Newcastle's outer suburbs and outlying areas are shaping up for property buyers seeking more lucrative locations as Sydney’s real estate market continues to boil.
PRDnationwide Newcastle and Lake Macquarie managing director Mark Kentwell said property investors were flocking to Newcastle in search of affordability and stronger capital gains potential.
Mr Kentwell said new data from PRDnationwide Research revealed that growth suburbs Maryland and Fletcher were delivering higher than average gross yields for houses, in particular, as well as units.
“Given that they are Newcastle’s leading suburbs in terms of population growth, it is not surprising that the high level of demand is generating stronger yields,” he said.
“They are ripe areas for investors who increasingly are turning to Newcastle with high expectations for capital growth and return on their investment.
“It’s not Sydney but at the same time it’s not too far from Sydney so Newcastle is a viable location for those becoming weary and wary of that market.”
PRDnationwide’s research report, Newcastle’s 2015 Third Quarter, reveals net average population growth of 3.55 per cent for Fletcher and Maryland ahead of the CBD and Cooks Hill on 2.88 per cent, and more than triple most other areas of the city.
PRDnationwide’s analysis of gross rental yields across the Newcastle local government area show Maryland and Fletcher achieving returns of between 5 and 8 per cent, with some units returning closer to 10 per cent.
Median house prices in Fletcher have grown almost 30 per cent over the past five years.
Other strongly performing outer suburbs in terms of rental yield included Callaghan, Jesmond, Waratah and Broadmeadow which all recorded returns above 5 per cent.
Mr Kentwell said outlying areas to the south also were travelling well with Warners Bay and Charlestown chalking up impressive price growth, particularly for apartments.
Research for the latest quarter reveals that the median price in Warners Bay grew almost 28 per cent for units and 6.1 per cent for houses during the past 24 months.
Charlestown median unit prices rose 10.2 per cent while house prices lifted 6.4 per cent over the same period.
Mr Kentwell said he expected strong buyer interest in residential developments in suburban areas currently marketed by PRDnationwide Newcastle New Projects division in light of the growing appeal of many of the suburbs.
“Newcastle is gaining momentum as a steady, viable and diverse property market that is close to Sydney geographically but without the frenetic real estate activity,” he said.
Newcastle New Projects is currently marketing a collection of house-and-land packages in St Andrews Way at Fletcher.
Priced from $545,000, each has four bedrooms, two bathrooms and a double garage.
Farther north at Raymond Terrace, New Projects is handling the sale of rural residential blocks of land in Rees James Road.
Parcels range in size from 500sqm to 1044sqm and are priced from $165,000.