The highest growth in the housing market for the past quarter was in Port Kembla. Photo: Wollongong City Council.
The Illawarra housing market underperformed in February relative to the nation, which saw a reversal of the housing downturn – but experts expect the region will rally like its capital neighbour before long.
CoreLogic’s national Home Value Index posted a 0.3 per cent rise in February, breaking the short and shallow downturn that lasted just three months, with Melbourne and Hobart – previously the weakest performers – leading the way.
In general, regional housing conditions continued to show a stronger growth trend relative to the capital city counterparts in February, with values across the combined regionals index rising 0.4 per cent over the month. But in the Illawarra market, which has seen a subdued period after peaking in May 2022, it was a different story, with dwelling values declining 0.2 per cent in the month.
Though this signalled an annual change of 1.9 per cent for the region over the year – the lowest annual growth result since September of 2023 – CoreLogic head of research Eliza Owen was unsurprised.
“Regional centres tend to lag behind Sydney,” she said.
“Part of what might be happening in the cycle is demand is being refocused in the Sydney market because it had a bigger decline. From an affordability perspective, it might be that people haven’t seen as much urgency or desire to look away from Sydney and pivot to places like the Illawarra.
“Usually when you go through that inflection point in the cycle, you’ll start with Sydney, then the big regional cities like Wollongong and Newcastle follow a bit later. But they will shift.”
The market movement follows the predicted reduction in interest rates last month when the RBA decreased the cash rate by 0.25 per cent to 4.1 per cent.
Ms Owen said possible further reductions expected in 2025 would help stabilise the Illawarra market value, and potentially “push it a bit higher over the course of the year”.
Within the result, there was a sizeable spread in performance across some unexpected suburbs.
The biggest change was seen in Balgownie where units were up 4.4 per cent in the three months to February, and the highest growth in the housing market was in Port Kembla, which was up 3.1 per cent in the past three months.
At the other end of the spectrum, Albion Park, where just last November units were up a whopping 5.7 per cent, saw the biggest dip in house values of 3.1 per cent, followed by Kiama which was down 2.5 per cent.
“As the cycle progresses and we get some interest rate relief, usually the more expensive markets will benefit more,” Ms Owen said. “These markets might come back stronger towards the end of 2025, as access to more financing enables more demand.”
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