Kembla Grange has led the region’s growth over the past financial year. Photo: Wollongong City Council.
The Illawarra property market remained flat in June, but zooming out to the financial year shows a polarised market across the region, with a striking 15 per cent difference between the best and worst performing suburbs.
Cotality’s latest Home Value Index showed Australian housing values rose 0.6 per cent in June, marking five consecutive months of growth. But the Illawarra recorded no change — a result that doesn’t surprise analysts, even in a national upswing.
“Looking at the quarterly change is more useful,” Cotality Asia Pacific Head of Research Tim Lawless says.
“At 1.6 per cent growth for the Illawarra, it’s pretty clear the market is in some phase of growth. In fact, the region’s been in positive territory since February, in line with the February rate cut.
“This current modest growth is typical for a fresh cycle. As interest rates continue to fall and sentiment improves, it should add further upward pressure — though it’s worth noting the Illawarra remains a relatively unaffordable market, and lending conditions are still cautious. We’re unlikely to see growth accelerate in the immediate future.”
The Wollongong LGA has done the heavy lifting in the region’s recovery, with more affordable areas such as Dapto and Port Kembla showing the strongest gains over the past few years. More recently, established Wollongong suburbs have driven growth.
The standout performer this financial year was Kembla Grange, where values rose 10.8 per cent, bringing its median to $1.027 million — almost exactly on par with the region’s median.
Next came Koonawarra with 7.7 per cent growth and Kieraville with 7.3 per cent.
At the other end of the spectrum, seven suburbs recorded house price declines over the financial year. Jamberoo led the falls at -5 per cent, followed by Minnamurra (-3.3 per cent) and Tullimbar (-2.9 per cent). Slight drops were also recorded in Bulli, Dunmore, Austinmer and Albion Park Rail.
With the potential for further interest rate cuts on the horizon, Lawless says higher-end markets might soon return to growth.
“We’ve seen before that more expensive markets tend to react more quickly to rate changes,” he says. “This might be because buyers in the upper quartile are more interest-rate sensitive because they’re borrowing larger amounts and carrying bigger debts.”
While global uncertainty and geopolitical tensions are weighing on consumer confidence, Lawless says these are “peripheral concerns” for Australia, which is relatively insulated from major international shocks like the US trade tariffs.
“In fact, the RBA has pointed out that if China looks to expand trade, it could be a positive for Australian exports,” he says.
Closer to home, affordability remains the biggest challenge for the Illawarra.
“The median for all dwellings is sitting right around $1 million,” Lawless says. “It’s cheaper than Sydney, but it’s still high. Household debt is elevated, and lenders remain cautious.”
Ultimately, supply and demand will drive the market — and the latest listing figures suggest a tightening grip on supply.
“Listing numbers across the region are trending lower. We saw them peak in November last year at 1727 properties. Now there are just 1333 on the market — that’s about 1 per cent lower than a year ago,” Tim says.
“While it’s not a huge drop, stock levels are clearly coming down. Meanwhile, sales numbers are up 1 per cent compared to this time last year. Fewer listings and more sales in an already expensive market are only going to put more upward pressure on prices.”
