An expert says changing conditions within the Illawarra’s residential property sector means 2019 is shaping up to be a buyer’s market.
Property valuation and advisory company Herron Todd White has released its latest report.
Chris McKenna, their residential director of South East NSW said the “tide has well and truly turned” in the Illawarra residential market, and this year seemed set to be a buyer’s market.
“There will be good opportunities throughout 2019 to purchase properties at good prices,” he wrote.
“Finding a vendor who is motivated to sell can benefit a purchaser, particularly if they are the only party to have shown any interest in the listing.”
Mr McKenna identified four factors that have led to the Illawarra market weakening throughout 2018: tighter lending practices; weaker Sydney property market conditions; oversupply; and general negative sentiment and media coverage.
“We expect these factors to remain relevant in 2019 and the market to continue the softening trend of 2018, with the possibility of stabilising at the lower level later in the year,” he said.
The report said the property types to watch in 2019 include two of the hardest hit areas - vacant land in the 2527, 2530 and 2526 postcodes, along with residential units in the Wollongong CBD. “Release of new land will continue in Calderwood, Tullimbar, Horsley, Wongawilli and Kembla Grange,” Mr McKenna said.
The report notes that developers there are competing head to head with those who have previously purchased and are now trying to re-sell.
“We expect supply to outweigh demand throughout 2019 and as a result, prices for land in these areas to continue to drop,” he said.
“The entry price into the Calderwood and Tullimbar subdivisions has dropped back to under $300,000.”
Mr McKenna said Wollongong CBD had a huge transformation on the back of the 2013-2017 property boom, with an unprecedented amount of residential unit construction throughout this period.
“Despite the slowdown in off-the-plan and general sales, development has continued into 2019 with a number of large scale developments commencing construction including Avantè, Parq, Signature and Skye, developments which total 544 units between them.”
Mr McKenna expected the high supply of new units to continue to affect both the newer and older style unit markets and prices.
He said purchasers now have more and more choice and on the back of media exposure of “construction failures such as Sydney’s Opal Tower”, believes they will become more informed and diligent with investigations into who is building these new unit complexes.
“Experienced local builders with a proven track record will remain in demand, while new builders or those who can’t provide evidence of past work, may find purchasers being wary.”
The report also notes that work is on track to have the Shellharbour Marina completed, with the first berths anticipated to open in 2019.
Mr McKenna said the Shell Cove market took a hit similar to all other residential markets recently.
However, he said continued positive construction news such as the recent Woolworths anchored town centre first stage, along with the opening of the marina will provide a shift in market sentiment “that may be able to stir up a bit of life in 2019”.