THE median house price in Newcastle has grown faster than in every Australian capital city over the past five years, spelling good news for homeowners but pushing the great Australian dream further away for many.
But just 100 kilometres away, the downturn in the mining industry has created an unprecedented storm for homeowners and investors in Muswellbrook and Singleton where home prices and rents are heading in the opposite direction.
Data collated by Propell, a national property valuation company, also shows the growth in Newcastle’s median price will outstrip all Australian capitals except Sydney this year.
Newcastle will also overtake Brisbane’s median house price by the end of the year.
Propell’s data puts the Newcastle median price at $466,000 and is expected to rise by 8 per cent over the next 12 months. It has recorded 7.1 per cent growth over the past five years, putting the median price ahead of that in Adelaide and Hobart.
The median price of units in Newcastle is even closing in on Melbourne and Perth, having already overtaken the median unit price in Adelaide, Canberra and Hobart.
Low interest rates and the city’s revitalisation are among the key drivers of higher prices in the Newcastle city area, agents say, but it’s a different story up in the valley.
Last week, the Newcastle Herald revealed data showing homes in Newcastle were sitting on the market for about 33 days.
In Muswellbrook and Singleton, the estimated time on the market is now 33 months.
In Muswellbrook, Propell recorded 303 houses going on the market last year, but only 111 sold all year. In Singleton, 158 went on the market but only 58 sold, most at reduced prices.
Agents who spoke to the Herald on Friday said things appeared to have worsened in the first quarter of this year as the mining downturn bites even harder. Landlords are dramatically dropping rents to keep homes tenanted and, according to Propell, home prices will continue to fall.
In 2007, the median home price in Muswellbrook and Singleton was $251,000 and $327,000. At the peak of the mining boom three years ago, the medians hit $323,000 and $422,000, but the latest data shows those medians dropped back to $304,000 and $383,000 in 2014.
Ross Wilkinson has been selling real estate in Singleton for 30 years and echoed the views of other agents who said they were surprised at how quickly the boom ended.
Now running Ray White Singleton, Mr Wilkinson said locals were used to the boom and bust cycles of the mining town economies ‘‘but this one has been really bad’’.
‘‘The backbone of the Hunter Valley is the mining industry and all the other industries that feed off it,’’ he said.
‘‘So when it gets bad, everything goes bad.
‘‘People are dropping rents and those who can’t get tenants are just selling, but there aren’t many buyers. The rural stuff still goes OK, but that’s it.
‘‘There’s a bit of an inkling that things might be turning around and mining is starting to pick up again, but we’ll have to wait and see.’’
The Propell data is collated using figures from the Valuer-General’s office and CoreLogic RP Data on property sales. A chief researcher for Propell said the Newcastle figures related only to about three-quarters of sales in the Newcastle local government area because sales in ‘‘top end’’ suburbs such as The Hill were disregarded, along with those at the bottom end. When median prices were compiled, unusually high or low sales or transfers were also disregarded. The same methodology was used when compiling data for each of the cities.