HOUSING

The Institute for Regional Futures’ Insights Dashboard tracks socio-economic conditions in the Hunter. The dashboard is based on the Hunter Research Foundation Centre’s databank collected over 60 years, the most comprehensive collection of any region in Australia. This dashboard aims to continue making data and insights about the region available to government, industry, and the community.

This Insight Series focuses on housing related issues for the region. The focus here is on quantitative insights. It is recommended to place any insights in the appropriate social context.

Unless otherwise specified, the region refers to the Hunter Valley region, including the Mid-Coast LGA*.

The dashboard is a snapshot of the total data collected by the Institute for Regional Futures. For more information, please contact irf@newcastle.edu.au.

Housing Demand

Population movements

Australia is a highly mobile population, and the Hunter region is no exception. Internal migration (moving house) amounts to 40% of the Hunter population in the most recent 5 year period.

The figure below shows the percentage of the population who have moved in the last 1 or 5 years based on information collected in the census.

Whilst the 1 year change is fairly flat in 2021 compared to earlier years for SA4 level and many LGAs, the 5-year change shows a strong increase - both pre-COVID (2011-2016) and through COVID (2016-2021). At the LGA level, there are expected patterns, e.g. for Newcastle LGA, but some strong increases also in mining communities, such as out of Singleton and Cessnock.

Rental demand

As a region, we have lower than Australian or NSW rental population. The data below shows the percentage of the population who are renting. Whilst most LGAs in the Hunter are lower than State of National average, there is a strong growth in rental percentage at the SA4 level. Newcastle, Cessnock and Maitland have been driving these rent growths, tempered by other regional LGAs, which are seeing a decline in rental percentage.

Housing Prices

Housing sale prices: Price, Volume, Change Hunter-Total

The data in this figure shows the median house price (excluding outliers) for the total Hunter region based on NSW Valuer General data (data collected as part of sales process). The purple line shows the monthly median, whilst the blue line is smoothed data based on a 6 month rolling average of the monthly medians. Data in the last 3 months (beyond the dotted green line) are unreliable due to unfulfilled settlements. In the second sub-plot, the volume of sales is plotted, with green bars corresponding to periods of price increases, and red bars corresponding to periods of price decreases. This quarterly change (% change in prices) is plotted in the third sub-plot. Finally the inter-quartile distribution is plotted in the fourth subplot.

Rental prices

This figure shows the tracking of rental prices at the LGA level. Published by the NSW Department of Family and Community Services.

Rental prices may have just started to see the peak in price rises that have been evident in house sales for some time. The acceleration since 2021 is still high, with most LGAs seeing faster rises than Sydney or NSW. The data below is for the median weekly rent for 3-bedroom stand-alone houses. Rental prices have tempered some of their increases: 12 months to March showed increases in the range of 14-26% across LGAs in the region, whilst the most recent quarter (to June 2023) has seen decreases in some LGAs to give a 12 months to June result of 1-6% increase. Newcastle and Port Stephens have seen the highest rises over this time.

Data source: NSW FACS

House prices to Annual Rent ratio

This figure shows the ratio of house price for a median 3 bedroom house to the rental price. It is an indicator of affordability of rents vs purchases, but also used by investors to determine whether returns on investments are high. Internationally, a value of “20” is a common baseline, and Australia tracks well above this number (reflecting the relatively high price of housing purchases).

Housing expenses - price movements

The ABS publish specific price data on housing related expenses to give better insights (at the national level) about the price movements of purchases, rents and other expenses. Whilst a lot of focus has been put on electricity costs in the recent period, this is only partially justified based on movements in the last 12 months - but comes from a low point in electricity prices.

Construction prices

Another major concern (both for private and public housing) has been the cost of construction, especially due to policy enacted in response to the COVID shutdown that saw a boom in construction activity. That coupled with difficulties in supply chains and transportation saw construction related prices sky-rocket. Now it appears that construction prices have peaked, but well above the previous level.

Housing Supply

Building approvals

This shows the number of building approvals by type since 2016 for the whole of the Hunter.

The same in a cumulative figure (building approvals by type since 2016 for the whole of the Hunter). Clearly the detached house is the main focus of development in the Hunter