Buying a property in Newcastle: a complete guide

All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.

Yes, the analysis of Newcastle's property market is included in our pack

Thinking of buying a property in Newcastle? You're not alone!

Many people are captivated by Newcastle's coastal appeal and dream of owning a waterfront property or a stylish apartment in this city.

Still, would it be a smart investment? Are property prices increasing in Newcastle? How much does it cost? Is it more profitable to buy in the city center or in Hamilton? Is there any hidden tax? Where can you get a yield above 7%?

We have all the answers you need.

The BambooRoutes team knows this market like the back of their hand. As a matter of fact, we've compiled all our findings in one pack. Get it now.

In the lines below, we will share some of this knowledge.

How's the real estate market in Newcastle?

Is the property market doing well or poorly? People disagree. Instead of listening to opinions, we prefer to look at data and stats to find the real answers.

Property types

In Newcastle, a wide array of properties are available for sale, designed to cater to various preferences and requirements.

These options encompass apartments, tailored for individuals or small families who value a low-maintenance way of living; houses that provide increased space and privacy, making them perfect for growing families or individuals desiring a backyard; townhouses, which combine the convenience of apartments with the comfort of houses and are often favored by first-time buyers; and rural properties, situated on the outskirts, offering a serene and spacious setting for those in pursuit of a countryside lifestyle.

Whether your search entails a snug apartment, a family-oriented house, a contemporary townhouse with all the modern amenities, or a serene rural escape, Newcastle presents a diverse selection of properties suited to meet the preferences of every individual.

Should you buy or rent?

(If you're keeping it for yourself and not renting it)

Whether you're considering settling in Newcastle or already living there, you might be pondering the buy vs. rent decision in this dynamic Australian city.

Usually, buying is better than renting in Newcastle due to the city's strong property market and potential for capital growth.

In contrast, for those who seek flexibility, renting is the recommended option.

Property prices in Newcastle

On average, according to the last data from CoreLogic, buying a property in Newcastle would cost you around $5,800 per square meter.

Clearly, there is a substantial range. A property in Newcastle might have a different price per square meter than a house in Merewether. We actually give you a more detailed breakdown in our pack for buying property in Newcastle and in Australia.

To put things in perspective, it is 3.3 times less than the prices in the center of New York.

Also, housing prices in Newcastle are 46% cheaper than in Sydney.

The most expensive neighbourhoods in Newcastle are probably Merewether, Bar Beach, or Cooks Hill, while the cheapest are likely to be suburbs like Wallsend or Mayfield.

Trends

First and foremost, we have to acknowledge that Australia is, today, one of the most stable countries in the world. The last Fragile State Index that has been reported for this place is 22.7.

This is important to remember when wondering if it's a good investment to buy a property in Newcastle.

Also, according to the International Monetary Fund (IMF), Australia's economy is expected to soar by 8.8% in the coming 5 years, resulting in an average GDP growth rate of 1.8%.

If you want to invest in real estate in Newcastle it's a good thing because, in a growing economy, citizens experience rising incomes that allow them to invest in real estate, either for personal use or as a profitable asset, contributing to the increased demand for properties.

Also, in Australia, the average GDP per capita has changed by 4.0% over the last 5 years. The growth, although minimal, is still present.

These are cues signaling that property prices in Newcastle might go up in 2024 and during the coming years.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Australia right now.

Buying property in Newcastle

Buying real estate in Newcastle can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in Newcastle and in Australia.

Buying process

In our pack, we've explained the entire buying process in detail. We've provided clear information about prices and yields based on the area, guidance on negotiating the price, and options for securing a mortgage.

Now, we're offering you a simpler version, step-by-step, to make it easier for you to grasp.

This is the step-by-step process to purchase a property in Newcastle, Australia:

1. Research the Newcastle property market and set a budget.
2. Obtain a loan pre-approval from an Australian bank or lender.
3. Engage a licensed real estate agent familiar with the Newcastle area.
4. Search for suitable properties listed on platforms like realestate.com.au or domain.com.au.
5. Arrange property viewings with the agent.
6. Make an offer through a Contract of Sale and negotiate terms with the seller or their agent.
7. Conduct a property inspection and obtain a Pest and Building Inspection Report.
8. Finalize the mortgage application and secure financing.
9. Exchange contracts with the seller, including a 10% deposit.
10. Appoint a conveyancer or solicitor to handle the legal paperwork, including a title search and land transfer.
11. Review and sign the Transfer of Land document.
12. Settle the property by paying the remaining balance and applicable stamp duty. Complete the process with the Land and Property Information (LPI) office and take possession of the property.

Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Australia.

Make a profitable investment in Newcastle

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Where to find a property

Explore these websites to find properties in Newcastle:

• Realestate.com.au - A comprehensive platform for real estate services, providing property listings, mortgage information, suburb research, and the latest property news.
• Domain - A property portal offering a wide range of real estate services, including property listings, home loans, new developments, and news updates.
• Flatmates - Australia's largest share accommodation website, connecting individuals looking for shared homes or flatmates.
• Allhomes - A real estate website providing various property services, including buying, renting, selling, and commercial properties.
• Realcommercial - The leading destination for commercial property, offering a wide range of listings, investment opportunities, news, and agency information.

Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Australia.

What you can get

As mentioned before, the average price per sqm in Newcastle is $5,800. A 1-bedroom property with 60 square meters of space would cost approximately $348,000, and a 2-bedroom with 85 square meters of space would cost approximately $493,000.

However, the amount you pay for a property can be different based on its characteristics and where it's found.

Housing prices in Newcastle's top areas are generally more expensive. In Hamilton, a residence could be approximately $1,410,000, while a condominium in Merewether might be priced at $620,000.

Certain places come obviously with a lower price tag. You could find a property in Lambton for $270,000, or you may encounter one in Mayfield priced at $220,000.

We give a more detailed breakdown in our full pack for buying property in Australia.

Risks and pitfalls

Here are the main pitfalls when buying property in Newcastle, Australia:

• Coastal erosion risks: Properties close to the coast may be susceptible to erosion, impacting the property's long-term stability and value.
• Bushfire-prone areas: Some regions near Newcastle face bushfire risks, necessitating careful consideration of fire safety measures and insurance costs.
• Mining subsidence: Certain areas have historical mining activities, leading to potential ground subsidence issues affecting property foundations.
• Heritage-listed properties: Buying heritage-listed homes may restrict renovations and come with preservation obligations.
• Strata scheme complexities: Understanding strata regulations is crucial for apartments or townhouses, as it involves shared responsibilities and potential disputes.
• Indigenous land concerns: Buying property on Indigenous land may involve specific cultural considerations and lease agreements.
• Coastal development restrictions: Newcastle's coastal zone management plan could limit building or renovation plans near the shoreline.
• Stormwater management: Some properties might require proper drainage systems to cope with heavy rainfall and prevent water damage.

We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.

Everything you need to know is included in our Australia Property Pack

Living in Newcastle

Living in Newcastle offers an enjoyable, laid-back lifestyle with plenty of activities, attractions and amenities for all ages.

Cost of living

The cost of living in Newcastle is generally considered to be quite reasonable. The city is known for its affordability and there are a range of housing options available at different price points.

Here are some examples to better understand the cost of living in Newcastle, Australia:

• Rent for a one-bedroom apartment in the beachside neighborhood of Merewether: $1,800 per month.
• A meal at a local restaurant with "Barramundi," a popular Australian fish: $30.
• Monthly "Opal" card for public transportation: $90.
• Utilities (electricity, water, heating) for a small apartment in Cooks Hill: $130 per month.
• A cup of "Flat White," a classic Australian coffee style: $4.
• Ticket to the "Newcastle Museum," a local attraction: $10.
• Monthly membership at a popular fitness chain like "Anytime Fitness": $60.
• A bottle of "James Squire" beer, a well-known Australian brand: $5.

Neighbourhoods

Since our goal is to present information in a clear and reader-friendly manner, we've created a summary table outlining the various neighborhoods in Newcastle. For yields, prices and rents, check our property pack.

Life in Newcastle

The economy in Newcastle is largely dominated by the service and public sectors, with the city having a large concentration of government jobs. Newcastle is also an important industrial and retail centre, with many of its businesses providing services to the wider region.

What expats usually like the most in Newcastle is the friendly locals and the vibrant city centre, with its many bars, restaurants, and cultural attractions.

Unfortunately, there is a bit of crime in Newcastle (the crime rate index is around 49, which is not so low). Examples of crimes in Newcastle include theft, vandalism, drug dealing, and assault, which are all crimes that are typically committed by the local population and do not generally affect the expat population.

A good point for a property investor - there is a light rail system in Newcastle called the Newcastle Light Rail.

Newcastle has excellent access to healthcare, with a wide range of public and private health services available.

Finally, it is worth noting that the University of Newcastle ranks among the top 250 universities in the world.

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Renting out in Newcastle

If you're considering purchasing property solely for renting and earning income, you'll find valuable information in this section.

Long-term

Tenant Profiles in Newcastle

According to the data reported by Wikipedia, the home ownership rate in Australia is 66%, which is average.

It means that, if you decide to buy and rent out in Newcastle, there will be a good number of people who can become your potential tenants.

If you decide to buy and rent out to long-term tenants, you should target young professionals, students, and families looking for an affordable cost of living. Additionally, Newcastle is known for its vibrant nightlife, so short-term tenants such as tourists and holidaymakers may be a viable option.

Here is a little summary table we've made for you.

Rental yields

Nowadays, the rental yields you get in Newcastle are between 5% and 7%. There are some opportunities. So you know, a "good" rental yield is above 7%.

Properties close to the University of Newcastle and the John Hunter Hospital tend to give the best rental yields in Newcastle due to the high demand for rental accommodation from students and hospital staff. Also, properties located in suburbs with good transport links to the city centre are likely to be in high demand.

For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.

Short-term

You could also decide to rent short-term to students who are studying in Newcastle, as well as people who are visiting the city for business or leisure. Professionals who are relocating to Newcastle temporarily may also be interested in short-term rental options.

If you decide to opt for short-term rentals, consider properties in Merewether, Hamilton, and The Junction as these are some of the most sought-after areas in Newcastle, Australia, for short-term lets. These suburbs are well-loved for their proximity to the city's attractions and their array of local amenities, making them ideal for visitors seeking both convenience and the vibrant lifestyle that Newcastle offers.

There are approximately 770 active Airbnb listings in Newcastle, reflecting a dynamic short-term rental market. The average daily rate stands around $187, which is quite high.

You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in Newcastle can make around $2600 per month. Also, the average occupancy rate is estimated at 64%.

Is it worth buying real estate in Newcastle then?

Buying a property in Newcastle can be a fantastic decision if you're in it for the long haul. The city's property market shows promise with stable growth, and the IMF predicts Australia's economy to soar, potentially driving property values higher. Compared to big cities like Sydney and New York, Newcastle offers affordable housing without sacrificing quality of life.

Plus, if you plan to rent it out, there's demand from students and medical professionals near universities and hospitals, providing a steady income stream. Newcastle's laid-back coastal lifestyle with various amenities is a bonus.

However, if you're chasing quick returns or crave flexibility, think twice. Newcastle might not be your best bet for short-term gains; it could take time for your property to appreciate significantly. The rental market, while promising, falls within the 5-7% yield range, not meeting the "good" yield threshold of 7%.

Also, consider the risks like coastal erosion, bushfires, mining subsidence, and restrictions on heritage-listed properties, which could complicate ownership. If you prefer flexibility in your living arrangements, renting might be a more suitable option. Finally, pricier neighborhoods like Halmilton may not fit your budget, so explore more affordable areas if cost is a concern.

In a nutshell, Newcastle's property market can be a smart investment for the long term, but it's not the place for quick returns or those seeking short-term flexibility. Weigh the risks, rental yields, and your lifestyle preferences carefully before diving into the property market in this coastal city.

Make sure you understand the real estate market in Newcastle

Don't rush into buying the wrong property in Australia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.

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The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.