice that the three regional NSW areas that performed the most strongly over the last decade – the Newcastle and Lake Macquarie region, the Southern Highlands Shoalhaven region and the Illawarra – are all within ‘commutable’ distance of Sydney. The better lifestyle promised by coastal regional areas together with the ease of access to Sydney’s amenities is a winning combination and helps explain why Newcastle and Lake Macquarie properties have seen an increase in value.
Of course, not all property buyers in Newcastle and Lake Macquarie are migrants from the capital cities. Local buyers, who already know and love the area, make up the bulk of our market. Locals looking for their next home or investment property are vying for properties with the out-of-towners, which keeps competition – and prices – rising.
2021 is looking good
We’re really looking forward to 2021. We expect consumer confidence will continue to rise, and local property prices along with it. Given the positive long term trend of the past decade and the excellent performance of the last twelve months, we’re expecting a strong year for our local property market here in Newcastle and Lake Macquarie.
If you’re thinking of buying or selling in the Newcastle Lake Macquarie region, get in touch with our expert team today.