There are major concerns in New South Wales over an affordability crisis in the housing market, something reflected across the country, but seemingly worse here. According to the Perceptions of Housing Affordability report, 87% of Australians that want to own a home feel that they cannot afford to. A lot of this stems from steady price increases and the high rise of stamp duty over the years. This heavy tax has increased by 750% in 20 years. These measures have placed some homes in the state, especially the Sydney area, out of the reach of a number of families and couples. Even though the average house price Newcastle NSW is growing, Newcastle is fast becoming an affordable alternative for Sydney siders.
Both house prices and rental prices are on the rise in Newcastle, NSW.
Data for recent house prices varies, but each source highlights a dramatic increase. Some report that in the past year, the average house price in Newcastle was $985,000. This equates to an increase of 55.7% and compound annual growth of 9.3%. Others focus on a rise from $312,000 to $500,000 in the last 10 years. This is great for the sellers and real estate agents cashing in on the popularity of the area, but not for those struggling to afford to buy. Then there is the added problem of negative gearing distorting opportunities. Negative gearing allows investors to reduce their personal income revenue by applied losses against business income. For many in this area, rental properties are the best approach. But, even these options can be costly for those in need.
The problem is not just seen in the buyers market. Renters are also hard hit as average house price Newcastle NSW rental prices increase and residents struggle to find the property that they need. Rental demand is currently seen as average at the moment, despite ongoing talk of Newcastle being one of the up-and-coming cities in the area. The median rent is currently around $510 per week. Naturally this varies depending upon the size of the property. This mostly reflects the rental price for families looking to rent a 4 bedroom house, a market that has seen a rise of 1.5%. Couples looking for single or two bedroom apartments can expect to pay around $250-$375 per week, which reflects an increase of 4.2%.
A rise in the supply of affordable homes would lessen the pressure on new buyers, but there is no guarantee that this will happen.
Supply and demand is a key issue in the average house price Newcastle NSW. Limited availability of affordable homes restricts options for everyday buyers. Some, such as the Labour party, insist that new homes need to be built quickly. They pledge 55,000 in three years. Hopeful buyers say four key factors are at work here. They are the need for the removal of stamp duty, improved government assistance, lower prices and better transport links to communities. People want to move to Newcastle as they see the potential in this growing waterfront city, especially as a commuter town.