Kiama’s property market will stay strong in 2019 as Wollongong and Shellharbour have mild price declines, an analyst says.
Simon Pressley, head of research at property market research firm Propertyology said during 2018, while Sydney saw a 10 per cent decline, the Illawarra markets produced price growth.
“Wollongong (3.3 per cent) and Shellharbour (one per cent) were only mild, but Kiama was one of the strongest markets in Australia last year (11.8 per cent increase in median house price),” he said.
He expected Kiama to remain a strong market throughout 2019, “perhaps in the range of three to six per cent growth”.
“(However) there are clear signs that the growth cycle in Wollongong and Shellharbour has reached a conclusion,” Mr Pressley said.
“Prices have now flattened right off in both locations.
“We’ve also observed an increase in stock on the market, selling times increasing, and a reduction in buyer activity.
“While the economy in both locations will remain healthy, we’re anticipating a reduction in median property values over the next couple of years.
“Buyer fatigue, affordability constraints and tighter credit conditions will contribute toward mild price declines during 2019.”
Mr Pressley said interest rates are likely to remain low in Australia, and indeed globally, for some years yet.
“Rises in interest rates, which obviously will happen at some point, are often due to inflationary pressures,” he said.
“An increase in wages and property rents often accompany interest rate rises.
“Of bigger concern for Wollongong and Shellharbour is the record volume of new housing supply, especially apartments, that has accumulated over the past few years.
“Building approval volumes have been at record highs for every year since 2014. Wollongong historically averaged circa 600 extra dwellings per year.
“However, this figure has averaged circa 1400 per year over the past four years.”