Illawarra buyers can now afford to shop around and "make sure you get the right type of property", an economist believes.
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The downturn in Australia's residential market is approaching bottom but any meaningful recovery remains a way off, according to industry analyst and economic forecaster, BIS Oxford Economics.
According to the company's Residential Property Prospects 2019 to 2022 report, the upturn in Wollongong lagged the Sydney market, and prices have also held up better through the Sydney market downturn, partly supported by stamp duty exemptions being offered for first home buyers.
Also, the report notes that being closer to Sydney, the price falls there will reduce trade-down activity into Wollongong, with the median house price in the area forecast to rise by a total of five per cent in the three years to June 2022.
BIS associate director Angie Zigomanis said they estimated about a quarter of workers who live in the Wollongong council area commute to Sydney for their job.
"Because Sydney prices have fallen, there are people who sell up and move down to Wollongong, or there are first home buyers who go to Wollongong because Sydney prices are out of reach," he told the Mercury.
Mr Zigomanis said falling interest rates and credit conditions easing would see the downturn stabilised, and eventually price growth would start to occur again.
"Having said that, we don't expect a really strong upturn," he said.
"While credit conditions may be a little easier, banks are still going to be fairly conservative in how they're assessing incomes and expenditures... So that will affect how far prices can go up.
"So we expect a modest recovery, but by no means a big, strong surge in prices."
Therefore, Mr Zigomanis said prices in the Illawarra should be "pretty flat" in the next 12 months or so, and expected much of the growth to come through most likely in 2021-2022.
"That'll come about as the current round of construction works its way through, and falls away.
"There's still fairly solid population growth coming through, and so that starts soaking up the stock and causing markets to tighten again.
"You'll start seeing rental growth come through, and investors become more attracted to the market and owner-occupiers becoming more attracted as well as the rents goes up - the classic cycle.
"At the moment Illawarra buyers are probably in a situation where you can afford to shop around, and make sure you get the right type of property without prices running too far ahead of you."