Is Newcastle a good option?

Hi everyone,

I'm a wannabe first time investor, and this is my first post on here (so please go easy on me!).

I'm looking to buy an IP at around the $300k mark, do a bit of a cosmetic reno and then rent it out. I was planning to buy in the western suburbs of Sydney, but from what I've been reading I feel like I've missed the boat, so now I'm looking at Newcastle.

However, I'm a little concerned by the stories about the market there going flat because of the end of the mining boom. So first of all, just wondering what people's thoughts are on Newcastle's prospects over the next couple of years.

Secondly, I'm liking the look of Glendale, Edgeworth, Cardiff and Wallsend, as well as possibly Islington. Any words of advice on these areas?

Thanks very much in advance,

Neil
 
Hi Neil

I have lived in Newcastle since 98 and have investment properties in Sydney and Newcastle.

There has been a lot of job losses in the mining industry of late with several large support companies laying off personnel. I feel that this really effected towns further up the valley such as Singleton where the vacancy rates have really gone up. I would stay away from these towns

With regards to Newcastle itself - I feel that it still has a lot going for it as a property investment location as the population is diverse enough to support it.

Newcastle has changed alot in 15 yrs I have been here ( born and breed in Sydney ) BHP closed down soon after I moved up here - everyone thought the city would close down - it didn't

There was only one Japanese restaurant in town and few other Asian restaraunts . Now there are more Thai restaraunts than you can poke a stick at.

Honeysuckle forshore has been developed into a largely successful residential and commercial hub with plenty of restaraunts cafes and pubs in what was once a pretty run down area

GPT and Landcom have commited to the development of the Hunter st mall

The university is building a new campus in the city which will obviously encourage more students into town ( student accommodation needed )

The rail line has been confirmed to be removed b/w Wickham and Newcastle train station thus removing a controversial obstacle which has supposedly prevented a lot of development happening here in town - it will open the foreshore up to the rest of the city. It is supposed to be replaced by light rail.

I have heard on the grapevine that P and O have bought a plot of land along the honeysuckle foreshore for a cruise ship terminal - I admit this rumor is not confirmed .
Who would have thought that Newcastle would become a stopping port for cruise ships ( I most certainly didn't ) - but we seem to get a lot of them coming in to port for day stop

For other recent development see attached link
http://www.theherald.com.au/story/1649817/hunter-street-350m-puts-life-back-in-our-town/

After talking to several local agents recently - they are saying currently properties are selling fast in inner city suburbs of Tighes hill and Islington. To quote a agent friend of mine " houses are selling after just one open house - it's the best I have seen it in four years .

There is a lot of residential development happening here at the moment with several inner city apartment buildings being approved and built . PRD nationwide real estate I know sold all 16 one bed apartments off the plan for a apartment building on the cnr of Hunter and Newcommen st within 6 wks.

70 Elizabeth st tighes hill which I went thru for the 1st open inspection a week ago - now has a huge sold sticker on it as I drove past it last night .

With regards to renting - I own a block of flats in a inner city suburb of Newcastle which I bought and renovated 3 yrs ago - it have never been a problem to rent . However I don't think it is quite as crazy as it was a couple of years ago where the vacancy rates where close to zero

With regards to capital growth - after owning properties in both Sydney inner west and inner city Newcastle for over 10 years - obviously both have gone up however clearly Sydney has been the better property purchase for me .

Of the areas you mentioned - I would probably stick to the inner city suburbs such as tighes hill and Islington to capitalise on all the developmemt happening in the city

When I moved up here in 98 - I thought I would only stay for a year or two but here I still am after 15 yrs.

I hope this little rant helps - I'm sure other fourm regulars who live in Newcastle can give more advice.

Time to get out if bed - looks like another fine day here in Newie
 
Hi ChrisA1,

Correct...Was labeled as a 1 of the hotspots.Do some research as to the infrastructure etc being upgraded.
You also have uni,hospital,good transport etc etc.

Cheers Spades.
 
Hi Neil

I just remembered

If you are wondering what can achieved here in the current Newcastle market

Here is a example ( unfortunately not one of mine )

27 Hewison st Tighes Hill 2297

Purchased 8/3/13 $366000

Sold 12/7/13 $ 575000

Looks like they did
New Paint
New kitchen
New bathroom
New carpet
Polished floors
New carport
New back deck

Not bad for 4 mths work

http://www.allhomes.com.au/ah/nsw/p...wison-street-tighes-hill-nsw-2297/20440171211

I saw the finished house very nice

Sorry I am still trying to find photos of the original house
 
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The rail line has been confirmed to be removed b/w Wickham and Newcastle train station thus removing a controversial obstacle which has supposedly prevented a lot of development happening here in town - it will open the foreshore up to the rest of the city. It is supposed to be replaced by light rail.
That is interesting. Why Wickham but not Hamilton?
Does it mean, the Broadmeadow station is going to be upgraded??
 
Thanks for link Spades.

yes - very nice profit !

I could give up my day job !

not bad for a supposed flat market here in Newcastle.:)


Devank - there was much talk in the past about stopping the train at either Broadmedow or Hamilton but its seems official they will stop the train line at Wickham and supposedly replace the heavy rail with light rail. The Newcastle forshore does end just before Wickham station as it becomes Throsby creek

There is alot of talk now of development down the westend of Newcastle around the new interchange( train terminus) . This area has been run down for many years now

Not sure if they will upgrade Broadmeadow station
 
I could give up my day job !
not bad for a supposed flat market here in Newcastle.:)
Don't give up your day job if you that is the extent of your research. :)
Newcastle has not been in a flat market for quite some time.

Inner CBD areas like Wickham, Hamilton, Tighes Hill, Islington, Carrington, East Mayfield etc have done very well - but you won't get in there for $300K.
 
Inner CBD areas like Wickham, Hamilton, Tighes Hill, Islington, Carrington, East Mayfield etc have done very well - but you won't get in there for $300K.
Hi Propertunity, where do you think these areas are in terms of growth, are they nearly at the peak or is there some way to go yet?

Cheers
 
An out of town valuer said recently that the inner city Newcastle market is slow. He is wrong, but you can't tell them! Also discarded more recent comparable higher priced sales to my detriment. Trying to sort out now.:mad:
 
Hi Propertunity, where do you think these areas are in terms of growth, are they nearly at the peak or is there some way to go yet?
Cheers
I never quite know how to answer this type of question.

"Are prices in there, the highest they've ever been?" Yes.
"Will they be higher next year?" Yes, probably.
"Can prices keep going up?" Yes, as long as demand outstrips supply and buyers can get finance or have access to cash.
"Is there a possibility that prices could flatline for a period?" That possibility must always be considered, even if not looking likely, taking into consideration everything we can see presently. That's just the nature of the asset class.
 
Terry Ryder recommended it in his column this week for us.

I'm not sure - have heard about the area so much, and usually that's a sign that it's too hot!
 
Propertunity - I was referring to area. I am buying. Just after your thoughts on area, see if they match up with my research. I like your humour though.
 
Looked at this:

http://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/NSW/Hamilton/?adid=2010725998

Been renovated. I'd guess inhabitated by 2 young lads who are happy to stay on but I'd be happier if they didn't. rented at $380, needs electrical upgrade to meter boxes probably $2000 per unit. Other outgoings reasonable.

And these:

http://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/NSW/Hamilton-East/?adid=2010756214

http://www.domain.com.au/Property/For-Sale/Apartment-Unit-Flat/NSW/Hamilton-East/?adid=2010741402

Lots of early interest in these two going by the open house on weekend. Real estate agent tells me there's been an offer or 2 already but I get the feeling they were rejected. He was pushing for feedback on price. Quite large apartments. Both unrenovated and need a bit of a spruce up but appear solid, double brick, late art deco era. No parking on site and street parking would be a problem. Run down pokey shared laundry out the back. Not sure what they are worth - I'm guessing maybe around 320,000 ish?? Opposite a good shopping centre and close to transport. Undecided about making an offer as don't have the time to be doing renos. Think they would make good long term investment however.

What do people think?
 
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