Newcastle to escape property price falls: BIS report
Carrie Fellner | 11 Jul 2016
NEWCASTLE’S housing market is expected to buck a national trend that will see falling house prices in most capital cities over the next three years, according to a new report.
BIS Shrapnel's Residential Property Prospects 2016 to 2019 report, released on Monday, has predicted house prices will grow six per cent in Newcastle over the three years to June 2019.
BIS senior manager Angie Zigomanis said economic challenges facing the city, including the mining downturn, meant price growth would not be “spectacular”.
However he said Newcastle would be largely insulated from the price drops affecting the capital cities, including Sydney, where prices are expected to drop one per cent over the next three years.
"People are increasingly leaving Sydney for affordability and heading up north," he said. "That will help drive demand."
Mr Zigomanis said other economic factors such as investment in the city centre and low unemployment rates had the potential to bring about a better-than-forecast result in Newcastle.
"The light rail, things like that. But at the moment we think it will chug along," he said.
Weak median house price growth of one per cent in Newcastle in 2015/16 was put down to declining resource sector investment.
The report found all states except New South Wales will move into oversupply or face growing oversupply and forecast the biggest price falls in Adelaide and Darwin, both tipped to see a two per cent drop in property prices over three years.
The best capital city prospects were considered to be the Brisbane and Hobart markets.
The slowdown has been attributed to an oversupply of new homes, weaker investor demand due to the tightening of regulatory guidelines and lower population growth.