The report says significant recent growth in the residential property market in the Illawarra has created plenty of equity in properties.

Herron Todd White, an independent property valuation and advisory company have released their latest ‘Month In Review’ national property report.

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According to the report, the rise in land values in the Illawarra is allowing property owners to spend larger amounts on either new builds or substantial extensions or renovations of older-style dwellings. 

“Transitioning Illawarra suburbs such as Towradgi, Fairy Meadow, Mangerton, Shellharbour and Kiama are great examples where residential recreations are taking place,” the report says. 

Wollongong City Council’s Development Application Register shows that since 2016, 12 properties on Storey Street, Fairy Meadow have lodged DAs for either demolition and construction of a new dwelling or alterations and additions of an existing dwelling.

“This is a high number in a street of approximately 80 homes,” the report says. 

“There seems to be a mix of home owners undertaking these works.

“Some have recently bought in these areas and are straight away recreating, while others have lived in the original dwelling for a number of years before using the equity they have gained to further develop the property. 

“In future years, we look forward to seeing how changes to state-wide planning laws will affect the more established suburban locations in the Illawarra with greater infill housing expected.”

Tim Stevens, managing director - South East NSW at Herron Todd White said the Illawarra’s “coast and country” feel ensured its ongoing appeal, and areas in close proximity to the likes of the university and facilities would remain sought-after. 

He said this was apparent in the example of the aforementioned Storey Street, which offered location and proximity to infrastructure, university, beaches and overall lifestyle. 

The report also looks at commercial property in the ‘South East NSW’ area. 

It notes that the broad changes being experienced across the retail industry are clearly demonstrated within the Wollongong CBD.

“(This) has seen a transition to a higher concentration of food and beverage businesses after a concerted effort by Wollongong City Council to activate the night time economy.”

The report says this has seen many traditional retailers being replaced by wine bars, cafés, restaurants, boutique bakeries, niche supermarkets and the like, and even serviced-based businesses. 

“Nowhere is this more evident than in the city’s largest shopping centre, GPT’s Wollongong Central, which has a new food court, a food hall within the new format David Jones department store and an entertainment focus with the opening of Holey Moley mini golf that also incorporates a bar and a range of games and activities,” the report says.

“As in most locations, demand for large floor plates is limited with retail tenants seeking to reduce occupancy costs by utilising smaller shop-fronts in the range of 50 to 100 square metres.”

The report says that given the ongoing changes and tenant movement, retail rents have remained static for a prolonged period, with incentives required to lease vacant space and extended letting periods of up to 12 months being common in some locations. 

“Buyer demand for retail investments remains strong with yields typically ranging from five per cent to 6.5 per cent, although most sales have been at price points below $2.5 million,” the report says. 

“One would have to look at the relatively buoyant bulky goods sector for yields at higher price points with The Goods Guys Warrawong selling in May 2018 for $7.15 million, reflecting a yield of 7.65 per cent and rate of $2708 per square metre of lettable area.”

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