Gosford, Newcastle and Port Macquarie among NSW's top emerging regional markets
The emergence of markets in regional New South Wales ranks among the most noteworthy features of Australian real estate in 2014.
Partly for local reasons and partly through the ripple effect from Sydney’s buoyant market, there are growing numbers of regional NSW cities and towns with growth property markets.
This started earlier in the year in locations close to Sydney, including Gosford, Newcastle, the Blue Mountains and Wollongong.
The research conducted for the latest edition of The Price Predictor Index, which charts sales activity for every suburb and town across Australia, shows that more distant markets are now stirring to life. They include Tamworth, Port Macquarie, Albury, Orange and Dubbo.
Some are locations which have been dismal performers on capital growth over the past 10 years, but are now recording significant upturns in market activity, with prices starting to follow. Port Macquarie and Gosford are examples.
One of the strongest pockets of regional NSW growth is the Central Coast area focused on the Gosford and Wyong LGAs. They were among the first to rise and they continue to be strong precincts.
16 of the suburbs in the Gosford LGA are ranked markets - rated in the index as either ‘rising fast’, ‘rising steadily’ or ‘consistency’ markets. As one example, sales in East Gosford have risen from 29 to 36 to 55 in consecutive quarters this year.
The Wyong LGA has 15 ranked suburbs, including eight rated as ‘rising steadily’ and seven as ‘consistency’ markets.
The wider Newcastle area continues to deliver growth markets and others marked by admirable consistency. The LGAs of Newcastle, Lake Macquarie and Port Stephens all have ranked suburbs, including 11 in the Newcastle municipality.
There are also glimmers of life in some of the nearby Hunter Valley areas, which have been suppressed over the past two years by developer oversupply and a reduction in coal-related demand. The Maitland LGA in particular appears to be mounting a revival.
Further north, the Coffs Harbour, Port Macquarie, Ballina and Tweed municipalities all have emerging markets.
House sales in Port Macquarie have risen from 200-220 per quarter in 2012-13 to 300-plus in 2013-14. In Ballina, sales in the past six consecutive quarters have been 18, 36, 42, 45, 43 and 51 – this is the kind of pattern that delivers price growth.
The Blue Mountains area is demonstrating the resilience in the face of natural disasters which is a characteristic of Australia. Devastated by bushfires a year ago, the region has bounced back strongly. Blackheath, Katoomba and Lithgow are among the growth markets in that region.
South of Sydney, the Wollongong and Shoalhaven area have numerous strong markets.
Inland regional centres with growth prospects include Dubbo, Albury, Bathurst, Orange, Tamworth and Goulburn.
In Goulburn, near Canberra, quarterly sales have risen from 116 to 120 to 134 to 155 since late last year.
The key thing to note is that it takes time before this kind of upturn in sales activity translates into price escalation. The locations which were first to spring to life, such as the suburbs of the Gosford LGA, have already had strong prices growth. Many of these suburbs have recorded median price growth above 12% in the past 12 months.
But most of the regional centres I’ve mentioned, the ones that have only recently lifted sales activity, are yet to record major price growth.
Places like Goulburn, Port Macquarie, Bathurst and Orange have recorded growth below 5% to date. Given the pattern of sales activity, more price growth is likely to follow.