If you are looking to buy or sell in the South Coast region, you will be interested to know what is going on in housing price trends. Keeping up-to-date with trends is key to being able to make informed decisions on property purchases and investments.
While the 2022 saw rising price trends abate, the rental market in regional NSW continues to maintain a sturdy position and remains a strong choice for prospective investors.
The Illawarra has seen a substantial amount of properties flow into the market, providing buyers in the area with an extensive selection of properties to choose from. This has not only enhanced bargaining power but has also eased the pace of purchasing.
In August this year the Financial Review reported that the next few months could see housing price increase in regional areas within commuting distances to cities such as Wollongong. This is as a result of buyers being priced out by increasing city house prices.
Mark Browning, head of valuation and property advisory at NAB, commented that
“Regional markets that are still relatively affordable and are located within good proximity to capital cities are seeing a resurgence, as they are becoming an attractive option for home buyers who cannot afford to buy in capital cities.”
Tim Lawless, from CoreLogic, stated that house values this year have been impacted by rate rises but that despite this, properties in rural areas in the west and southern parts of NSW have been able to maintain their values more proficiently than in other areas of the state. He noted that the second quarter of this year saw, “stronger growth conditions emerging from your more commutable regional markets.” Mr Lawless expanded on this stating, “ Areas like the Illawarra have seen a 2.7 % rise,” during this time and that, “we’re still seeing rents rising across most areas of regional NSW.” He proposed that continuing rate increases might “dampen” the market but would not likely lead to any backwards trend.
In October, the Illawarra Mercury reported that “Home buyers and sellers have expressed confidence in Australia’s housing market, leading to the full reversal of the most rapid decline in house prices in recent history.” Eleanor Creagh, senior economist for PropTrack, has noted that “Home price growth has been driven by record levels of net overseas migration, tight rental markets and a housing shortage.”
The median house price in Wollongong from December 2022 to November 2023 is at $1,117,500. Whilst the past 12 month growth period has seen the housing market down 7.0%, the same period has seen unit and apartment price go up 1.4%, with a median price of $710,000. For those looking to invest in property in the Wollongong area, houses are being rented out for an average $660/week, representing an annual rental yield of 2.8% and units are renting at around $500/week, representing a rental yield of 4.1%.
So what should we expect in 2024? Well predictions are cautious, as uncertainty about when interest rates will eventually decrease persists, but overall there is a consensus of optimism. The Domain Forecast Report this year, predicts that capital city house prices could rise 2%-4% by the middle of 2024 and that units could rise by 1%-3%. It predicted that Sydney would have the strongest growth despite the RBA’s rising cash rates. This is primarily due to limited supply of housing. This forecast is generally in line with 2024 predictions from major banks: Commonwealth Bank (3%-5%), Westpac (5%), ANZ (2%) and NAB (3%-4%).
Written by Natalie Estalote Astill
Mortgage Broker at Paramount Home Loans Illawarra, working in partnership with Illawarra Mortgage Brokers
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