The month in review: Wollongong
By Herron Todd White
On the back of a very strong 2014 where the Illawarra real estate market exceeded expectations, January 2015 continued this trend with a strong start. We predict that this will continue until at least mid 2015 and after that, continued growth although at a slower rate. Local real estate agents are bullish that results in 2014 will be replicated in 2015, with many claiming that the past 12 to 18 months strength is simply the catch up that was needed. Whether that is true is debatable. In our view we can simply attribute the strength of the local market to one thing – a continued low interest rate.
Major infrastructure such as GPT’s new Wollongong CBD shopping centre, West Keira and the Shellharbour Marina will be beneficial to employment prospects in the area and keep investors in the market. This will be felt principally in off the plan sales of new units in and around the CBD and vacant land in Shell Cove and Flinders.
The current Government rebates offered for purchasing vacant blocks and building or buying new homes will also see large subdivisions such as Brooks Reach Horsley continue to show growth and keep developers playing a positive role in the market.
As mentioned previously, the continued buoyancy in the market in 2014 across all residential sector types was largely due to near record low interest rates, but a strong local economy with relatively good job prospects also provides a base.
For 2015 to continue the same trend as 2014, interest rates must remain relatively low. These low interest rates are crucial for investors, first home buyers and also renovators and extenders to maintain confidence.
Buyers and lenders should also be cautious about not extending themselves in this low interest rate period to avoid financial stress when interest rates inevitably do rise.
The employment climate in 2015 in the Illawarra will also be a key factor in helping to determine the strength of the local market. Employment security in the mining and manufacturing sectors is still uncertain.
Overall we predict the market to continue its strong growth at least for the first half of 2015. In the latter part of the year, we believe sales will slow and we will no longer see a seller’s market but rather a steadier environment.
Tips for best localities are much the same as always…inner northern suburbs up to Bulli offer the best value for money in our opinion and postcodes such as 2519, 2517 and 2518 rate highly. Look for flat blocks, beach and train access. Sea views are becoming less valued than proximity to shops, schools and transport.
In the southern areas, Shellharbour and Kiama are our picks. Shellharbour Marina is well underway and will really boost this seaside village, particularly now that the new train station has opened at Shellharbour Junction. Kiama is a well preserved seaside location with relatively low rise development and that special