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Best suburbs to invest in Newcastle and the Central Coast in 2022

Profile photo of Craig Gibson

Looking to invest in the Newcastle real estate market, or researching the best suburbs on the Central Coast

Read our guide for an idea how these markets performed this year, what house price predictions experts are making for 2022, as well as an idea of the best suburbs to invest in these two locations.

Let’s start with a reminder of how these markets performed this year.

What did the Newcastle and Central Coast real estate market look like in 2021?

where to buy in Newcastle
A major regional centre, Hunter/Newcastle outperformed Sydney for most of 2021. So will the same transpire in 2022?

2021 is likely to go down in the record books as a ‘hot’ year for property, particularly in  regional markets. Regional markets tend to lag capital cities, but this trend has been upended by Covid and the ‘flight from the cities.’ Sydneysiders have been heading to regional locations like Newcastle and the Central Coast for some time, but this turned into a stampede after restrictions became a reality.

Affordable property and a largely Covid- and congestion-free lifestyle are the main drawcards of property in Newcastle and the Central. 

Why is this the case? 

More affordable property and a largely Covid- and congestion-free lifestyle are the main drawcards. However, remote working has also meant that some people are able to spend at least part of the week working remotely. Sydney, and especially if you are north of the harbour, is also commutable from the Central Coast, which for some is essentially the best of both worlds.

In terms of the big picture, CoreLogic’s recent Housing Market Update (October 2021) records a rise in dwelling values of +27.9 per cent for regional NSW in the 12 months to October. 

QBE’s Australian Housing Outlook (2021–2024) reports that prices in the Hunter/Newcastle, “outperformed Sydney for most of 2020/21”, with house prices up +22 per cent over this timeframe, with a median price of $755,000. It’s a similar story for Central Coast locations like Gosford (+18.4 per cent) and Wyong (+16.7 per cent), for the year to September 2021.

Let’s now look at what the experts are forecasting for 2022.

Newcastle and Central Coast property market predictions 2022

Overall property markets nationwide are expected to slow in 2022, as affordability—or a lack thereof—starts to bite. The financial regulator (APRA) also recently upped serviceability criteria for new borrowers, which together with speculation about a potential interest rate rise in 2023 has dampened the outlook somewhat. 

Property analyst Michael Yardney believes real estate in Central Coast should perform strongly in 2022.

Pete Wargent, co-founder of buyer’s agent BuyersBuyers, is still bullish about regional locations, forecasting, “for regional areas, the Central Coast is where most of the opportunities are in NSW, [and] places like Cessnock and Beresfield around Newcastle as well.” He does caution that APRA is likely to restrict borrowing capacity, so he thinks that as a result, “it will probably push buyers down a price bracket or two.”

Property analyst and investor Michael Yardney of the popular Property Update blog believes, “real estate in Sydney’s larger regional locations, and in particular in lifestyle locations like Byron Bay, the Central Coast, the Hunter Valley, Wollongong, and South Coast should perform strongly this year, with beachside suburbs likely to outperform the wider overall market.”

QBE predicts regional NSW price growth, “is likely to underperform against Sydney as the general exodus from metropolitan areas following the pandemic outbreak slows.” They forecast Newcastle to grow by +6.9 per cent, with a median house price of $807,000 in 2021/22.

The insurance company also believes the affordability crisis, particularly in Sydney, may be a silver lining for regional centres like Newcastle and the Central Coast. They forecast that, “prolonged or further lockdowns in metropolitan Sydney would sustain the short-term demand in coastal communities.”

Best suburbs in Newcastle and the Central Coast to invest in property in 2022

If you’re looking for suburbs to invest in on the Central Coast, residential property site Hotspotting has identified the following to watch in 2022:

  • Blue Haven, with a median house price of $560,000, has grown +13.7 per cent over the past year. It has a 10 year average annual growth of +6.3 per cent , vacancy rate of 0.5 per cent, and a median rental yield of +4.1 per cent.
  • Gwandalan, with a median house price of $550,000 it has grown +17.5 per cent over the past year. It has a 10 year average annual growth of +7.5 per cent, vacancy rate of 0.7 per cent, and a median rental yield of +3.7 per cent.
  • Toukley, with a median house price of $575,000 it has grown +13 per cent over the past year. It has a 10 year average annual growth of +6.9 per cent, a vacancy rate of 0.4 per cent, and a median rental yield of +3.3 per cent.

And if you are wondering where to buy in Newcastle, local buyer’s agent Chad Dunn, of Mayfield Property Group, believes the following locations are currently undervalued:

  • Birmingham Gardens, with a median house price of $546k, will give you a lot for your money if you spend, “between $700,000 and $900,000.”
  • Anna Bay, with a median house price of $691k, where proximity to the water and the quiet lifestyle are appealing to Sydney buyers. 
  • Cardiff, with a median house price of $603k, has “good sized homes; older, but they're good blocks...especially for first home buyers that are being priced out of other suburbs."

2022 and beyond…

If you’re considering making an investment on the Central Coast or Newcastle region, make sure to do your research. This needs to be down to the suburb level, with a close eye on data such as auction clearance rates, vacancy rates, and rental yields. You also need to look at the big picture, and work factors like potential interest rate rises into your budgeting. There’s also the big question of the pandemic and its impact in 2022, but only time will tell what’s in store.