Wollongong

The Smartline Report – June Edition

The month in review: Regional NSW

By Herron Todd White
June 2015

Illawarra
The Illawarra residential property market has continued its strong growth through 2014 to date.

Local real estate agents advise that they are experiencing one of the best first six months in over a decade with many properties selling above reserve or asking price. Record low interest rates combined with a limited supply of properties on the market have contributed to this.

Both the bottom end and top end of the market are seeing capital growth. Units, houses and rural properties are all selling. Auctions are the flavour of the day and if this method doesn’t suit the vendor, marketing is generally on the basis of “offers over …” as it is increasingly difficult for agents to price properties in this buoyant market.

As in other sectors, we are seeing prices in new residential unit complexes in Wollongong and vacant parcels of land in the new estates of Shell Cove, Flinders and Brooks Reach Horsley also showing appreciable rises in the past 12 months.

Many of the new unit complexes are selling off the plan even before any construction has begun.

Investors are keen to purchase new units as a result of low interest rates while also benefiting from government incentives.

First home buyers are snapping up vacant parcels in these new land estates and also benefiting from low interest rates and government incentives. Overall the fierce competition between investors and first home buyers, combined with the low interest rates and the limited supply of properties on the market, is driving prices upward. Sydney buyers are entering the market more and more as they are driven out by the hot-house prices of Sydney.

Although confidence is still high in the market as it was at the beginning of the year, from our conversations with both vendors and purchasers sentiment is that the current level of market activity is bound to slow down soon. Some local agents and valuers are predicting the market to ease towards the end of the year, despite interest rates remaining low. Supply in all areas is increasing as tends to occur when confidence is high and this tends to regulate prices. This will result in more properties on the market, longer selling periods and auction clearance rates declining.

The areas that have seen the most growth are generally those where buyers and lenders should be most cautious. Some areas south of Wollongong have experienced a substantial increase in value over the past 18 to 24 months for instance and may be pegged back in any price correction scenario. As always the top end will be the most susceptible to any slowing in the market. Another sector that has suffered in the past when things go awry is the beach house.

Buyers offloading the beach house to ensure they can keep up the mortgage payments on the principal residence is a situation we have seen before in this coastal region.

Unemployment is still high in the region with talk that both extractive and manufacturing sectors have some redundancies to go. This will also affect confidence and impact on prices.

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

 

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