Local developments update: April/May 2020

NEWCASTLE

In April, CoreLogic reported that median unit prices in Newcastle have dropped 10.1% (to $461,000) in the past year. However, many developers are still forging ahead with apartment projects, including the ‘Bowline’ development at Wickham, a 14-storey apartment tower next to the Newcastle Interchange. Bowline was recently approved by the Hunter and Central Coast Joint Regional Planning Panel, with a sales campaign for its apartments to begin in July.

The Iris Capital development of Hunter Street Mall is also still in full swing, with a boutique QT hotel set to be established in the former David Jones building. The 106-room luxury hotel will also include a rooftop bar, and will retain the building’s historic facade. (For more on the numerous hotel developments in Newcastle, see our January 2019 update.)

There was an interesting find in the Housing Industry Association’s April report on housing hotspots throughout Australia: in the past financial year, inner-city Newcastle was the only NSW area outside Sydney to generate more than $200 million in housing approvals. HIA’s Executive Director for Hunter said the Newcastle/Cooks Hill area had the largest value of new housing approvals in 2017/2018 ($239.3 million), adding: ‘In the financial year to January 2019, $160.2 million of residential building approvals have been undertaken, an increase of 58% on the same period a year earlier.’ (More on this report below.)

LAKE MACQUARIE

Business and commercial developments in Lake Macquarie could be set to have their levies changed under a new system. While the current system bases levies on ‘a calculation of peak vehicle trips generated’, the draft plan proposes a flat fee structure based on the value of each development. Those valued at less than $100,000 will be exempt from paying developer contributions, while those worth $100,000 to $200,000 would pay 0.5% of the total development value, and those over $200,000 would contribute 1%. Council has stated that most funds collected from the levy would go towards public amenities and services.

In our last update, we spoke about various election promises that may impact development throughout our focus areas. Ahead of the May 2019 federal election, the Labor party has pledged $1 billion towards a proposed high-speed east coast rail link. If it goes ahead, the rail project could impact urban development in Lake Macquarie, but the Hunter Business Chamber has recently expressed its support, stating that ‘securing a corridor will bring certainty and give state and local governments clearer direction on land-use planning’.

Leah Jay - high-speed railAustralia could be set to follow in other countries’ footsteps with a high-speed rail link proposed for the east coast.

In news a different kind of transport: a $77 million motorsport complex proposed for the Lake Macquarie suburb of Wakefield was approved in May. BlackRock Motor Park will have a maximum capacity of 500 people and up to 20 vehicles using the 5.58km circuit at a time. The complex will include a trackside visitors’ centre with a 100-seat restaurant, 150-person function area and 37 short-term accommodation units, as well as another 64 units for members and a lodge with a gym and swimming pool.

MAITLAND

Newcastle wasn’t the only place with a spot on the abovementioned HIA report about suburbs building momentum around the country. The Thornton/Millers Forest area was named the Hunter region’s number one hotspot this year, with $96.3 million in building approvals and population growth of 7.7%. The Branxton/Greta/Pokolbin area followed closely at $75.2 million worth of approved residential building, as well as 4.2% population growth.

Other suburbs could be set for similar growth in future, with both Lochinvar and Gillieston Heights both having DAs lodged for new subdivisions. After having more than 1000 new lots approved over the last 10 years, Gillieston Heights could have a further 175-lot subdivision either side of Gillieston Road if the recently lodged DA is approved. Similarly, 144 residential lots are proposed for a subdivision on the Aird’s of Lochinvar site.

Leah Jay | East Maitland street scape

In the Maitland CBD, works could begin as soon as mid-2020 on a proposed $43 million civic precinct development. The project will incorporate significant improvements to the town hall, construction of a new administration building, parking and other public domain improvements. The DA and concept plans were developed by council with various heritage consultants and architects, and if approved, the development should be completed by late 2021.

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Interested in chatting further about developments or the local property market? Wondering about branching out with your investments in 2019?

Get in touch with our Investment Services team today for objective information and insight.

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