Although the Illawarra is “remaining relatively insulated” from the overall market downturn, tighter lending conditions are beginning to take effect, an expert says.
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Domain has released its House Price Report for the December quarter.
The report contains average house prices and figures for the Illawarra.
Domain senior research analyst, Dr Nicola Powell said they were seeing softer conditions coming from the housing market overall.
“We’re starting to see that in some of our more regional areas in NSW such as the Illawarra,” she said.
“What we are seeing across the three (Illawarra) LGAs is they have seen negative falls over the year.
“We are seeing those softer conditions, and it has impacted the Illawarra market as well.
“But I think if you compare it to what’s happening in Sydney, the Illawarra market is remaining relatively insulated from the overall downturn that we’re seeing across Australia.”
The report noted that:
*Kiama houses had a median price of $867,500 as of December 2018. This figure was $897,000 as of December 2017, a year-on-year change of -3.3 per cent.
*Shellharbour houses had a median price of $630,000 as of December 2018, compared to $642,000 a year prior. This was a year-on-year change of -1.9 per cent.
*Shellharbour units had a median price of $540,000; the figure was $542,500 at December 2017.
*Wollongong houses had a median price of $723,125 at December 2018, compared to $740,000 in December 2017.
*Wollongong units had a median price of $570,000 at December 2018; the figure was $590,000 a year prior, a year-on-year change of -3.4 per cent.
Dr Powell said one of the biggest market-related changes they had seen was regarding access to credit.
“We know housing markets are correlated to credit access; whether that’s low interest rates or free-flowing access to credit,” she said.
“What we have seen is the banking sector has tightened its lending standards, meaning it’s harder to attain finance.
“Firstly this impacted really Sydney and Melbourne, but we’re now seeing broader impacts across most of our capital cities.
“And it’s also impacted the Illawarra region… But the Illawarra is actually holding up much firmer than most of our capital cities.”
Meanwhile, the report reveals national house prices recorded the steepest annual fall in 15 years, with Sydney house prices back to mid-2016 levels.
In Sydney, house prices fell 3.2 per cent over the quarter and 9.9 per cent over the year to $1,062,619.
Also, unit prices fell 3.3 per cent over the quarter and 5.8 per cent over the year to $702,012.
Dr Powell said the depth of Sydney’s current house price downturn is the sharpest in more than two decades, although the duration is yet to surpass the 2004-06 slump.
Nationally, house prices fell 1.8 per cent over the quarter and 6.5 per cent over the year to $766,438. Unit prices fell 2.9 per cent over the quarter and 5.3 per cent over the year to $530,999.