Illawarra The residential property market in the Illawarra is at the top of the clock and all sectors of housing are running hot at the moment. Strong capital growth has been sustained for the past 24 months through all residential suburbs.
Sales of new release land in Horsley, Flinders and Shell Cove remain strong. First home buyers and investors seeking out value are driving demand for product in the more affordable suburbs such as Cringila, Warrawong and Barrack Heights, with agents reporting very short sale periods.
Suburbs closer to the Wollongong CBD and associated infrastructure such as Figtree, Keiraville, Balgownie and Fairy Meadow are now mostly outside the price point of first home buyers and stock under $500,000 is hard to find.
New infill housing in these suburbs is quickly snapped up by local owner occupiers looking to downsize as well as local and Sydney based investors chasing strong rental returns.
Record suburb sale prices are commonly being set at the upper end of the market. For example, 4 Murra Murra Road, Kanahooka sold for $1,500,000 prior to auction in August 2015 and 49 Lower Coast Road in Stanwell Park sold at auction for $3,690,000 in April 2015.
Residential unit blocks are also highly sought after, with gross yields falling below 5% in some instances. A pertinent example – two adjoining and identical 4 x 2-bedroom, single level, brick unit blocks in College Place, Gwynneville which sold nine months apart at an increase of 30%, or $255,000 in dollar terms. There is strong interest from superannuation funds for this type of property.
The hottest sector for units in the Illawarra continues to be new stock within the Wollongong CBD. Currently under construction here are two major mixed use developments with a total of over 450 residential units between them. Both developers report strong off the plan sales. Sale prices in the high $500,000s for 2-bedroom units are being commanded while 3-bedroom apartments are selling for over $800,000.
Many buyers of this new stock are from overseas, with the Oxford on Crown reportedly being marketed directly to Chinese purchasers.
Developers risk saturating the unit market with future values considered to be volatile, due to on-campus student accommodation development at the University of Wollongong and local and global economic factors, not the least of which is uncertainty over Bluescope and recent coal mine shutdowns pushing unemployment up.
A quick guide to what’s hot (in our opinion):
• Top end northern beaches
• Wollongong Ring (Fairy Meadow, Balgownie, West Wollongong)
• Lower end (Cringila, Warrawong, Barrack Heights)
• Land in new estates (Horsley, Flinders, Shell Cove)
• Unit blocks in one line
Example of a block of units showing capital gain in nine months:
11 College Place, Gwynneville – sold for $825,000 in March 2014 13 College Place, Gwynneville – sold for $1.08 million in December 2014 Both identical and adjoining original, circa 1970s single level brick and tile unit blocks each being 4 x 2-bedroom. A 30% sale price increase in nine months.
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