The typical Newcastle house is more than $20,000 cheaper than it was two months ago as the city’s slide in property values runs into summer.
The median price of houses (0.9 per cent) and units (1.7 per cent) dropped across the Newcastle and Lake Macquarie local government areas in November, according to data supplied by CoreLogic.
The median house price in the two council areas fell to $565,000 in November, a dip of 2.3 per cent in the past three months. The median was $587,000 in September.
CoreLogic says apartment prices have dropped even more steeply, by 3.7 per cent in the past quarter, to a median of $462,000.
Newcastle’s quarterly decline of 2.5 per cent across houses and units was second only to Sydney’s 2.8 per cent.
Melbourne (2.4 per cent) and Perth (2.1 per cent) were the only other state or territory capitals to go backwards in the three months to November 30. Prices in booming Hobart and Canberra increased more than 1.5 per cent.
A November report from real estate firm Herron Todd White puts Newcastle in the “starting to decline” section of its “national property clock”. Sydney, Melbourne and Illawarra are “declining markets”, and inner Perth, Darwin and Toowoomba are “bottom of market”.
The report says of Newcastle that demand remains strong in coastal Merewether and Bar Beach and in “trendy, up and coming” Maryville and Tighes Hill.
“With such an influx of new units on the market, there is bound to be some oversupply and decrease in demand for older units,” Herron Todd White says.
“However, interestingly there is demand for quality high-end apartment living, especially those with significant views of beaches or Newcastle harbour.”
The CoreLogic report, however, says the top end of the Sydney market has recorded larger price falls than the bottom end. It says the most expensive 25 per cent of properties has dropped 9.3 per cent and the cheapest quartile 5.7 per cent.
The Sydney market peaked in July last year. It has fallen 9.5 per cent since then and is on track to surpass the previous record peak-to-trough decline of 9.6 per cent, set between 1989 and 1991.
CoreLogic’s head of research, Tim Lawless, said tighter credit conditions had spread to the owner-occupier segment of the market, and consumer confidence in housing had weakened.
The fall in Newcastle prices will be welcome news for buyers, who have seen housing affordability deteriorate in the past 10 years. The Newcastle Herald reported in October that median property prices had grown from 6.3 to 8.3 years of gross household income since 2008.
Relative to incomes, Newcastle’s housing is more expensive than Melbourne’s and “exceedingly high” by world standards, according to experts.
Newcastle house and unit prices have dropped 2.5 per cent in 2018.
Correction: A report in the Herald on Saturday referred to CoreLogic regional data which showed a nine per cent increase in Newcastle house prices in the past 12 months, contradicting the metropolitan statistical breakdown it issued this week and referred to in the story above. CoreLogic has said the two sets of data come from different sources but will migrate the regional breakdown to the same data set as the metro figures from the next quarter. The data referred to in the story above corresponds with separate figures from Australian Property Monitors. The Herald apologises for any confusion.