Fewer sub-$500,000 investment opportunities in Newcastle: HTW

Inner city Newcastle is growing rapidly with $500,000 buying you much less compared to what it did 12 months ago, according to Herron Todd White's latest report, which examines investment opportunities under half a million.

The inner city suburbs of Kotara, New Lambton Heights, Waratah, Tighes Hill, Georgetown and Adamstown fitted nicely into the $500,000 mark but recent evidence shows properties in these areas are being snapped up quickly.

HTW valuers report that in Adamstown Heights, a property sold for $85,000 above its listed price of $480,000, with a total of 10 active bidders for the recent Saturday auction. 

This type of sale is not a one off the valuation group says, with prices in neighbouring suburbs also shooting up with higher than average sales as the whole area gets a boost as well as booming favourites Jesmond and Birmingham Gardens.

Another dark horse in Nelson Bay (more famous for having the highest mortgage delinquency rate in Australia), which HTW says "surprised us all" and experienced a slight jump in sales.

The area is seeing growth in the low priced homes and rental prices which is driving more investor activity. 

The new development areas of Gillieston Heights, Cliftleigh, Aberglasslyn and Singleton are also ready for some investment action with many houses recently finished, sitting vacant and available for rent. 

Local agents currently reported to HTW that around 200 houses in Singleton are vacant and a further 80 or so in Gillieston Heights are all available for tenants.

Although the asking rental price in such areas has fallen quickly from $420 to around $380, the supply of these rental properties far exceeds the demand, a dangerous sign for investors.