A woman and child have fled their Thirroul home and a man was forced to barricade himself in a room after two men armed with handguns broke in on Tuesday.
Two men, believed to be armed with handguns, forced open the front door of the Princes Highway home just after 5.30am, police said.
Police believe the incident was targeted.
The men made demands of the residents, a 45-year-old man, 47-year-old woman and 10-year-old boy.
As the men ransacked the house, the woman and child escaped through a window to a neighbouring home, and the man barricaded himself in a room of the premises.
The offenders fled from the premises in a silver coloured sedan, police said. The men have only been described as wearing balaclavas and gloves.
No one was injured during the incident.
Wollongong police were called and established a crime scene.
Investigators believe that the incident was targeted and the residents are not assisting police.
Police have urged anyone with information about the incident to contact Wollongong Police or Crime Stoppers on 1 800 333 000.