Residential land prices fell more than 10 per cent in parts of the Hunter in the latest official valuations as interest rates, building costs and living expenses hit the property market.
The NSW Valuer General's latest annual report for the year to July 1, 2023, shows residential land values dropped 10 per cent in Cessnock, 5.8 per cent in MidCoast council area, 4.8 per cent in Dungog and 4.6 per cent in Maitland.
"Residential land values in Cessnock experienced a strong decrease between July 2022 and July 2023," the Valuer General says in a report published on Tuesday.
"Continuing interest rate rises, increases in the cost of living, particularly in the costs of construction, and a decline in interest from out-of-town buyers resulted in decreased demand for residential and rural residential properties.
"Cessnock has an ample supply of residential land with new subdivisions being released monthly."
Land values in the other Lower Hunter local government areas, Newcastle (2.8 per cent), Lake Macquarie (0.3 per cent) and Port Stephens (1.8 per cent), also edged lower.
The mining and rural districts of Singleton (2.8 per cent), Muswellbrook (2.5 per cent) and Upper Hunter (2.5 per cent) all bucked the trend by recording slight land value increases.
The Valuer General's report includes samples of typical land value changes in each council area, such as a $50,000 drop in the value of a 695-square metre block in Cornish Street, Cessnock, to $250,000.
In Newcastle, a 501-square metre block in Goddard Street, Fletcher, jumped 16 per cent in value from $375,000 to $435,000, while a 626-square metre block in Wells Street, Adamstown, dropped 7.1 per cent to $757,000.
"Suburbs that include modern residential estates, including Fletcher, showed a strong increase, whilst other modern residential estates, including Minmi and Maryland, both showed slight increases," the report says.
"These locations offered the best amenity in terms of modern project-style housing within estates."
The report says land value changes varied in different parts of Lake Macquarie.
"The western side of Lake Macquarie is showing a more fluctuating trend ranging between steady to strong increases to land values, where increased population and the development of associated services increased overall amenity and demand on the western side of Lake Macquarie.
"In contrast to the broader residential trend, locations that showed a strong increase included parts of Edgeworth, Marmong Point, Mount Hutton, Toronto west, Cooranbong and Redhead.
"The drivers for demand in these areas included affordability, the provision of infrastructure for Cooranbong and the amenity of a beach side suburb such as Redhead, which is one of the more affordable coastal suburb locations."
The official valuations are based largely on property sales, do not include the value of a house or other structures and are used by local and state governments to calculate taxes and rates.
The fall in Cessnock's land values comes after four years of strong growth. The median land value almost doubled in Cessnock from $160,000 in July 2019 to $306,000 in July 2023.
The Maitland median land value has also almost doubled in that time, from $206,000 to $391,000.
The five-year increase is less pronounced in Newcastle, up from $372,000 to $505,000, and in Lake Macquarie, up from $298,000 to $473,000.
The Valuer General's report also includes valuations for commercial, industrial and rural land.
Industrial land in Newcastle and Lake Macquarie jumped in value 14.9 per cent and 22.5 per cent respectively in the 12 months to July 2023.
