On 28 December 1989 at 10:27am, an earthquake measuring 5.6 on the Richter scale hit Newcastle. The earthquake's epicentre was approximately 15 kilometres from Newcastle's central business district.
The earthquake caused 13 fatalities; 160 people were injured. The impact on infrastructure was widespread, with damage caused to roads, bridges and power lines. Fifty thousand building were damaged – of those, 40,000 were homes.
A few months later, in February 1990, Cyclone Nancy brought significant rainfall to Newcastle. This increased the rate of movement in some structures, highlighting leaks in buildings previously thought to be structurally sound after the earthquake.
The Insurance Council of Australia estimated the 1989 damage at $862 million, with the 2011 estimated normalised cost of $3240 million.