Newcastle and Wollongong residential markets performing well: BIS Oxford Economics

The upturns in Newcastle and Wollongong lagged the Sydney market and prices have also held up better through the Sydney market downturn, according to the latest BIS Oxford Economics Residential Property Prospects 2019 to 2022 report. 

The report suggests the upturns have been partly supported by stamp duty exemptions being offered for first home buyers on purchases under $700,000.

Being closer to Sydney, the price falls will reduce trade-down activity into Wollongong.

Associate Director and report author, Mr Angie Zigomanis said, “Wollongong is closer to Sydney and prices have moved more in tandem as people in Wollongong have the ability to commute to Sydney."

"Newcastle is further away and the property market is more reliant on the local economy, which was hampered during the Sydney upturn by a fall in coal investment."

"It therefore didn’t have the upturn of Sydney and so has not really had much of a correction."

"It also means that there is more upside to prices because it is now more affordable relative to Sydney and therefore attractive for people to move north as the local economy improves, and it is also starting from a lower base," he stated.

The firm said the Wollongong median house price is forecast to rise by 5% in the three years to June 2022.

In comparison, greater affordability in Newcastle is likely to provide more upside, with an aggregate 9% rise forecast.

After an estimated 18% decline in the median house price in Sydney in the two years to June 2019, house price growth is expected to stabilise through 2019/20 as affordability improves and credit conditions ease.

A total rise of 6% is forecast for Sydney’s median house price in the three years to June 2022.