Transformed, revamped and booming.
They are three words that now characterise the once industrial town of Newcastle in 2022.
The City of Newcastle Council has predicted the area’s population to rise by 33% by 2036, with many property owners and investors describing it as a “hidden gem” and an “economic powerhouse.”
With property prices on the rise and on the precipice of a boom, this article will outline what is driving Newcastle’s economic growth and answer the question: Should I Invest in Newcastle?
Newcastle’s property price growth has been consistently rising over the past 5 years, with it experiencing average growth in the period of 7.6% per annum. Forecasters are predicting that prices are set to grow by 7% in 2021. Vacancy rates have also reduced, with it at a low of 1.9% in 2018.
What is Driving this Growth?
Sydney’s Property Market
A lack of supply in Sydney’s property market is driving up house prices.
Similarly, its significant population boom has put a strain on infrastructure, leading to significant road traffic.
This is causing investors, prospective house buyers and those tired with the traffic and hustle and bustle of the city to look for other options, leading to significant interest in Newcastle property.
The ability to purchase 3-4 bedroom properties that are under $800,000 and within 10-15 minutes of the beach and the CBD is an attractive offer compared to the traffic and substantial mortgage or rental payments of Sydney.
Newcastle’s laid back lifestyle and lower property costs are driving investment, with many Sydneysider’s opting for change.
Newcastle’s Infrastructure Development
Newcastle is experiencing significant infrastructure development, significantly around the CBD and its Port.
This is both driving jobs and investment into Newcastle, and transforming it from its industrial city background into a cultural and entertainment hotspot.
Examples of these investments include the $9 billion being put into developing Newcastle’s Port to allow for international cruises and larger capacities for exports and imports.
Similarly, half a billion is being allocated to establish an entertainment precinct in the CBD.
Significant investment into suburban areas outside of the CBD is occurring, such as the development of the Maitland Hospital, and the significant amount of housing being built.
Development of the University of Newcastle and the Williamstown RAAF Base
Both universities and army bases can act as critical economic drivers for regional towns, as they attract large young populations, and significant knowledge and experience.
This can be used to drive engineering, medical and business investment.
The University of Newcastle has been making efforts in expanding its presence in the CBD, with it spending $95 million on its NewSpace campus.
This has driven economic activity through its substantial creation of jobs, and its employees and students both spending in the CBD.
The University of Newcastle has also announced the $25 million construction of its Honeysuckle campus in the city, which will only further boost economic activity.
The Williamstown RAAF base is another economic driver for Newcastle.
The Federal Government has announced plans to spend $12 billion on F-35A joint strike fighter jets, a squadron of which will be based at Williamstown.
This will require runway upgrades, maintenance crews, weapon loading centres and many other significant investments.
It is estimated that 8,500 jobs will be created with this expenditure, creating further economic investment the Newcastle area