Future Developments for Newcastle

You can’t help but be excited when you look around our city and see tower cranes doing  their stuff – guys and girls in their fluros heading to their building sites from 5:30am onwards, hanging out in the sandwich bars and coffee shops spending their lunch money.

I hear a lot of talk about too many apartments, Newcastle will be flooded – prices will go down and yes I think some people will miss the mark, but it won’t be because they have developed their complex’s too late it will be because they have missed the mark in design and not catered to a market which will dominate in the next decade. That of the retired Baby Boomers.

When last measured our Dependency Ratio for the Hunter Region stood at 0.58 that is 58% of our population was either under 15 years of age or over 64 years of age. Or better still 42% of our population is in the main spending zone (see Consumer Spending Graph).

Adopted from Dent Research in the US, Australian ages and data have been applied. This graph is typical for the western world as people go through their life cycles. According to the Australian Bureau of Statistics we on average marry at 28 become mums at 29 buy our first home at 31 and one in three will get divorced at 42 – 45. From 26 onwards we become
spenders, like the guys in their fluros we are working to raise the family – working to spend. Raising a family means you spend and the older the kids get the more you spend until they leave when you’re in your early 50’s. Your spending prowess tends to peak, or it
does in the US, according to Harry Dent at around 46.

It is around the early 50’s mark 25% will look to down size as the kids leave the nest. Sometimes it’s to prevent their return! The Baby Boomer nests in and around the Eleebana’s, Maryland’s, Jesmond’s, Elermore Vale’s, Charlestown’s and Kotara’s traditionally had large yards and stairs that become ever more difficult to manage and dangerous as their owners age. The migration that went west in the 1950’s to 70’s will
return.

By 2031 it is estimated that a whopping 74% of our citizens will be outside the spending bell curve, supported by just 26% of the population. As the curve shows the older people don’t spend, they accumulate and save. It is these people who will be looking to return to the city into smaller maintenance free dwellings/apartments.

Not only will these people return but the Region is at risk of becoming a migration beacon for retired people from the country of a greater impact still, cashed up retirees from Sydney (cashed up, they still don’t spend). The region needs to encourage young vibrant
fertile productive people and not become a regional retirement village for Sydneysiders.
The gist is that we need to attract those inside the spending bell curve to keep the velocity of money turning over in our little economy. Craig Lowth from Wilson’s Business Broking summed it up beautifully. “So when Australian Prudential Regulation Authority (APRA) says to the banks we want a higher Capital retention…… in a short period its takes more cash and more velocity out of our system. This contradicts the stance of the Reserve Bank of Australia (RBA) who at the same time drops official interest rates by 0.25% in an effort to spur on growth (in an effort to motivate the velocity of money). This is whilst both political parties dither around trying to pull more tax out of the system to (balance the budget) whilst at the same time not spending enough on infrastructure which will benefit
real investment and efficiency.” It proves at the highest levels – they have no idea! None the less our town is undergoing some mighty changes, apart from the buildings it’s the looming light rail where $500m is set to be spent and inject in to our economy.

However with the quick cheap and easy approach of running the light rail down the old corridor off the table we have to make sure that what is provided on Hunter Street is what will reactivate Hunter Street for business and retail. The Minister for Transport Andrew Constance has assured me personally that the rails will be flush with Hunter Street and not raised. However his advisors have a one track mind (no pun intended) on mixed running of cars and trams. They will not countenance this citing safety. This is despite
Melbourne, despite designing it for Scott Street and not being able to show me anywhere in the world where reactivation of a street scape in an existing older area a tramway has been built with segregated running and removing the street parking.

Newcastle City Councils staff, engineers and experts dispute the Ministers advisors and surely it is our city and our people who should know what is best.

If reactivation of Hunter Street is goal No.1 then don’t pander to a two tram 10 minute time-table. Design this delay capacity into the system and give us a shop front to shop front design not just kerb to kerb. One that looks and feels like Chapel Street Melbourne. The quantity of apartments is not the problem, its building them too small without appropriate parking. Then its the make up of the city with light rail and making sure
Newcastle Council’s opinion is applied so we get value out of the $500 million injection.

By Steven Dick
Director Raine & Horne Commercial Newcastle

Leave a Reply

Your email address will not be published. Required fields are marked *