The month in review: Wollongong
By Herron Todd White
The Illawarra property market has continued to progress well into the new year and continues to record strong sales activity due to the continued low interest rates.
Demand is still outweighing supply in many areas and the low interest rates are creating a competitive market environment. Agents are advising that many properties are selling for asking or above asking price, often prior to auction. The most difficult process for agents at the moment is obtaining listings to sell. Moreover, there are no real signs that certain sectors of the market are beginning to soften and slow. Competition between buyers is strong and often recent sellers are finding it hard to secure a new property that matches their expectations in
terms of quality, location and price.
When the market softens, as we know it will, it’s often the unique rural residential and top end properties that historically are the ones that will be hit the hardest.
It’s also the popular in vogue suburbs where the boom cycle is being experienced that is affected most.
Buyers are currently paying a premium for these suburbs, most notably older renovated homes located close to the beach and Wollongong CBD. Valuers are also noting that investors are paying top price for new units in the Wollongong CBD where some are using their super funds to acquire the purchase.
Modern new duplex homes in Flinders and Shell Cove are also achieving strong sales as buyers are paying
high prices for obtaining new properties in these areas. These sale prices might not be achieved in the future once the home is no longer in new condition. With more large unit residential developments planned in the Wollongong CBD in the near future and an abundance of supply in the new estates of Flinders, Shell Cove and Brooks Reach Horsley, these sectors may feel the effect once the market softens. There are not many poor performing suburbs at the present time, indicating how good market demand actually is.
The best performing suburbs in the Illawarra area at the moment appear to be in the north, starting at Fairy Meadow, Towradgi and East Corrimal but we are also seeing more top end sales in the northern beaches around Thirroul. In the south it’s the established suburbs of Shellharbour, Windang and Warilla that have achieved significant increases in value. These, together with Kiama to the south, experienced a serious uplift in prices in the past 12 months.
More and more we are seeing investors entering the market and pushing up prices often at the expense of first home buyers, who are slowly being pushed out of the market for standard dwellings close in. Investors are also using their superannuation to purchase property.
Overall we see a steady 12 months on the horizon, buoyed by low interest rates. We do however caution that if unemployment increases in the area, growth will certainly be pulled back and from our experience and observations over a number of property cycles, it is the upper end property values that get hit hardest.