MARKET OUTLOOK NEWCASTLE - SKY Residences
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MARKET
OUTLOOK
NEWCASTLE
Newcastle is one of Australia’s leading regional cities,
undergoing revitalisation with numerous infrastructure
projects and an emerging population of young professionals.
02
Location
& Accessibility
04
Demographics
05
Infrastructure,
Employment
& Education
06
Residential
Market
07
Rental
Market
Prepared exclusively for
GWH Build
May 2018 Top: Newcastle foreshore; Bottom left: Civic Theatre; Bottom right: University of Newcastle
LOCATION
& ACCESSIBILITY
Newcastle is located on the east coast of Australia,
approximately 120km north of Sydney. Newcastle
CBD is the capital of Australia’s leading regional
economy; the Hunter Region.
TRANSPORTATION
The NSW Government and The City of Newcastle are
investing in transport infrastructure as part of the
Newcastle Revitalisation Program. The Newcastle
Transport Interchange at Wickham will create easy
transfers between trains, buses, light rail and taxi
services. The Newcastle Light Rail will connect 19 For
residents from their doorstep to key activity precincts
along Hunter and Scott Street.
20 Foreshore Park
Newcastle Airport opened a new $15m terminal in 22 Nobby's Head
2015. In 2017, Newcastle Airport also completed a $1.9
21 Nobby's Beach
million project for the fit out of international arrivals
and departures facilities. The Airport is currently in
2 Newcastle
negations to run international flights.
HEALTH
Residents of the Newcastle CBD have the convenience
of the Lingard Private Hospital which provides acute
medical facilities, located less than three kilometres
away. The Calvary Mater Hospital in Waratah has
approximately 200 beds. While, John Hunter Hospital
6 Honeysuckle Precinct
has 550 beds and services the Greater Newcastle
region.
RETAIL
There is an array of retail amenity in the Newcastle CBD
including Marketown Shopping Centre which hosts over
50 retailers including; a 24 hour Coles Supermarket,
Woolworths, Big W and Dan Murphy’s, located only
400m from Sky Residences. The Hunter Street Mall is
also undergoing redevelopment where stage one will
include over 3,600 square metres of premium retail
space.
PARKS, BEACHES AND RECREATION
There are several major parks within the Newcastle
CBD including Civic Park and King Edward Park. Hunter
Development Corporation has secured funding and is in
the process of planning major waterfront public domain
works in Honeysuckle from Worth Place to Fig Tree
Park. This is to include sports & recreational areas,
waterfront promenade, playground, seating & shade
and event spaces.
The Newcastle Light Rail will be able to easily deliver
CBD residents from their doorstep to Nobby’s and
Newcastle Beach. Newcastle also has an array of
scenic walking paths such as the Anzac Memorial Walk,
Bather’s Way and the Breakwater on Nobby’s.
2 Market Outlook Newcastle
The Newcastle CBD provides residents with access to amenity
from public transport, health facilities, education, retail, parks,
beaches and recreation.
17 Newcastle Beach
14 Newcastle Grammar School
rt Scratchley 15 Newcastle East Public School
8 Civic Theatre
16 Civic Park
18 Oceans Baths
13 Nihon University Proposed Campus
7 Hunter Street Mall
11 University of Newcastle, City Campus
e Wharf
10 Darby Street Cafes
9 Newcastle Art Gallery
2 Civic Light Rail Stop
12 University of Newcastle, Proposed Honeysuckle Campus
5 Marketown Shopping Centre
1 Honeysuckle Light Rail Stop
HU
NT
ER
ST
RE
ET
4 Newcastle Transport Interchange
Prepared exclusively for GWH Build 3
Strong income growth and population
growth among young professionals are
DEMOGRAPHICS key drivers of demand for residential
dwellings in Newcastle CBD.
For the purpose of this profile, the Newcastle CBD
Study Area has been defined as the suburbs of
WHO LIVES IN THE NEWCASTLE CBD?
Newcastle NSW
Newcastle, The Hill, Cook Hill and Newcastle West. CBD (2016)
POPULATION Average Age 39 38
The population of the Newcastle CBD has experienced Aged 25-39 32% 21%
steady growth at an average of 1.3% per annum
from 2011 to 2016. The population of the Newcastle White Collar Professionals 84% 72%
CBD is projected to grow from approximately 9,600
Managers and Professionals 54% 38%
residents in 2016 to around 15,300 in 2031. This growth
translates to an average of 3.2% per annum over the Couples without Children 28% 26%
15-year period.
Group Households 12% 4%
DEMOGRAPHICS Lone Person Households 41% 24%
The resident profile of the Newcastle CBD is
characterised by young people; mainly professionals,
Average Household Income $100,098 $95,466
students and couples without children. The Newcastle Household Income
Above $130,000 27% 26%
CBD has a larger proportion of residents aged between
24 and 39 years old at 32% compared to 21% of Average Household Size 1.9 2.7
residents in the NSW average. Prepared by Urbis; Source: ABS Census 2016
There is a large proportion of Newcastle CBD residents
who are employed in white collar positions at 84% POPULATION FORECAST
compared to the state average of 72%. While 11% of Newcastle CBD
residents in the Newcastle CBD are undertaking tertiary Newcastle CBD Population
18,000 Newcastle CBD Annual Growth Rate 10%
studies compared to 6% of the resident population
16,000 15,300 9%
across the NSW average. 13,300 8%
14,000
Population (No.)
The strong income growth of the Newcastle CBD study 12,000
11,900 7%
area is attributed to the growing population of young and 10,000 9,000 9,600 6%
educated professionals. The average household income 8,000
4.4% 5%
4%
in the Newcastle CBD in 2016 was $100,098, higher 6,000 2.7% 3%
than the state average of $95,466 per household. 4,000 2%
2,000 2.4% 1%
The younger demographic is drawn to the convenient 0 1.3% 0%
access to employment, public transport, health 2011 2016 2021 2026 2031
facilities, educational institutions, entertainment Prepared by Urbis; Source: ABS Census, SAFi
precincts and local beaches that Newcastle has to offer,
compared to other areas in the Hunter region.
AVERAGE HOUSEHOLD INCOME
Newcastle CBD
Newcastle CBD
NSW $100,098
$87,546
$69,559
THE POPULATION
IN NEWCASTLE $84,218
$95,466
$65,015
CBD IS PROJECTED
TO GROW TO
AROUND 15,300 2006 2011 2016
IN 2031. Prepared by Urbis; Source: ABS Census 2016
4 Market Outlook Newcastle
INFRASTRUCTURE,
Newcastle CBD
is undergoing
revitalisation with over
EMPLOYMENT & EDUCATION $1 billion worth of key
infrastructure projects.
INFRASTRUCTURE EDUCATION
The NSW Government has invested The education industry is set to become a major economic driver in Newcastle.
$650 million in the Revitalising In the latest Census, approximately 11% of residents were undertaking tertiary
Newcastle Program which is aimed studies, well above the state average of 6%.
at activating the city to attract
The University of Newcastle (UoN) opened NeW Space on Hunter Street in
tourists, students, researchers
July 2017. NeW Space houses the business & law faculties of UoN with an
and entrepreneurs. The program
enrolment level of around 3,000 students.
encompasses key infrastructure
projects such as: UoN also recently acquired two hectares in the Honeysuckle Precinct, in order
to further expand the University’s City Campus. UoN has recently released
01 NEWCASTLE INTERCHANGE its master plan which include seven multi-storey buildings. Stage one is to be
$200 million; 2019 Completion completed by 2020 and will consist of an Innovation Hub and facilities for the
The Newcastle Interchange at School of Creative Industries. The Innovation Hub is a joint funding initiative
Wickham will centralise trains, with the NSW Government & Newcastle City Council.
buses, light rail, taxis and kiss and Residents in Sky can walk to the NeW Space which is 280 metres away and to
ride facilities. Commuting will the Honeysuckle Campus which will be 120 metres away.
become easier with convenient
transfers between transport modes. Japan’s Nihon University purchased the former Newcastle Court House in
2017 with plans to open its first campus in Australia. The site will provide
02 NEWCASTLE LIGHT RAIL education facilities for 200 students.
PROJECT
$310 million; 2019 Completion
The Newcastle Light Rail will
EMPLOYMENT
stretch 2.7 kilometres from the Newcastle CBD is a corporate hub for the Hunter region with major
Transport Interchange at Wickham, headquarters for the Hunter Development Corporation, NSW Fair Trading
along Hunter Street to Pacific Park. Office, NIB and GHD Engineering.
Once operational, the high frequency For the purpose of employment forecasting, Newcastle CBD has been defined
services will run every seven and by the Newcastle – Cooks Hill SA2. By 2031, Newcastle CBD is projected to
a half minutes during peak. The grow by approximately 6,910 new positions, accounting for 29% of the total
Newcastle Light Rail network is Newcastle LGA projected job growth of 23,600 positions.
projected to become a catalyst for
expansions to inner suburbs and EMPLOYMENT GROWTH IN THE EMPLOYMENT GROWTH IN THE
major facilities in the future. NEWCASTLE CBD BY INDUSTRY NEWCASTLE CBD BY INDUSTRY
New jobs by 2031
03 NEWCASTLE CRUISE SHIP New Jobs
TERMINAL Top Industries by 2031
$12.7 million; 2018 Completion
Professional, Scientific + 23,600
A new 3,000 sq.m terminal building, and Technical Services + 1,220 + 6,910
car park and improved accessibility
will increase the appeal of Public Administration
Newcastle as an international cruise and Safety + 970
Newcastle CBD Newcastle LGA
destination and boost tourism into
Financial and Prepared by Urbis; Source: BTS 2016
the area. Insurance Services + 610
04 HUNTER STREET MALL RESIDENTS UNDERTAKING
Health Care and
REDEVELOPMENT + 450 TERTIARY STUDIES
Social Assistance
$750 million; 2020 Completion (Stage
One) Education and
The redevelopment of the Hunter Training + 440
Newcastle CBD (2016)
Street Mall will consist of boutique
Other 11%
apartments, premium retail and industries + 3,220
commercial space as well as a NSW
landscaped piazza. Newcastle 6%
CBD Total + 6,910
Prepared by Urbis; Source: BTS 2016 Prepared by Urbis; Source: BTS 2016
Prepared exclusively for GWH Build 5APARTMENT The relative affordability of Newcastle
CBD and projected growth in residential
MARKET development has resulted in growing
demand for apartments.
Prices in the Newcastle apartment market have ONE BEDROOM APARTMENTS
risen over the past 20 years, with high price growth Newcastle CBD
recorded over the past five years. This sudden growth 80 Number of Transactions $453,750 $500,000
reflects the improved amenity and economy in 70 Median Price $450,000
Number of Transactions
Median Sale Price ($)
Newcastle. $400,000
60
$350,000
The boom in Sydney housing prices has also pushed 50 $300,000
demand to nearby regional cities such as Newcastle where 40 $250,000
30 $200,000
approximately 10% of residents in Newcastle CBD have $150,000
20
moved from Metropolitan Sydney over the last five years. $100,000
10 $50,000
For the purpose of this analysis, the Newcastle CBD Study 0 0
Area has been defined by the suburb of Newcastle (2300).
1997
1998
1999
2000
2001
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
According to CoreLogic RP Data, the following trends can
be seen: Prepared by Urbis; Source: CoreLogic RP Data
Please note a sample size of 500 apartment sales over 20 years
▪▪ The limited availability of land in Newcastle CBD has created
strong growth opportunities for apartments.
TWO BEDROOM APARTMENTS
▪▪ Interest in one bedroom apartments has gained traction Newcastle CBD
over the past 10 years with the growing student population
100 Number of Transactions $800,000
(11% of residents) and couples without children (28% of Median Price $702,500
90 $700,000
households) living in the Newcastle CBD.
Number of Transactions
Median Sale Price ($)
80
$600,000
▪▪ In 2017, the median price for a one bedroom apartment in 70
Newcastle CBD rose to $453,750, reflecting an average 60 $500,000
price growth of 8.1% per annum over the past five years. 50 $400,000
40 $300,000
▪▪ Two bedroom apartments Newcastle CBD have remained 30
a popular product type and as such, have experienced an 20
$200,000
upward trend in the median price. This product type appeals 10 $100,000
to first home buyers, investors and downsizers. 0 $0
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
▪▪ The median price for a two bedroom apartment in Newcastle
CBD increased to $702,500 in 2017, reflecting an average
price growth of 8.6% per annum over the past five years. Prepared by Urbis; Source: CoreLogic RP Data
Please note a sample size of 1,200 apartment sales over 20 years
According to sales from May 2017 to April 2018 compiled
by realestate.com, the median price for one, two and NEW APARTMENT SUPPLY
three bedroom apartments is listed below: According to data from Cordell Connect, as of May
2018 there are an estimated 1,340 proposed new
apartments in the Newcastle CBD over the next five
MEDIAN APARTMENT PRICES
years. Approximately 370 dwellings (28%) of proposed
Type Median Apartment Price apartments are in the construction phase and around
770 dwellings (58%) of the proposed apartments have
One Bedroom $470,000
development approval. The chart below shows the
Two Bedroom $730,000 indicative supply that may enter the Newcastle CBD
apartment market over the next five years.
Three Bedroom $1,460,000
PROPOSED APARTMENT PIPELINE
Prepared by Urbis; Source: Realestate.com Newcastle CBD
Note: Bases on sales between 1 May 2017 to 30 April 2018 Number of proposed apartments
565
NEWCASTLE CBD APARTMENT SALES PRICE
GROWTH PER ANNUM 375
Type 1 year 5 year 10 year 195
155
One Bedroom 12.7% 8.1% 3.6% 50
0
Two Bedroom 15.2% 8.6% 3.1%
2018 2019 2020 2021 2022 2023
Prepared by Urbis; Source: CoreLogic RP Data Prepared by Urbis; Source: Cordell Connect
6 Market Outlook NewcastleRENTAL Newcastle CBD has a high proportion
MARKET of households renting, 57% as at the
2016 census.
RENTING HOUSEHOLDS PROPORTION OF RENTING HOUSEHOLDS
Newcastle CBD has an established and growing rental
2016
market with 57% of households renting their homes as at
2011
2016, increasing from 55% in 2011.
The share of renting households in Newcastle CBD 57%
greatly exceeds those across the NSW average (33%)
and the Sydney Metropolitan average (36%) in 2016.
36% 33%
The rapidly increasing student population located in the
Newcastle CBD should further influence the size of the
rental market. 55%
32% 31%
RENTAL PREMIUM FOR NEW APARTMENTS
The Newcastle CBD study area of Newcastle, Cooks
Hill and The Hill has been used for the rental premium Newcastle CBD Metro Sydney NSW
analysis.
Prepared by Urbis; Source: ABS Census 2016
Data according to Realestate.com in May 2018 shows
Note: References to the Sydney Metropolitan area are based on the Greater
the substantial premium for new one and two bedroom Capital City Statistical Area (GCCSA) boundaries for Sydney.
rental apartments in Newcastle CBD. New apartments
in Newcastle CBD with one bedroom achieve a premium
of 26% and two bedroom apartments achieve a 27%
VACANCY RATE – 2300 POSTCODE
premium relative to existing stock. March 2018
As at May 2018, the median rent for new one bedroom
apartments in Newcastle CBD is $440 per week.
Similarly for new two bedroom apartments, the median
rent is $545 per week.
VACANCY RATES
Due to data restrictions, the postcode 2300 has been
2.3%
used as a proxy for the Newcastle CBD catchment rental
market.
Prepared by Urbis; Source: SQM Research
Vacancy data indicates that residential rental properties
in the 2300 postcode are experiencing a low rate of
vacancy, 2.3% as at March 2018. The high proportion of
households renting combined with a low vacancy rate,
reinforces the continuing demand for rental properties in
Newcastle CBD.
NEWCASTLE CBD
HAS A GROWING
RENTAL MARKET
WITH 57% OF
HOUSEHOLDS
RENTING THEIR
HOMES AS AT 2016.
Prepared exclusively for GWH Build 7AUSTRALIA INTERNATIONAL
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This report is dated 5 June 2018 and incorporates information and events up to that date only and excludes any information arising, or event occurring, after that date which may affect
the validity of Urbis Pty Ltd’s (Urbis) opinion in this report. Urbis prepared this report on the instructions, and for the benefit only, of GWH Build (Instructing Party) for the purpose of
Newcastle Market Outlook (Purpose) and not for any other purpose or use. To the extent permitted by applicable law, Urbis expressly disclaims all liability, whether direct or indirect, to
the Instructing Party which relies or purports to rely on this report for any purpose other than the Purpose, and to any other person which relies or purports to rely on this report for any
purpose whatsoever (including the Purpose). In preparing this report, Urbis was required to make judgements which may be affected by unforeseen future events, the likelihood and
effects of which are not capable of precise assessment. All surveys, forecasts, projections and recommendations contained in or associated with this report are made in good faith and
on the basis of information supplied to Urbis at the date of this report, and upon which Urbis relied. Achievement of the projections and budgets set out in this report will depend, among
other things, on the actions of others over which Urbis has no control. In preparing this report, Urbis may rely on or refer to documents in a language other than English, which Urbis may
arrange to be translated. Urbis is not responsible for the accuracy or completeness of such translations and disclaims any liability for any statement or opinion made in this report being
inaccurate or incomplete arising from such translations. Whilst Urbis has made all reasonable inquiries it believes necessary in preparing this report, it is not responsible for determining
the completeness or accuracy of information provided to it. Urbis (including its officers and personnel) is not liable for any errors or omissions, including in information provided by the
Instructing Party or another person or upon which Urbis relies, provided that such errors or omissions are not made by Urbis recklessly or in bad faith. This report has been prepared with
due care and diligence by Urbis and the statements and opinions given by Urbis in this report are given in good faith and in the reasonable belief that they are correct and not misleading,
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