The Newcastle and Hunter region is rapidly emerging as a key destination for commercial property investment. With an increasing number of large-scale developments reshaping the city’s skyline, key economic indicators suggest that the region is on track for sustained growth. Investors looking for high-value opportunities outside traditional metropolitan centresare turning their attention to Newcastle, where the combination of infrastructure investment, population growth, employment growth and market affordability is creating a compelling case for commercial property.

Construction activity as a key market indicator

Construction has long been a barometer for the health of any property market. The level of development activity, particularly in the face of evolving building costs and broader macroeconomic conditions, is a strong predictor of future growth. A quick glance at Newcastle’s cityscape highlights the scale of transformation currently underway, underscoring the region’s investment potential. With developments taking place across the commercial office market sector in addition to the residential market, developer confidence in the region is strong.

Key market indicators

The Hunter region has shown 3.4% growth in employment year on year according to the latest data from the Australian Government’s Jobs and Skills department. The region has long enjoyed stability in jobs, bolstered by its diversity of industry. The Health Care and Social Assistance lead employment in the region with construction and education also making the top five. Mining continues to play a large part in the economy, with jobs in the sector making the top tenalongside professional, scientific and technical services. This is promising news for the region with many looking to stay local after completing their education and providing greater employment opportunities for those migrating to the region from nearby capital cities. Similarly, recent unemployment data from January 2025 shows the region is declining lower than the NSW state rate of unemployment (3.5% vs 3.9%).

Macroeconomic conditions supporting investment

Recent macroeconomic shifts, including improvements in inflation rates and adjustments to the cash rate, have further bolstered confidence in the commercial property sector. As borrowing conditions ease as a result, investor sentiment is expected to strengthen, providing an additional catalyst for growth in Newcastle’s commercial property market.

Increased investor interest from outside the region

Over the past 12 to 18 months, Newcastle and the Hunter region have seen a surge in interest from interstate investors, particularly those from Sydney and Brisbane. With Newcastle offering greater affordability compared to these capital cities, investors recognise the opportunity to secure premium commercial assets at competitive prices. As a result, agencies such as Commercial Collective are experiencing heightened enquiry levels from buyers eager to capitalise on Newcastle’s comparative value and future growth potential.

Supply of commercial property in the region

Recent years have seen an increase in A-grade office developments in the region which led to unprecedented stock availability over the past 12-18months. This in turn led to a flight to quality for these assets and owners of B and C grade stock seeing greater vacancies and the need for more incentives. With this new stock surplus reaching capacity the market is retracting back to historic levels, leaving B and C grade property opportunities ripe for repurposing by investors.Industrial property in the region continues to be in high demand with available land for development now becoming scarce, prices are set to increase accordingly.

With strong market fundamentals, optimal geographical characteristics, increasing infrastructure investment, and growing national recognition, Newcastle and the Hunter region are solidifying their status as a commercial property hot spot. For investors seeking high-growth opportunities outside capital city markets, Newcastle presents a rare combination of affordability, economic momentum, and long-term growth.

By Dane Crawford CEO Commercial Collective

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