NEW SOUTH WALES
STANDOUT LOCATION:
Newcastle region: While Sydney faded, Newcastle rose strongly last year, with several suburbs topping 20% growth and others rising 17%-18%. In 2018, the growth will ripple to neighbouring areas including the Lake Macquarie LGA and the key centres of the Hunter region, including Maitland, Cessnock, Singleton and Muswellbrook.
2017 reviewed
Penrith City: The suburbs of Penrith LGA outperformed the overall Sydney market where, according to CoreLogic data, the annual growth in house prices dropped to 4.4% by year’s end. Numerous Penrith suburbs rose 13%-14% in 2017, while Werrington rose 19% and North St Marys 17%.
The media have obsessed over the Sydney boom and many were talking it up after it had passed its peak. Sydney’s wind-down, charted by a steady decline in sales activity since 2016, showed up in price data in 2017, with most sources recording growth rates in single digits by year’s end.
Now commentators have switched to the downturn storyline, with dire warnings about values plummeting. But don’t expect anything dramatic. The likely scenario is the one we saw in 2004 after the 2001-03 boom. ABS data shows there was no dramatic price decline in Sydney – the annual growth rate dropped from double digit to slightly negative for 18 months, before resuming moderate growth.
Sydney has high property values but they’re underpinned by the factors that caused the rises in the first place: a strong economy, huge spending on infrastructure and population growth. The affordability factor has brought the price rises to a halt. But the fundamentals that got prices to those levels remain, so they’re unlikely to fall – much.
The exceptions will be the places building too many units. The greatest killer of markets is oversupply and some sectors look precarious, such as Parramatta and the Olympic Park precinct.
There’s more to NSW than the capital city and many regional centres are coming into good growth periods.
Several Newcastle suburbs grew their median house prices by 20%-plus in 2017 and neighbouring areas have the potential to catch a ripple effect, including the Lake Macquarie LGA, the Port Stephens area and the Hunter region.
Other centres that have already had good growth include Wollongong, the Central Coast, the Southern Highlands, Dubbo, Port Macquarie and Coffs Harbour.
Locations less advanced in the cycle and coming into growth periods include Queanbeyan, Armidale, Wagga Wagga and Tamworth.