A quarter of another year has drifted past with the statisticians and economists rattling off
new numbers to help us understand how we are progressing. But can we understand? The St George Banks Economist Hans Kunnan at a recent breakfast says of the Hunter,  things are rosy; no worries go out and spend. Fancy a banker saying that? The Hunter  Research Foundations (HRF) Dr (I’m not an economist) Brent Jenkins basically said things  aren’t bad but why are we feeling subdued? That probably is closer to the mark.
Data coming in on the real estate front is also a bit like how Brent is feeling, some up,  some down, some just treading water. The Property Council published the Office Space Report for the Newcastle CBD which showed a dramatic increase in vacancy rates.

The problem with the city is that we are not creating new businesses. We are either shuffling existing businesses or losing businesses while at the same time building extra floor space. I sit at my desk and watch the rise and rise of the University building, (it looks so much taller in real life than the pictures indicated), I’m both excited by the vibrancy the thousands of young people will bring and this could be the stimulus the city needs. Also there’s trepidation at the adjustments needed to cope with having an extra 8,000 people a day coming and going, parking and travelling through the inner city. Business could easily be driven out in the adjustment period as parking will be at a premium and here’s a tip; offices on the fringe of the city with parking will be in high demand; do we need a New York style solution?

We certainly need the light rail sorted out sooner rather than later and Ian Kirkwood’s  articles in the Newcastle Herald are insightful based on his recent experiences in France.

The Raine & Horne Industrial Average (the measure of industrial vacancies in the region) is also patchy however there are signs of improvement with a net absorption of 18,076m2 of floor space.

Square metres equal jobs and each job on a factory floor has a multiplier effect on jobs in the community. According to Daryl Wilson Economic Development Manager for Wyndham Council in Victoria at a recent Australasian Business & Industrial Parks Conference the top (4) industry sectors for job multipliers are; Construction 242 jobs, Manufacturing 212 jobs, IT & Communications 207 jobs, and Wholesale Trade 185 jobs. Whilst the bottom (4) of (16) industrial sectors are; Education & Training 129 jobs, Health Care & Social 127 jobs, Retail Trade 126 jobs and Accommodation & Food 125 jobs.  The Hunter, according to Dr Jenkins (HRF), is creating jobs in the bottom (4) multiplier sectors
whilst losing them in (3) of the top (4) multiplier sectors, these will be indicators to watch in the future.

Housing in the lower half of the region is still performing strongly however rather than  patting ourselves on the back as the graph of house prices rise surely we’d be better measuring, graphing and publicising affordability. A community with high workforce participation and high affordability is far healthier.

Commercial and industrial investment properties are in scarce supply with high demand pushing the yield expectations down to unprecedented levels. A recent Raine & Horne Auction at Charlestown generated 95 enquiries with 25 contracts issued, 15 bidders registered, achieving a 6.3% yield at $1,300,000. With only one buyer there are plenty of purchasers left over.

Autumn is the season for spin, statistics, statisticians and economists. The Hunter economy is bubbling along but just bubbling with some positive signs of improvement and some negative signs of difficulties ahead. We are in a holding pattern.


Steven Dick
Raine & Horne Commercial


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