An influx of commuters and downsizersare contributing to significant home values growth in the Illawarra, one expert believes.
According to the latest CoreLogic regional update for the June 2017 quarter, the Illawarra region (Kiama, Shellharbour, Wingecarribee and Wollongong LGAs) experienced strong home values growth.
“Some regional areas are enjoying the benefits of buoyant property market conditions due to housing demand rippling outside of the capital city boundaries into regional towns, particularly coastal regions,” CoreLogic research analyst Cameron Kusher said.
“With mortgage rates still low, the attractiveness of housing, particularly in some of the larger coastal regional markets, is likely to continue to show further growth over 2017.”
According to CoreLogic’s report, the Illawarra was a top performer, with an annual increase in home values of 15.8 per cent for houses and 14.4 per cent for units.
Rental rates also increased; units in the Illawarra region recorded a significant increase with rates up by 5.1 per cent.
While the Illawarra was a top performer for home values, sales activity dropped. The area recorded its biggest fall in sales activity over the same period with transactions down 7.4 per cent, or 447 fewer homes selling when compared to May 2016.
Trever Molenaar, Real Estate Institute Illawarra chairman said the growth was in many ways due to the region’s proximity to Sydney.
“The big thing in the market at the moment is the downsizers - there's a lot of people downsizing, both in Wollongong and Sydney," he said. “Also, what you’ll find is, because we have such a big commuting base, even though we don't have a lot of industry in Wollongong outside of the university, the hospitals and BlueScope, you've still got the commuter factor.
“A lot of people still travel from Wollongong to Sydney, so that's what keeps the prices up. There's also the lack of supply. We just don't have a lot of areas being opened up, especially in the north.”