HOUSE UNIT

House Sales

OVERVIEW

YEAR HALF YEARCHANGE FROM LAST

House Median Price

House Rental Price

Unit Sales

Unit Median Price

Unit Rental Price

FUTURE DEVELOPMENTS

MARKET CONDITIONS

HOUSE UNIT

These projects will stimulate economic growth and create new employment opportunities in Newcastle*, which should have a positive spill-over impact on the real estate market.

Newcastle* is set to see approximately $175.7M worth of new projects commencing in the 1st half of 2020.

Newcast le Market Update1s t Ha l f 2020

A main commercial project over the 1st half 2020 period is the $41.2M Nihon University Campus, which will see the conversion of the old Law Courts buildings plus new work including 108 beds of student accommodation. The $18.8M Merewether Street Mixed-Use Development will create 48 units, which is important to ensure future demand is catered for.

RENTAL MEDIAN PRICEQ1 2020

SALES AVERAGE DAYS ON MARKETQ1 2020

SALES MEDIAN PRICEQ1 2020

In Q1 2020, Newcastle* recorded a median house price of $750,000, and a median unit price of $572,500. This represents annual (Q1 2019 – Q1 2020) median price growth of 2.0% for houses and of 9.4% for units. Between Q1 2019 – Q1 2020 house sales slowed slightly by -2.3% to 127 sales, while units increased by 6.5% to 82 sales. With property values increasing despite mixed levels of market activity (i.e sales), Newcastle* proves to be a resilient market with continuing capital growth. Now is the time to enter the market.

*Newcastle market data and key indicators encapsulates aggregate property market conditions within the suburbs Adamstown, Cooks Hill, Mayfield, Merewether, New Lambton and Newcastle.**Estimated values are based on construction value provided by the relevant data authority and does not reflect commercial and/or re-sale value.Source: APM Pricefinder, Cordell Connect database. © Copyright PRD 2020.

RENTAL AVERAGE DAYS ON MARKETQ1 2020

61 62$750K $573K

$498 $45020 18

166 Units/ Apartments

4Townhouses

15

Dwellings

Commercial$70.0M

Residential$7.8M

Mixed-Use Projects$49.0M

Infrastructure$49.0M

AVERAGE VENDOR DISCOUNT* KEY COMMENTS

MARKET COMPARISON

PRICE BREAKDOWN

Average vendor discount reflects the average percentage difference between the first list price and final sold price. A lower percentage difference (closer to 0.0%) suggests that buyers are willing to purchase close to the first asking price of a property.

UNITS SOLDHOUSES SOLD

Average vendor discounts between Q1 2019 and Q1 2020 have tightened for both property types, to -1.4% for houses and -3.3% for units. Market conditions in Newcastle* is attractive to both buyers and sellers; as sellers are able to achieve final sale prices closer to the first list price, and buyers are still able to benefit from a discount. Now is the time to transact in the market.

The suburb of Newcastle has historically performed well above the wider Newcastle Local Government Area (LGA) in both house and unit median prices. This continues to be the case in 2020#.

The dominant proportion of homes sold in Newcastle* across 2019^ were equally split – between premium pricing of above $900,000 (29.5%), and the most affordable of below $600,000 (29.4%). This suggests that the Newcastle* market is accessible to buyers with a range of budgets.

*Newcastle market data encapsulates aggregate property market conditions within the suburbs Adamstown, Cooks Hill, Mayfield, Merewether, New Lambton and Newcastle.#2020 encapsulates sales transactions for Q1 2020 (between 01/01/2020 to 31/03/2020) only.^2019 encapsulates sales transactions between 01/01/2019 to 31/12/2019.Source: APM Pricefinder. © Copyright PRD 2020.

2019^

The market comparison graph provides a comparative trend for the median price of houses and units over the past 5 years.The main LGA profiled was chosen based on their proximity to the main suburb analysed, which is Newcastle.

-4.0

%

-4.7

%

-5.7

%

-2.4

%

-3.2

% -1.4

%

-5.6

%

-3.8

%

-4.3

%

-3.7

%

-3.5

%

-3.3

%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020

Cha

nge

from

Lis

ting

to S

ale

Pric

e

House Unit

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

2016 2017 2018 2019 2020#

Newcastle House Newcastle LGA House Newcastle Unit Newcastle LGA Unit

29.4%

15.6%15.4%

10.1%

29.5%Less than $599,999

$600,000 to $699,999

$700,000 to $799,999

$800,000 to $899,999

$900,000 and above

18.0%

19.9%

18.0%

15.6%

28.4% Less than $399,999

$400,000 to $499,999

$500,000 to $599,999

$600,000 to $699,999

$700,000 and above

RENTAL GROWTH

RENTAL VACANCY RATES

RENTAL YIELD

Newcastle

Over the past 12 months, house rental yields in Newcastle remained steady at 3.4% in December 2019. This is on par with Newcastle LGA (3.5%) and much higher than Sydney Metro (2.7%). This suggests the house rental market is in a healthy position, as does the 3.1% increase in demand for rental properties in the 12 months to Q1 2020.

2 bedroom houses have provided investors with +1.2% rental growth annually, achieving a median rent of $415 per week.

Newcastle recorded a low vacancy rate of just 1.4% in December 2019, which is representative of a declining trend over the past 24 months. Further, Newcastle’s vacancy rate is significantly below the Real Estate Institute of Australia’s healthy benchmark of 3.0% and Sydney Metro’s 3.6% average. There is a healthy rental demand in Newcastle, which is good news for those looking to invest outside of Sydney Metro.

*Rental performance graph represents aggregate house median rent prices within the suburbs Adamstown, Cooks Hill, Mayfield, Merewether, New Lambton and Newcastle. Annual rental growth is a comparison between 2018 and 2019 house median rent figures.^Rental yields shown are as reported at December 2019.Source: APM Pricefinder, SQM Research. © Copyright PRD 2020.

4.2%

Newcastle LGA

4.2%

SydneyMetro

3.6%2.7%

Newcastle Newcastle LGA

SydneyMetro

3.5%3.4%

2019^

2019

2019*

2 Bedrooms

-1.0% -4.6%3 Bedrooms 4+ Bedrooms

+1.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Dec-16

Mar-17

Jun-17

Sep-17

Dec-17

Mar-18

Jun-18

Sep-18

Dec-18

Mar-19

Jun-19

Sep-19

Dec-19

Newcastle Newcastle LGA Sydney Metro

L o c a t i o n P r o j e c t * * T yp e E s t i m a t e d V a l u e * * *

C o m m e n ce D a t e * * * *

1 Nihon University Newcastle Campus (Former Newcastle Law Courts) Commercial $41,237,000 14/03/2020

2 Shopping Centre Mayfield Commercial $17,176,000 15/01/2020

3 University Of Newcastle Honeysuckle Campus Site Preparation Works Commercial $6,605,000 07/06/2020

4 United Service Station Mayfield Commercial $3,000,000 06/04/2020

5 University Of Newcastle Honeysuckle City Campus Commercial $1,947,000 13/06/2020

6 University Of Newcastle Honeysuckle Campus Stage 1a - School Of Creative Industries Infrastructure $23,350,000 03/06/2020

7 City Road Intersection Upgrade Infrastructure $12,000,000 18/05/2020

8 Honeysuckle Drive Roadworks & Bridgeworks Infrastructure $10,666,000 09/03/2020

9 JCPR Newcastle Infrastructure $1,750,000 06/02/2020

10 Newcastle Fire Station Infrastructure $1,200,000 23/05/2020

11 Merewether Street Mixed Use Development (48 Units) Mixed-use $18,760,000 04/05/2020

12 Brunker Road Mixed Use Development (47 Apartments) Mixed-use $12,109,000 16/03/2020

13 Eve Garden Apartments (36 Units) Mixed-use $9,935,000 26/04/2020

14 Alma Road Mixed Use Development (17 Units) Mixed-use $5,226,000 07/02/2020

15 Teralba & Brunker Roads Mixed Use Building (11 Apartments) Mixed-use $2,946,000 30/05/2020

16 Evescourt Road Dwellings – Maison (5 Dwellings) Residential $2,196,000 13/04/2020

17 Bailey Street Units (7 Units) Residential $1,911,000 10/05/2020

18 Patrick Street Dwellings (3 Dwellings) Residential $1,395,000 15/01/2020

19 Robert Street Dwellings (7 Dwellings) Residential $1,173,000 23/01/2020

20 Victoria Street Townhouses (4 Townhouses) Residential $1,102,000 09/06/2020

PROJECT DEVELOPMENT MAP 1ST HALF 2020*

*Disclaimer: Project development map showcases a sample of upcoming projects only, due to accuracy of addresses provided by the data provider for geocoding purposes. **Projects refers to the top developments within the suburbs Adamstown, Cooks Hill, Mayfield, Merewether, New Lambton and Newcastle. ***Estimated value is the value of construction costs provided by relevant data authority, it does not reflect the project’s sale/commercial value. ****Commencement date quoted for each project is an approximate only, as provided by the relevant data authority, PRD does not hold any liability to the exact date. Source: Cordell Connect Database, ESRI ArcGIS. © Copyright PRD 2020.

Commercial

Residential

IndustrialInfrastructure

LEGEND

Mixed-Use

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OUR KNOWLEDGEAccess to accurate and objective research is the foundation of all good property decisions.

OUR SERVICES INCLUDE• Advisory and consultancy

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• Primary qualitative and quantitative research

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Mark KentwellManaging DirectorE mark@prdnewcastle.com.au

PRD Newcastle & Lake MacquarieP +61 2 4926 0600

NewcastleNew LambtonWarner’s Bay

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PRD.com.au/newcastle

PRD does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. PRDnationwide will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. Prepared by PRD Research © All medians and volumes are calculated by PRD Research. Use with written permission only. All other responsibilities disclaimed. © Copyright PRD 2020.