A modern beachfront house has set a new record for residential property in Newcastle, selling for $7.25 million prior to going to auction.
The four-bedroom house, located at 38 John Parade in Merewether
, was highly sought-after during a public marketing campaign, with 17 inspections booked for the …
A modern beachfront house has set a new record for residential property in Newcastle, selling for $7.25 million prior to going to auction.
The four-bedroom house, located at 38 John Parade in Merewether, was highly sought-after during a public marketing campaign, with 17 inspections booked for the property as soon as it was advertised.
PRD Newcastle and Lake Macquarie’s Mark Kentwell, who led the sale in association with his colleagues Natalie Tonks and Chasse Ede, said buyers were attracted to the house’s sleek minimalistic feel, floor to ceiling glass and a private guest bedroom and self-contained apartment on the ground floor.
“In terms of public marketing the campaign was five days, but the lead-up was exclusive to people we were dealing with before,” Mr Kentwell told Australian Property Investor Magazine.
“We had some significant Sydney and some interstate interest on the property as part of the campaign, luckily we had a lot of virtual information so they could really gain a deeper understanding without having to come.”
Mr Kentwell said while he was not surprised at how much the property sold for, the sales price did raise some eyebrows among Newcastle market watchers.
“The last sale around $7 million was in 2007 or 2008,” Mr Kentwell said. “But in the last 12 months there have been at least six sales over $5 million, and these are generally in the absolute inner city or beachside areas, and there is still depth in the market there to go.
“When I look at the people who have been buying these properties, there are a lot of people in that list who have been looking for more than five years for something in a premium spot that matches their criteria, so the capacity is there.”
Mr Kentwell said the relative scarcity of premium beachfront homes in Newcastle had been a considerable factor in the record result, as well as the swift sales campaign.
“It’s such an exclusive position - there are only 10 homesites on John Parade, and it’s a beachside promenade,” he said.
“The average hold on that strip is 12 years.
“It’s a case of when someone has the budget for these premium spots, they really have to be decisive at the time, and if they don’t pay a premium, they could be waiting another 10 years.”
Regional property markets have gotten a major boost from prospective buyers seeking to relocate from Sydney, with the coronavirus pandemic facilitating people to work from remote locations.
In the first few months of the crisis buyers had their focus on holiday hotspots, but more recently, cities such as Newcastle are increasingly coming on the radar.
“Up to 20 per cent of our enquiry for properties above $3 million is of Sydney clientele,” Mr Kentwell said.
“Some of those we had engaged with already, and they’ve come from our database, and others are fresh enquiries.
“They’re not just flocking to lifestyle locations, while you might get some people purchasing in Port Macquarie or Coffs Harbour or Port Stephens, and that’s given those markets a little bit of an increase because they've been so flat, people are actually coming to Newcastle to permanently reside and they’re not just doing it to retire.
“Newcastle as a property market has a lot of investment opportunities.
“We’ve had graphs that have rivalled any Sydney and Melbourne graphs over the last 10 year cycle, but we don’t have the troughs.
“If you look at the median prices of the local government areas, we have had substantial increases that have come close to the increases in the capital cities, Sydney and Melbourne in particular.
“But we haven’t had the troughs afterwards, we’ve just had levelling, and the yields have been stronger and affordability is stronger.”
Mr Kentwell said buyers had also been attracted by the value proposition in Newcastle, with homes worth $3 million vastly superior to a similarly-priced home in Sydney’s inner suburbs.
A $3 million house in our region, you could buy in a suburb like Merewether and you would have fantastic ocean views, four bedrooms, three bathrooms, two-car garage, so that would be a family or premium entertainer’s residence.
“You’d probably also get a fantastic property in The Hill, which is a very supply-constrained market, or you’d buy the top of the offerings in Cooks Hill, which is very much like Paddington.
“If you compare what you are getting for $3 million in Sydney, you are probably talking about a terrace with or without car parking in those inner areas, whether it’s Paddington or Glebe, for example, and it wouldn’t be the best of the terraces either.
“They are inner city areas, granted, but you’re not necessarily walking to the beach, you’re not parking two cars comfortably off the street, you’re not fitting in a family and you don’t have a backyard.
“They are an investment grade product or inner city living product, with two or three bedrooms. There’s a big contrast there, and it’s the same with apartments."
