Following on from Part 1, where we explored the history of the local property market and economy, and the key decisions and actions that helped Newcastle grow into the city we have today, we sat down again with our CEO and founder, Mark Kentwell, to look to the future.
So Mark, at-a-glance, what is the outlook for Newcastle?
We are an expanding economy with lots of jobs across various sectors. This is one of the fundamental drivers that helps Newcastle. Unlike a typical mining town, where a boom might stop suddenly, we have eight sectors of employment that make up over 75% of our wages.
This means that even if one sector dips, the others help stabilise the region. It’s part of the reason I think we did so well during COVID.
Anyone who hasn’t been to Newcastle in the past five years would see a completely different city now.
Properties are still affordable, and we offer an enviable lifestyle, but we have great yields and growth. We have a very stable property market.
People have jobs around them, they’ve got a great lifestyle around them, they’ve got a lower cost of living around them and they’ve got access to a property market, that if you buy any time in the next 25 years, should deliver a profit.
For those who already bought, if you’ve held your property for five years or more, in most reasonable locations, which is most of Newcastle, you’d be ahead.
People have choices, and overall, the outlook is really positive.
How will new projects help us build on that positive outlook?
Like most cities in Australia, when it comes to properties, to homes, Newcastle is currently undersupplied, which again, like the rest of the country, is contributing to rising property prices.
Projects are the lifeblood of our region because they build the very things people need — shelter. They are increasing supply and slowly, they will help us start to better meet demand.
We have a lot of zoned and approved land, and fewer obstacles to development, so we have a big opportunity ahead.
As far as projects go, people looking at off-the-plan purchases are generally optimistic about the future. In 2012 or 2013, experts may have told you not to buy off the plan, yet if you had bought between 2015 and 2017, you would have seen growth of around 50% in those couple of years.
In 2018 you might have got 30-50% growth if you bought off the pan in that period of time. Even in 2018/2019, when experts predicted a 30% drop in property prices, the market actually went up by about 1%. If you had bought off the plan during that time, particularly in good locations like East End, you’d likely have seen 20-50% growth in the years since.
Personally, I’ve invested here, and those purchases have helped build my business and my ability to keep employing people.
Is there enough local opportunity in off-the-plan?
People from all around Australia have started taking notice of Newcastle, including notable buyers agents, property investors and commentators who have had successful outlooks in the past. Developers are also looking.
So now, if purchasers believe tomorrow will be better than today and buy off the plan, they will likely be met with some pretty good incentives from developers, along with a greater range of choices.
When we first started in real estate, there were only one, two or three developers really doing much in terms of volume.
JML and Stronach were the two major developers in town doing the vast majority of projects. There were also a few others that would come and go, doing one project here and there.
Unfortunately, JML no longer exists, but it managed to create more then 400 apartments in its time.
Stronach has continued, with 100 years in the industry and over 1,000 apartments created.
Throughout the 1990s and 2000s, we saw many developers expand into Newcastle, including: Third.i Group, BLOC, Doma Group, GWH and Iris Capital.
They expanded into Newcastle because a lot was happening in our region, and bigger investments (public and private) were occurring.
These substantial projects added more value to our region, providing increased attention, more amenities, job opportunity, commercial spaces, new neighbourhoods and support for community aspects, all contributing to rising standards in our region.
Today, we continue to benefit from that earlier expansion with a vast range of off-the-plan opportunities available to purchasers.
What does the future look like for Newcastle and the local property market?
So, where are we now at the end of 2024? A lot has happened and a lot more needs to happen.
Believe it or not, we’re still dealing with a post-COVID hangover, where people are feeling pressure trying to get productive again.
But the answer remains the same; we need to stick to the fundamentals: more government spending than ever.
When the government spends money, private investment often follows, and that drives jobs, lifestyle, and confidence. It underpins a robust property market.
As a result of all that has been done, as well as the influx of developers, investment in infrastructure, and even COVID, Newcastle’s future is looking positive.
We have people choosing Newcastle as their main base for both business and personal life, and travelling elsewhere. We’ve seen an emergence of people moving to Newcastle since COVID, which has been exemplified by the increase in developments, more development companies working in Newcastle, and a rise in the number of builders in the region.
Businesses are increasingly choosing Newcastle as one of their substantial operational bases, particularly now we know that Newcastle will have international flight capacity and more domestic flights available.
We’ve seen a lot of change and the city continues to evolve.
We’ve been through one of the most transformative periods and now it’s a case of getting in, reaping the benefits and integrating everything together.
These pieces of infrastructure and development are essentially paving the way. These developments involve the community, businesses, developers, buyers, and bring attention to the region. They provide the ‘gel’ that brings everyone together, creating a strong, interdependent ecosystem.
Newcastle has undoubtedly been chosen as the second city of New South Wales. It really does set us up for an amazing future.
