Demand for housing in mining towns Wollongong and Newcastle sliding: HTW

Demand for housing in the key regional NSW markets of Wollongong and Newcastle appears to be slowing according to anecdotal reports from valuers at Herron Todd White.

Director of valuations Newcastle Leigh Mather disputes figures published in local papers claiming that prices are up 40% for the year to March.

Mather says HTW statistics show that while prices have risen marginally over the past six months, “sales numbers fell off the edge of the earth”.

“In the six months to March sales numbers halved for both houses and vacant land in Lake Macquarie, Port Stephens, Newcastle, Maitland and Cessnock.

“This is one example of statistics being out of step with actual reality. In our opinion sales numbers provide an accurate guide to the strength of the market,” Mather says. 

And while agents continue to spruik property investors, McLeish says the underlying story they are hearing is that prices have to be discounted for a house to sell. 

The median price for all sectors in the Wollongong Statistical District rose about 4% in the six months between December 2010 and June 2011, with standard dwellings rising to $449,000, according to local research group Iris.

Jon Butler from HTW Wollongong says despite this increase agents are reporting a general slowdown across the Wollongong market

“This is either due to a lack of demand from buyers, a lack of stock, or properties remaining longer on the market,” he says.

While sale prices remain healthy compared with 2008-09, Butler says properties appear to be remaining on the market longer, with “price reduction” wording being included in advertising material on properties listed above realistic market expectations.

According to Butler, the best-performing sector appears to be north of the CBD for standard dwellings, particularly around Balgownie, Towradgi, Woonona, Bulli and Thirroul.

“They offer good public transport links, proximity to the beach, many with ocean views,” he says.

Signs of a slowing market are being witnessed in south Wollongong.

“With more land planned for the West Dapto region, there could be an oversupply of land in the medium term if not released in a timely manner,” Butler says.