_Newcastle on the radar for the ultra-wealthy as business activity increases
The global consultancy’s The Wealth Report 2022 found Sydney moved up the City Wealth Index – which assesses where the wealthy prefer to live, spend time and invest – from position 31 to 14 in 2021.
At the same time, the research uncovered data that showed private jet flights from Sydney to Newcastle were on the rise.
Knight Frank Head of Residential Research Michelle Ciesielski said globally, private jet activity rose in 2021, surpassing even pre-COVID levels.
“There was growing demand for jet travel last year because flying domestically wasn’t easy, so the next best thing to conduct business in an efficient manner was to travel on a private jet, with many switching to this type of travel.
“Flying privately was also seen as the safer option in terms of health risk.
“Many customers were new to the business aviation sector as the convenience and bubble hygiene of flying privately drew travellers away from the depleted airline networks.”
Knight Frank’s The Wealth Report 2022 found Sydney was the leading hub for private flights in the Australasian region in 2021 with total flights of 2,481 in 2021, ranking 260 globally for flight numbers.
Total flights from Sydney in private jets recovered 21% in 2021. The most popular route from Sydney was to Melbourne, but the fastest growing route was Sydney-Newcastle.
Business activity on the rise as Newcastle’s population and infrastructure grows
While some UHNWIs (ultra-high-net-worth individuals) have been flying to Newcastle for leisure, with an abundance of infrastructure projects and rise in business activity in the city and the wider Hunter Region, many are visiting for investment opportunities.
Newcastle Airport is just a 30-minute drive from Newcastle CBD, and is convenient to the wine, food and tourism region of the Hunter Valley and beaches of Nelson Bay, Port Stephens, Fingal Bay, Newcastle, Lake Macquarie and the Central Coast.
The Hunter region has the largest economy in regional NSW and has seen the transformation of Newcastle into a global ‘smart city’, while being connected to major shipping ports across Asia-Pacific through the Port of Newcastle.
The region has strong local defence, education, health and advanced manufacturing industries.
Newcastle has seen 300 infrastructure projects delivered, through $90.4 million for upgrades or new community infrastructure in 2021/22, with more to come.
One major project in the pipeline is an upgrade and expansion of Newcastle Airport’s international passenger terminal, announced earlier this year, which is considered to be the final piece of the puzzle for the city and Hunter Region in achieving global connectivity.
Williamtown, in the Hunter Region, which is home to an RAAF Base and the airport, has also been named as a Special Activation Precinct, which houses a defence and aerospace hub, boosting the local economy and creating thousands of jobs for the region.
Another major development for Newcastle – and evidence of its growing popularity - has been the opening of its first five-star hotels, with the Crystalbrook Kingsley opening last year and QT Newcastle just opening.
Improvements to infrastructure and projects generating jobs will cater to the growing population in Newcastle with the region benefitting from the regional shift during COVID, with many people moving out of Sydney and into the NSW regions.
Opportunities for investors
As more people have moved to Newcastle over the pandemic, there has been more business activity and a need for more business services, said Ms Ciesielski.
She said people were moving to the Hunter Region full time, but many were also splitting their time between Sydney and Newcastle, having a second home in the regional city rather than just a holiday home.
Knight Frank Head of Newcastle Ross Cooper said there had been more activity in Newcastle from a business and commercial perspective over the past few years, creating opportunities for investors looking to capitalise on future growth.
“In particular, we are seeing an expansion in Newcastle of existing businesses that are either based in Sydney or Newcastle,” he said.
“Many businesses believe it is easier to do business in Newcastle in terms of attracting employees back to the office and for staff retention due to relocations during COVID.
“As a result many Sydney-based businesses have expanded into Newcastle.”
For investors, the major benefit of investing in Newcastle over Sydney is the relative affordability and better returns, with the latter having more compressed yields, Mr Cooper said.
“Many wealthy investors are looking further from Sydney to find higher returns on their investments,” he said.
“Even though our prices have significantly increased in the past 12 months to two years, if you compare Newcastle to Sydney, it’s still affordable.”
Mr Cooper said Newcastle’s industrial market in particular had been “extremely strong” over the past year, with land values doubling due to a lack of land that was ready to build on and ongoing high demand.
With strong population growth, he said the development site market was also performing well, being sought after by investors.
He said local and interstate developers were backing the Newcastle economy and the future growth to come through commercial projects currently under construction, including office developments.