CHOOSING where to live is not always a clear and simple decision.
There are often unseen forces at work. The first and most obvious hurdle is as simple as price, but other economic factors also loom large. Chief among them for many is the ability to find and sustain work that will guide where and when they choose to settle, whether it is renting or buying.
The economic answer is one of the reasons Angie Zigomanis gives for his report’s finding that rampant growth in the median Newcastle house price over the past few years is likely to slow down significantly.
After the measure maintained a swift rise of 42 per cent growth over the four years to last June, the BIS Oxford Economics Residential Property Prospects forecasts just a 6 per cent rise over the next three years.
This will be happy news to many who are fighting to find a rung on the property ladder from which to start their ascent, but it may leave owners and investors considering sales with some consternation.
“Normally at this stage of the cycle we often see people from Sydney move up to Newcastle, but it just doesn’t seem to be happening at the moment,” he said. “Slowing prices in Sydney means people looking to trade down and move up are not as confident in doing it.”
It is worth noting that the growth is not stopping, but slowing as prices rise to more comparative levels with the state capital. Earlier this month the Herald reported on Thornton’s Dan Lysaght, who spends six hours a day making his way to work in Sydney. Economist Terry Rawnsley in that story discussed the fact “mega-commuting”, such as that between Newcastle and Sydney, is on the rise as workers couple the high wages from the city with lower property prices beyond its borders. That only makes sense if the gap is significant, something rampant house price growth has perhaps diminished.
The 2016 Census found Sydney’s median income soars over $90,000 while NSW sits slightly above $60,000. While Sydney acts as a fulcrum for high-paying jobs, it will exert gravity on housing demand.
Mr Zigomanis says Newcastle needs “a big turnaround from the employment side” to attract Sydneysiders to the region and push price rises back into overdrive.
Few would argue the Hunter needs less high-paying jobs. That said, delivering them would help make the Hunter a much simpler choice for its next prospective residents.
Sign up for our newsletter to stay up to date.