Prices in Wollongong are expected to remain flat, with aggregate growth of one per cent in the three years to June 2021, a new report suggests.
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The slowdown in house price growth that emerged through 2017/18 is expected to continue into the 2019 financial year, according to industry analyst and economic forecaster, BIS Oxford Economics.
BIS Oxford Economics has released findings from its Residential Property Prospects 2018-2021 report.
According to the report, the Wollongong residential market has enjoyed strong growth in recent years, benefiting from its proximity to Sydney and the potential for the population commute to Sydney, where there is a larger variety of higher-paying jobs.
Wollongong’s median house price is estimated to have risen by 68 per cent in the four years to June 2017, but growth has slowed to an estimated two per cent in 2017/18 in line with the slowdown in the Sydney market.
In contrast, median house price growth in Newcastle has lagged, having risen by an estimated 42 per cent in the four years to June 2017, although house price growth in 2017/18 has been stronger, at an estimated five per cent.
Both markets are forecast to show slowing price growth over the next three years, in line with the weaker Sydney market.
More upside is forecast for the Newcastle market, where the median house price is expected to rise by a total six per cent in the three years to June 2021.
Meanwhile, prices in Wollongong are expected to remain flat, with aggregate growth of one per cent in the three years to June 2021.
The report notes that recent population estimates from the Australian Bureau of Statistics suggests that despite decreasing affordability in Sydney, “there hasn’t been significant growth in migration into these regions from Sydney as yet”.
“However, if movements were to accelerate, there could be some upside to the price forecast for both markets.”
According to the report, a number of factors are increasingly weighing on the residential market.
These include that banks have continued to tighten the screws on investors, reducing their borrowing capacity.
In addition, record new dwelling completions has seen markets either tip into oversupply (or remain in oversupply), or significantly erode any market deficiency that has been in place.
