Lower Hunter house price surge set to continue
Donna Page | 22 June 2017
SYDNEY investors are expected to continue driving the Lower Hunter’s surging property market over the next year, but the biggest price gains are behind us.
BIS Oxford Economics is predicting continued growth for the region, as the Sydney, Melbourne, Canberra and Hobart property markets weaken.
The Lower Hunter’s median house price was $560,000 at June 1, a jump of 36 per cent in the past four years.
Median house prices in the region are predicted to increase 11 per cent this financial year.
BIS’s residential property senior manager Angie Zigomanis said historic low interest rates and relative affordability made the Lower Hunter an “attractive proposition”.
“We expect to see further growth come through as the Hunter will be one of the areas that benefits most from Sydney migration and investment,” he said.
“It will continue to grow, but we are not talking about spectacular growth.”
According to BIS’s Residential Property Prospects 2017 to 2020 report issued on Wednesday, house prices are expected to cool or slip backwards in most markets in the next two years.
Relative affordability, population migration and a tightening rental market are fuelling speculation the Hunter will buck the trend.
Rental vacancy rates in the Lower Hunter dropped from 4 per cent two years ago, to 2.3 per cent in June.
Newcastle, 160 kilometres north of Sydney, has already been attracting significant interest from investors with this set to continue as buyers get priced out of the Illawarra market.
More than half of all residential sales were to investors this financial year, but home loans to investors have fallen to the lowest level in 10 months following a regulatory clampdown and the Turnbull government's efforts to cool the Sydney and Melbourne housing market.
Mr Zigomanis said tightening lending conditions for investors had put the brakes on property prices across five of Australia’s capital cities and Illawarra, which is seen as an extension of the Sydney market.
Median house prices in Illawarra jumped 58 per cent in the past four years.
“Wollongong is not as an attractive option as what is was due to affordability,” Mr Zigomanis said.
“More and more people will be looking north to Newcastle as it’s more affordable.”
Article sourced from: http://www.theherald.com.au/story/4744404/property-through-the-roof/