NSW Newcastle 2019

Hi Alan,

Im looking at a number of spots but its just 2 properties have come about where I can secure them at a good price. So I wanted to drill down to the areas in more detail.

I do understand that Jesmond has a high number of students - im more interested in placing a longer term tenant there but if there are a lot of students there then this may be cumbersome.

Do a lot of first home buyers live or buy in the area?

I like Dudley as an area and think its a good area - are there any issues to be aware of with the area? The rental market looks very tight - does anyone have any IP's in the area?

Shreko - when you say run if you dont have a plan what do you mean by this?

 

I read somewhere that Jesmond is slowly transforming into more family homes as students are now moving in towards the city. I haven't been up that way for a while but I was wondering if this was true?

 

I mean if you just buy an average house is Jesmond, and rent it out through an agent, you are going to have a nightmare because capital gains will be bugger all in that suburb for the next few years, and the types of tenants you will get are the types that you don't want. But if you have a decent plan you can make a bit of cash out of it e.g. develop the land into student/medium density accommodation, build a 2nd dwelling, or do a dodgy student accommodation renovation like I did.

 

Hey Declan probably more FHB in Jesmond than Dudley due to the entry price point more than anything.

 

There’s a big development going in a whitebridge (behind the shops) which might impact supply in the Dudley area. I think it’s a much better place to buy than jesmond though. Close proximity to town, stone’s throw from the beach. Plenty of young families moving in who have been priced out of other beach side suburbs.

 

All things being equal.. Dudley wins hands down.

However I highly doubt that all things are equal..

 

I was keeping an eye on that one. I'm not in a position to buy, but that is pretty much what I would like to get hold of. I chatted to the real estate agent leading up to the auction, but I couldnt make it on the day. When I asked her about it afterwards, she said there was several interested parties, but they couldn't get their finance orgaised in time for the auction. It was listed afterwards with a price of $1200000. Now sold for $1130000.

Would have been happy with that price for a PPOR, maybe not for an investment - but I had already planned the granny flat

Cheers,
Inertia.

 

I thought they would both go for way more. This one and also this one both represent good value.
Both would come up very nicely renovated and make a great place to live long term. They are on to winners here.

https://www.google.com/url?sa=t&sou...FjABegQIAxAB&usg=AOvVaw3GhaCIEIZ1u78oKNNABGNz

 

There would be nothing worse for the area then some plonking a granny flat in the backyard here. Would have to match in with the exsisting houses and neighbourhood.

 

I can think of a few things worse. For example, the late 90's owner builder extension that was done to my house. Horrific.

Cheers,
Inertia.

 

Looks like the Newcastle market back to 2015 levels. Still seems to be holding up ok, just not the crazy money being offered in 2016/17.

Will we ever see that again? Depends on what lucky Phil Lowe does over next few months.

 

Given the qtrly CPI numbers which came out this week, it appears that RBA have their backs against the wall. Inflation at 1.3% well outside of the RBA's target band of 2-3% and shows Aus economic growth is flatlining.

Rate cut is coming soon in my opinion.

Huge warning sign for Australia

 

I agree we have rising unemployment (slowly), low wages growth, slowing economy, house prices down and now low inflation...

Read a good article about unemployment today saying today’s unemployment rate of 5% is like 6 or 7% 20 years ago as today you can easily sign up to be in the gig economy like an Uber driver and be “employed”

 

Interest rate cuts have less meaning around these low levels... will ppl actually borrow more (if they can) with an extra 20bps off??

 

A rate cut will increase a buyers borrowing capacity so will also bring more buyers into the market

 

Hmm research in the USA and elsewhere has disputed this conventional belief.

Because:

1) Banks don’t use the rate cut in their serviceability calculations.
2) 25 bps means more at 7% than at 4%
3) psychologically people are more likely to be concerned about the problems for the economy of a slowdown.

I think the last 2 years have shown in Australia that borrowing capacity is driven by a lot more than just rates.

 

I take your points but it’s going to help isn’t it. As you say there are a lot of factors in play at any one moment so I don’t think anyone, not even the experts, would know how much a rate cut would help by itself.

 

Yep... interested in Newy locals thoughts on falling market? What area’s have dropped the most and which have held up... seems Mayfield has come back to Earth, especially for unrenovated stock.

@tomlemke any 2019 update? It’s been about 6 months since Sydney price falls hit double figures

 

Don't need to be an expert to predict a rate cut won't help the housing market or borrowing capacity at all. Banks must assess serviceability at a minimum 7%. A rate cut will do nothing for anybody's borrowing capacity, except maybe with non-bank lenders, unless APRA change their policy (which they've said they won't).

 

Spot on T-Rex... if anything it could mean confirmation of recession risk for businesses and wider community.