The Illawarra has found “a groove of solid capital growth”, led by the Wollongong LGA. Photo: Planning NSW.
The Illawarra housing market is on the brink of a fresh record high, with rising buyer confidence, easing interest rates and tightening stock levels fuelling a steady recovery in home values.
According to Cotality’s July data, dwelling values across the region climbed 1.6 per cent over the three months to July, pushing the median home price back over the million-dollar threshold for the first time since 2022. The regional median now sits at $1,008,000, up from $999,000 in June.
“It is still overall 1 per cent below the peak of May 2022,” Cotality Head of Research Eliza Owen said. “But with the current pace of growth across the Illawarra and the likelihood of an interest rate reduction in August, we will likely see this market back at a fresh record high in a matter of weeks.”
The latest growth figures cap off a strong start to 2025 for the Illawarra, following a mild dip in values late last year. Ms Owen said momentum had been building thanks to rate cuts and limited stock levels, which had created “a groove of solid capital growth” throughout the region.
Wollongong led the charge, with dwelling values rising 2.7 per cent over the quarter, making it the best-performing local government area in the region.
The top-performing suburbs in the three months to July included Mount Ousley, up 5 per cent, Mount Keira, which rose 4.6 per cent and blue-chip northern suburb Coledale, which gained 4.1 per cent. Fern Hill recorded the slowest quarterly growth in the city, but still posted a 1.2 per cent increase.
The strength is being seen across both houses and units, suggesting buyers are active across all price points.
“Really what this data is telling us is there’s a broad-based increase across all different segments of the market for Wollongong,” Ms Owen said.
Cotality’s Eliza Owen said the Illawarra region was on track to see record highs in a matter of weeks. Photo: CoreLogic.
Affordability remains a challenge for many, however.
“There’s an interesting duality in the market at the moment,” Ms Owen said. “We know lowering interest rates typically has the fastest impact on expensive markets, but at the same time there’s very strong demand for affordable homes.”
Nationally, home values rose 0.6 per cent in July, matching growth rates from the previous two months. All capital cities recorded monthly increases, led by Darwin (2.2 per cent) and Perth (0.9 per cent), while Melbourne (0.4 per cent) and Hobart (0.1 per cent) saw more modest gains.
Despite regional areas once outpacing capital cities, the trend has now reversed, with the combined capitals posting a 1.8 per cent rolling quarterly increase, compared to 1.7 per cent in the combined regions.
According to Cotality’s Executive Research Director Tim Lawless, market conditions remain finely balanced.
“The opposing influence of low supply, falling interest rates and rising confidence run up against affordability constraints and lingering uncertainty,” he said.
For the Illawarra, supply remains a key factor. Ms Owen noted that total listing volumes had trended lower throughout the year, exacerbated by the usual winter slowdown.
“Even comparing this July to July 2024, total listing volumes have fallen year on year. That could be supporting that steady increase in values,” she said.
While few expect a return to the runaway price hikes of 2020 and 2021 — when the Illawarra recorded an astounding annual growth rate of over 35 per cent — the current trajectory of about 2.5 per cent growth year on year is still positive enough to push the market steadily forward.
