The Illawarra was the only major region in NSW to have development approvals increase over the past 12 months, a report has found.
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This increase was largely due to a surge in approvals for new dwellings in the Shellharbour area.
The Urban Development Institute of Australia NSW's latest quarterly report looks at the Greater Sydney, Central Coast, Lower Hunter and Illawarra regions.
According to the report, approvals for new dwellings across the Illawarra have held up better than other major regions covered in the report, assisted by a strong multi-unit approvals pipeline in the Shellharbour LGA.
The report details the number of building approvals in the 12 months to May 2018, compared to the 12 months to May 2019.
In Shellharbour, the 2019 figures indicated there were approvals for 707 detached dwellings, a 163 per cent increase on a year prior (268).
Meanwhile, the approvals for multi-unit dwellings more than doubled, from 408 in 2018 to 958 this year.
UDIA NSW's Greater Western Sydney & Southern Region manager Keiran Thomas said much of this growth was likely attributable to major projects such as Shell Cove.
In the Wollongong LGA, in the 12 months to May 2019, 421 detached dwellings and 691 multi-unit dwellings were approved, compared to 538 and 1087 a year prior.
In Kiama, 2019 figures showed 80 detached dwellings and 44 multi-unit dwellings were approved, compared to the 2018 totals of 147 and 113 respectively.
Mr Thomas said the Illawarra also fared better than Sydney in terms of decreasing house and apartment sale prices.
The median sale price of new houses across the Illawarra dropped 4.3 per cent over the six months to April 2019, to $689,000.
This represents a 32 per cent pricing discount to the Greater Sydney market, which has narrowed from 12 months earlier when the differential was 37 per cent.
"This has closed the gap in sale prices a bit, so average sales are now only 32 per cent cheaper in the Illawarra compared to Sydney," he said. "However, sales volumes are down and vacancy rates are generally trending slightly up, so we need to manage these factors."
The report also found that new unit median pricing in the Illawarra declined 1.4 per cent over the six months to April 2019 to $599,500, which represented a 21 per cent discount on Greater Sydney new unit pricing.
Other findings were that sales volumes remain low across the region, with house sales down 20 per cent and unit sales down 16 per cent for the Wollongong LGA for the 12 months to April 2019.
However, Mr Thomas said the outlook is positive overall for the Illawarra market.
"We are faring better than Sydney from the downturn, which seems to be at or close to its end," he said.
UDIA NSW is a leading industry body representing the interests of the NSW property development sector.
