How Is The Rental Market In Newcastle and Lake Macquarie? (September Update)

We've all seen property prices skyrocket post-COVID, particularly in regional areas such as Newcastle and Lake Macquarie. Exodus from capital cities, increase in numbers of people working from home, and a desire to live somewhere with more space and a greater lifestyle has all been part of this shift. 

In this post, we detail what this shift to the regions - specifically to the Newcastle and Lake Macquarie area - has had on two primary measures of the rental market: rental vacancy rates and weekly rental amounts.

We take a look at how these two measures have changed over the past 12 months across the following broad areas of the region, to provide a snapshot to answer the question "How's the market?":

• Adamstown, Adamstown Heights, Garden Suburb, Highfields, Kotara (Postcode 2289)
• Cameron Park, Cardiff, Cardiff Heights, Cardiff South, Edgeworth, Glendale, Macquarie Hills (Postcode 2285)
• Charlestown, Dudley, Gateshead, Hillsborough, Kahibah, Mount Hutton, Redhead, Tingira Heights, Whitebridge (Postcode 2290)
• Merewether, Merewether Heights, The Junction (Postcode 2291)
• New Lambton, New Lambton Heights, Kotara East (Postcode 2305)

​What is Happening in the Rental Market in Newcastle and Lake Macquarie?

To answer this often-asked question, below we will take a quick look around selected suburb areas in the region and summarise how things have changed, using SQM Research data. 

​Rental Vacancy Rates - How Have They Changed Across Newcastle and Lake Macquarie?

Low vacancy rates generally indicate tight supply vs demand for available properties, and are generally accompanied by rent increases on the market. As vacancy rates begin to increase, we see a softening of the high asking rents experienced in times of tighter availability, and also an increase in time on market for those wishing to obtain top-of-market rent. 

Looking across the region, here's how things have fared.

Adamstown, Adamstown Heights, Garden Suburb, Highfields, Kotara (Postcode 2289)

​In this area, we've seen rental vacancy rates fluctuate slightly but drop to 0.4% as at the end of August 2021. While this is still a very low vacancy rate, this is the result of gradual increase from the vacancy rate of just 0.1% in August 2020 (which was the lowest vacancy rate on record for this area).

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Cameron Park, Cardiff, Cardiff Heights, Cardiff South, Edgeworth, Glendale, Macquarie Hills (Postcode 2285)

​In the 2285 postcode region, rental vacancy rates have increased slightly in August, up to 0.4% from 0.2% as at July 2021. In this area of Lake Macquarie, the rental market is even tighter than in the heights of regional rental demand mid-COVID in August 2020 when vacancy rates in this area were 0.5%. 

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Charlestown, Dudley, Gateshead, Hillsborough, Kahibah, Mount Hutton, Redhead, Tingira Heights, Whitebridge (Postcode 2290)

​Across postcode 2290, vacancy rates have altered only very slightly over the past 12 months. As at August 2021, the vacancy rate was just 0.2%, equal to the tightness in market experienced in the height of the rental crisis post the first-wave of COVID in October and November 2020. During the past 12 months, the vacancy rate in this area has not lifted above 0.4%. It is a very high demand, tight supply area. 

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Merewether, Merewether Heights, The Junction (Postcode 2291)

The hotly desired area of postcode 2291 has seen rental vacancy rates quite steady over the 6 months to July 2021,  however has dropped to just 0.2% in August from 0.5% as at the end of July.

The drop to 0.2% in August indicates a tightness in the market not seen in the previous 5 months. However, this is still a marked increase from the 0.0% vacancy rate experienced in July 2020, indicating that, while tight, there has been an increased availability of rental stock over the same time 12 months ago.

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New Lambton, New Lambton Heights, Kotara East (Postcode 2305)

In the New Lambton and Kotara East regions, August saw a reduction in vacancy rate to 0.4%, down from 0.5% in July. Again similarly to the Merewether and The Junction area, this vacancy rate has fluctuated only slightly over the past 6 months, but the tightness in the market has relaxed slightly from the area's 12-month record low vacancy rate of 0.1% in November 2020.

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Weekly Rent For Properties - How Have They Changed Across Newcastle and Lake Macquarie?

Adamstown, Adamstown Heights, Garden Suburb, Highfields, Kotara (Postcode 2289)

As at the week ending 12 September, the median weekly rent for all houses in postcode 2289 was $640pw, which is a 22.4% increase over 12 months and an 11.4% rolling quarter increase. This indicates very strong return for investors in this area, which has experienced continued growth over recent months.

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Cameron Park, Cardiff, Cardiff Heights, Cardiff South, Edgeworth, Glendale, Macquarie Hills (Postcode 2285)

In this same period, the median weekly rent for houses across this region was $551pw. This marks a 17.7% increase on the previous year, and a 9.6% increase rolling quarter change. This is also a strong result for investors in the region and reflective of the continued low vacancy rate in the area.

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Charlestown, Dudley, Gateshead, Hillsborough, Kahibah, Mount Hutton, Redhead, Tingira Heights, Whitebridge (Postcode 2290)

​For the 2290 postcode, the median asking rent across all houses as at 12 September was $532 per week, a 13.3% increase from 12 months ago. Interestingly, this also marks a slight decrease of 1.3% on the rolling quarter, indicating that listed rents have slightly reduced in this area this quarter versus the last. 

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Merewether, Merewether Heights, The Junction (Postcode 2291)

Similarly to the Adamstown and Kotara areas of postcode 2289, the region of Merewether, Merewether Heights and The Junction has experienced a 22.6% increase in rent compared with the same time 12 months ago.

​Median asking rent for houses in this area is significantly higher at $834 per week as at 12 September, and while this is close to the record highs of $889pw in March 2021, there has been a 3.6% decrease in rent this rolling quarter versus the last, indicating a slight softening of the premium asking rents experienced in the first half of the year.

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New Lambton, New Lambton Heights, Kotara East (Postcode 2305)

Postcode 2305 has experienced some of the highest year on year rental increases in the region.

​As at 12 September the median rent across all houses was $601 per week, an increase of a whopping 26.4% against the same time last year, and a 7.2% increase on the previous rolling quarter. 

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​Summary of the Current State of the Rental Market Across Newcastle and Lake Macquarie

​As the data above shows, there have been continued low vacancy rates across much of the Newcastle and Lake Macquarie area. However, there has been a slight increase in vacancy rates and with it some areas of median rents actually decreasing versus the previous quarter and earlier in the year. 

It is still a tight market for renters, however we are finding that many applicants applying for rentals at the current time are not meeting minimum criteria for a quality tenancy e.g. poor rental references, poor rental ledgers from previous agents, low indications of affordability of the property being sought, and/or other issues such as multiple pets, high occupant numbers, etc. 

As always, our recommendation to investors is to consider the data and the experienced input of a knowledgeable property management team in the area. Local media are often far behind the current actuality of what is being experienced in the market, or base their reporting on property data more relevant to the capital cities (which are monumentally different to the local Newcastle and Lake Macquarie market).

If you're seeking a rental appraisal or quality property management service from a team committed to and knowledgeable of the local area, contact us today. We'd love to help you on your investment journey. 

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