The Central Coast of New South Wales is a local government area established in 2016 with the amalgamation of Gosford City and Wyong Shire councils. As of June 2016, the Central Coast had an estimated population of 339,550 with forecasts of an additional 36,000 residents by 2026. The Central Coast property market is unique in that price growth in Gosford has historically been more volatile than that of Wyong. Both regions do, however, tend to track greater Sydney’s growth cycle, albeit after an initial delay.
The Central Coast property market has historically underperformed the benchmark set by Sydney, with median house prices increasing 5% per annum on average between 1991 and 2016, compared to 7% for Sydney. Figure 1 charts the median house price in Gosford, Wyong and Sydney between 1991 and 2016. Increased accessibility to the Central Coast resulting from the NorthConnex project will likely narrow the future performance gap between the regions.
Figure 1: Gosford, Wyong and Sydney Median Price: 1991 – 2016
Over the 25 year sample period, end of year prices declined nine times in Gosford, eight times in Wyong and three times in Sydney. Figure 2 charts price growth in Gosford and Wyong between 1991 and 2016. As can be seen in the figure, the magnitude of price reductions is higher in Gosford than Wyong, indicating greater price volatility for Gosford.
Figure 2. Gosford and Wyong – Median House Price Growth: 1992 – 2016
2018 and beyond
Figure 3 charts how much more expensive the median priced house in Sydney was compared to Gosford and Wyong between 1991 and 2016. A result of ‘2’ would indicate that a house in Sydney was twice the price of one in Gosford or Wyong in a given year (defined as the Sydney premium). A result of ‘1.4’ would indicate a premium of 40%.
Figure 3. Premium of a House in Sydney Over a House in Gosford and Wyong: 1991 – 2016
The premium has been trending down since December 2014 indicating price growth in Gosford and Wyong outpaced that in Sydney. At the end of 2016, the median priced house in Sydney was 2.3 times more expensive than one in Wyong and 1.9 times more expensive than one in Gosford. These figures are 20% higher than their long-term average, indicating a degree of value for the Central Coast housing market.
The potential of gain does however come with higher levels of volatility, with the most significant price corrections doubling those of Sydney for extremity. With the NorthConnex project resulting in the Central Coast becoming more of an extension of Sydney than a regional satellite, price volatility will likely stabilise in the longer term.
In the near term, a higher than average Sydney premium will likely spur demand and continued price growth of the Central Coast housing market, particularly in established areas proximate to lifestyle amenity.
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