The price of a typical Newcastle house has climbed back close to record highs after a monthly jump of almost 1 per cent in March.
Another 10 months of that and we'll be looking at a median price of a million dollars for the first time across the Newcastle and Lake Macquarie local government areas.
After the customary 20 per cent deposit, the mortgage on a typical $916,000 Newcastle house is $733,000, requiring repayments of $1175 a week.
Servicing such a loan within the mortgage stress safety net (30 per cent of income) requires a household pre-tax income of $3916 a week, or $203,632 a year.
Interestingly, this roughly equates to the combined average full-time earnings of a man ($1977 a week) and a woman ($1760) in NSW, though Census figures suggest only about one in six households in Newcastle earn more than $3900 a week.
Newcastle's record median house price of $919,000, set in April 2022, will come under threat this month.
The key difference between now and then is that, when prices peaked two years ago, the average home loan interest rate was 2.4 per cent, not 6.8 per cent.
Repayments on a typical Newcastle house mortgage were $754 a week, or $421 less than they are today.
That's a jump of 56 per cent.
As tough as the market has become in Newcastle, it is worth casting an eye down the freeway at median prices in Sydney, where high population growth is straining housing supply.
The latest CoreLogic figures for March show the capital's house prices have marched ahead more than 10 per cent in most suburbs in the past year, compared with only 6.9 per cent in Newcastle.
The increases have driven the median house price in the North Sydney-Hornsby district, for example, to a staggering $3.02 million.
Other parts of Sydney have similarly eye-watering median price tags: Baulkham Hills-Hawkesbury $1.98 million, Northern Beaches $2.61 million, Ryde $2.43 million, Inner West $2.52 million and Eastern Suburbs $3.59 million.
It is only when you get to the Outer South-West and Outer West-Blue Mountains that you see the typical house dipping below seven figures, but even their $940,000 median value is higher than Newcastle's.
These prices have obvious implications for Sydney and help explain why the NSW government is trying to radically increase housing supply, especially in established suburbs close to public transport.
The high values also have consequences for the Lower Hunter, which is taking on an increasing number of refugees priced out of the Sydney market.
It is why community and political leaders in the Hunter are arguing so vocally for investment in housing infrastructure and high-speed transport to Sydney.
The Australian Bureau of Statistics' median income figures for NSW show the typical Sydney family can afford to buy in the outer west and south-west but not anywhere else in the city unless they opt for a unit.
CoreLogic's March home value index puts the median Hunter price outside Newcastle and Lake Macquarie at $709,000. No wonder Cessnock and Maitland are among the fastest-growing local government areas in the state outside Sydney.
Newcastle house price rises and falls typically trail Sydney's by a few months, so we could see values continue to climb this year, especially if the Reserve Bank starts cutting interest rates in the spring.
If predictions of continued slow house construction prove correct, the pressure on prices in Sydney and, consequently, the Lower Hunter look set to continue.
