Newcastle house prices bounced back strongly in October in line with bullish rises in the Sydney and Melbourne property markets.
Figures issued on Friday by property analysts CoreLogic show the median value of a house or unit jumped 1.4 per cent across the Newcastle and Lake Macquarie local government areas last month, a similar rise to when the market was booming 18 months ago.
Newcastle and Wollongong have been the two worst-performing regional-city housing markets in Australia over the past year as Sydney prices dropped.
Prices began falling in Newcastle in June last year but levelled out three months ago. The October rise followed a 0.6 per cent increase in the value of a typical Newcastle house in September.
The median Newcastle house price of $556,000 is down 6.7 per cent on last year's peak but has clawed back some of the losses from the 2018-19 financial year.
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Unit prices in Newcastle and Lake Macquarie have been slower to recover but are also showing signs of life.
They are down 10.3 per cent on their April 2018 high point but grew 0.5 per cent in October.
Newcastle property agent Scott Walkom said the market was "definitely on the way up, but it's not super-fast".
"Buyers are probably competing more for properties," he said. "I think market conditions have improved. It's still a bit cautious. Cautiously optimistic.
"Two weeks ago we had three auctions and sold them all on the day, but some had only one bidder, one had 15 and the other one had two, so the market's a bit patchy."
He said the market was "really strong under $1 million".
"I think people are back looking with a vengeance. It's helping the market all along. People are cautious but are probably feeling like they should buy now rather than keep waiting."
The rebound in prices has spread to the rest of the Hunter, where median house values rose 0.7 per cent in October to $435,000. Prices in the Hunter did not fall nearly as far as in Newcastle and are down only 3.2 per cent on their peak a year ago.
The CoreLogic monthly report shows median prices jumped 1.7 per cent in Sydney and are now up 5 per cent in the past three months.
It was a similar story in Melbourne, where the median climbed 2.3 per cent last month.
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