Huntley, where the Forest Reach development is taking shape, has clocked the highest growth by far over the past year, with housing values up 24.3 per cent. Photo: Jen White.
Australia’s housing market has “split into two speeds” according to Cotality’s February House Value Index, with the Illawarra firmly in the camp of slowing growth.
Perth led the capital surge with a spike of 2.3 per cent in February, and Brisbane, Adelaide and Hobart also posted solid gains, while Sydney and Melbourne have flatlined as higher rates and weaker sentiment bite.
The Illawarra saw a half a per cent rise over the month — less than half the growth of regional Australia as a whole, but stronger than Sydney, which was down 0.1 per cent.
It’s a continuation of a trend, according to Cotality’s Asia-Pacific Executive Research Director, Tim Lawless.
“More affordable housing prices relative to Sydney are a key factor in people’s decisions,” he said. “I would not class Illawarra as affordable exactly, with a median price around the million-dollar mark. But compared to Sydney, it is.”
While soft, growth was still there, and Mr Lawless pointed to underlying data that showed listing numbers 18 per cent lower than a year ago.
This shortage of stock explained why discounting rates — the percentage of difference between the original asking price and ultimate selling price — sat at just 2.5 per cent for the month, well below the region’s average of 3.5 per cent.
Sales volumes are also above the 10-year average at about 4.7 per cent.
“So with sales tracking above average levels and listing numbers 18 per cent lower than the year before, it does look like demand is outweighing supply and for buyers,” Mr Lawless said.
“That means a little urgency in the decision-making process, despite the recent rate rise and affordability issues.”
Looking at performance over 12 years, Huntley was the top performing suburb by far, with housing values up 24.3 per cent and median house values of $1.1 million.
This was followed by Bulli, Mount Ousley, Mount Kiera and Mount Pleasant, with median values ranging between $1.6 and $12 million and rises in housing values ranging from 12 to 16.2 per cent.
The weakest markets were in the Kiama and Shellharbour local governemnt areas, starting with Gerringong where values were up only 0.1 per cent, and Kiama Downs with 0.8 per cent growth, followed by Gerroa (1.4 per cent) and Cringila (1.8 per cent).
Rental vacancy rates sat “extraordinarily low” at just 1.1 per cent, and rent prices were up 7.2 per cent — notably higher than the national average of 5.5 per cent.
Mr Lawless said it sent signals to investors.
“That growth is appealing to the investment market, and arguably we could do with more investment given the vacancy rates, but yield is only around 3.7 gross in the Illawarra,” he said. “It’s higher than Sydney (3 per cent) but still not that high.”
September marked the cyclical high of the region’s housing values growth at 2.8 per cent.
“Since the rate hike, we’re definitely seeing growth slowing down,” Mr Lawless said. “Prices are rising, but not as quickly.”
