In a post Covid 19 world, the residents of Sydney (including smart investors) are looking at other areas to settle down and to invest in areas outside of the Greater Sydney area. The global pandemic has shifted the perspective of people on where they need to be located for work and other everyday activities and many of them are making the choice to move further away from Sydney. Newcastle and the Greater Hunter is one such area that we are seeing a dramatic increase in the market as there are many opportunities in the Newcastle Hunter area where first time investors can make some good development choices.
Background and Context
With Sydney ranking as one of the most expensive cities in the world, it is no wonder why so many savvy property developers are looking towards the greater Newcastle area. Boasting a median house price of around $800,000 and a median price rise of about 40 percent over the past four years. Unlike Sydney, where foreign investors have driven prices up, foreign investment in Newcastle is low, but Sydney-siders have been investing heavily in Newcastle.
But it is not just the affordable property values that make Greater Newcastle a desirable area for property investment. The area boasts diverse growth drivers that help create relatively stable returns on investment.
Newcastle, once seen as a regional outpost of Sydney, is transforming into a vibrant global city. Following the closure of BHP Steelworks in 1999 the city has been revitalised through a Government funded multi-billion dollar urban revitalisation program.
The area is shaking lose on it reliance on the steel and coal industry as the main employer and instead is embracing industries such as education, medicine and technology. The University of Newcastle is one of Newcastle’s biggest employers and has recently expanded into the Newcastle CBD with their newly opened New Space Campus.
Another exciting investment in Newcastle that will have a positive impact on the area is the new cruise ship terminal under construction at Carrington bringing an influx of Tourism to the area. This combined with the Newcastle 500 and other international races is building Newcastle as a new Tourism destination.
From a property development point of view the construction industry is booming in Newcastle with the value of approved developments souring 70% last year and over $3 billion in property investment taking place in Newcastle.
The Greater Newcastle area presents some good development options for potential property developers due to a large number of small houses on large relatively flat blocks. The local councils are encouraging of housing diversity and most of the residential zoning allows for a mix of various low and medium density housing options.
The real benefit of the region is the untapped development potential in suburbs that are on the brink of transformation. The greater Newcastle area is ripe with original post war dwellings located on good sized blocks that are prime for redevelopment and intensification.
There are some low hanging fruit blocks of land that are perfect for instant subdivision available for those savvy property investors and many properties that are perfect for a knockdown duplex or town house redevelopment.
What to look for?
The minimum lot size for subdivision for most residential areas of Greater Newcastle area is 400sqm. This means that each new lot will need to have a minimum lot size of 400sqm EXCLUDING any access handles (if required).
If you are looking to build on the sites you can take advantage of some special exceptions to the minimum lot size and potentially subdivide blocks to create lots as small as 200sqm.
What to Consider
Never take a real estate agents’ word that a property is sub-dividable as there are a lot of rules and regulations that need to be navigated to obtain approval. A good way of identifying whether a property has development potential is to talk to us about obtaining Feasibility Assessment on a property you are interested in. This assessment will highlight any hazards or issues with the development so that you can make an informed decision. We can also outline all the potential costs involved with the development and suggest alternative development solutions.
Once you have secured your perfect investment site then we can be brought on to project manage the whole development. As a multi-discipline firm we can provide most of the services in house, saving you time and money.
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