The month in review: Wollongong
By Herron Todd White
On the back of a very strong 2015 in which the Illawarra real estate market exceeded expectations, January 2016 sees the market starting strongly, albeit with some trepidation about the ongoing strength from both agents and buyers in our opinion.
Local real estate agents are in general bullish that they can see the results in 2015 replicated in 2016. However while many 12 months ago said that the past two years was simply the catch up that was needed, it is plain that the meteoric rise in prices cannot continue. We are hearing that Sydney prices have fallen in the last quarter and that there is some softness overall in that market. With Sydney CBD only one hour from our northern suburbs, that stabilisation is sure to affect our prices.
Some northern beaches agents in the Wollongong area are telling us that where they used to have several people vying for properties at auction, they are now struggling to get a pair. We saw many auctions postponed or vendor bids come into play right at the end of 2015. In our view there will not be a major drop in prices as there will still be some strength in the local market due to one thing – a continued low interest rate environment.
As always buyers and lenders should 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 sector is still uncertain. With recent BlueScope Steel jitters and declining Chinese demand for our steel products and coal, we are not out of the woods yet in the Illawarra in regard to job cuts in the industrial sector and subsequent knock on effects. We already have high unemployment rates so any more could put paid to further residential price growth in 2016.
Overall we predict the market to be steady for at least the first half of 2016. In the latter part of the year, we believe sales will slow and it will no longer be a seller’s market but rather a more steadied 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 and beach and train proximity. Sea views are becoming less valued as closeness to shops, schools and transport take over.
In the southern areas, we look to Shellharbour and Kiama as our picks. Shellharbour’s 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 village feel.
An increased supply of new units in the CBD, North Wollongong and other inner north areas should be viewed with caution in regard to stability of price levels in this sector.