If you’re in the market to buy a home in the Illawarra, you’ll be parting with about a million bucks, according to CoreLogic’s latest market analysis.
The property research firm put the median Wollongong dwelling price at $1,019,410, 3.1 per cent higher than it was 12 months ago.
Three per cent might not sound like much, but when prices are this high it comes to about $30,000 – slightly more than a third of the average annual income for Wollongong households.
“Dwellings” refers to all residential properties across the market.
When you drill down into houses versus units, things get a bit murkier.
The median price of a house in Wollongong is about $1.2 million. House prices dipped 0.4 per cent in November, but over the past 12 months have had an overall growth rate of 5 per cent.
The median price of a unit in Wollongong is about $715,000, and while they performed better than houses in November, with a 0.4 per cent increase in value, over the past 12 months they had a much lower rate of appreciation, at 0.7 per cent.
CoreLogic’s national Home Value Index (HVI) has risen consistently since February, with the average price of homes across the country reaching a record high in November.
But those records aren’t being broken everywhere.
CoreLogic head of research Eliza Owen said the regional market value was lagging 1.8 per cent below the historic highs of May 2022.
“The decline in regional Australia has been offset by a really strong bounce-back across capital city markets,” she said.
“The combined capital city market is about 1 per cent above the previous high, so that’s dragged up the average.”
Market values across the Illawarra are currently 6.7 per cent below their record high in May 2022, with Wollongong the furthest behind, at 7.4 per cent below.
So what does all this mean for people in the market?
“The monthly change in value seems to have a recent peak in September,” Ms Owen said.
“It’s only a slight trend but it speaks to softening market conditions after a pretty good 2023 capital growth rise.
“This probably comes from interest rates starting to bite. The November rate rise in particular seems to have knocked some of the wind out of consumer sentiment.
“With consumer sentiment sitting at pretty low levels nationally, buyers tend to be put off big financial commitments such as housing purchases, and that’s true across the Illawarra as well.
“For those who bought early on in the COVID period looking to sell, they’re still likely to make a pretty good nominal gain – however, less than if they sold at the peak in March last year.
“For those who bought around the March 2022 peak, they’re less likely to see profit from resale at this stage, but people don’t typically sell after owning for only a year or two.
“It is a risk for people who have issues with mortgage serviceability. If they bought around the market peak and have to sell, there may be a chance they won’t make a profit from resale.”
For those looking to get a foot on the ladder, the picture is less optimistic.
“Conditions have softened a little but not much,” Ms Owen said.
“Prices are still over the million-dollar mark in Wollongong, and with interest rates at 6 to 7 per cent for owner-occupiers on average, it’s a lot of money to service a mortgage.
“It’s more likely to be wealthy buyers or those not reliant on credit who can take advantage of this market.”