Thursday, 22 February, 2018
Housing affordability in the Hunter was the focus of the Hunter Research Foundation (HRF) Centre’s Hunter Economic breakfast in Newcastle on Friday, 15 February. The Centre’s lead economist, Dr Anthea Bill, said that Hunter median house prices showed resilience in the December 2017 quarter by rebounding from their September quarter dip.
“Fewer investors and increasing supply of housing has seen median house price growth in the major metropolitan markets, particularly Sydney, starting to fall,” Dr Bill said. “In the Hunter yearly house price growth was six per cent and remained in line with five-year averages for the region, although recent quarter on quarter growth rates appear to be trending lower.”
Strong annual growth rates were experienced in the Lower Hunter including Newcastle (11%), Lake Macquarie (8%) and Port Stephens (12%). Muswellbrook’s housing market rallied with 23 per cent price growth, as did the Upper Hunter Shire (14%). Singleton’s prices fell by 13 per cent.
Continuing resilience in the Hunter’s housing market is one likely driver of high levels of regional business and consumer confidence in the local economy. In the December quarter, consumer confidence reached levels well above the long-term average. Hunter businesses’ confidence in the regional economy over the coming quarter is the best it has been since December 2009.
While strong house price growth can have positive economic impacts, Dr Bill said that home ownership remained unaffordable for many Hunter residents.
“The HRF Centre First Home Buyer (FHB) affordabillity index was at its most unaffordable level in June 2017,” she said. “We have tracked the index for almost 20 years, with a dramatic worsening in affordability in the region apparent from the early 2000s. Despite a brief improvement after the GFC, the index has returned to elevated levels for most of this decade. Record low interest rates have not been able to offset the impact for housing market entrants of rapidly rising house prices coupled with sluggish wage growth.”
Other speakers at the breakfast included Greg Budworth, General Manager, Compass Housing, Sharon Pope, Manager Integrated Planning, Lake Macquarie Council, and Dane Crawford, Committee Member, Hunter Future Directions, Property Council of Australia and Director, Project Marketing, Colliers International.