The important reason that rising property value is good news is that real estate represents up to 80 percent of the wealth of Illawarra residents, because people's homes are generally their biggest asset.

This has flow-on effects.

Real estate prices fell for 15 months in a row in the Illawarra from May 2018 to July 2019. The peak to trough fall in real estate prices was 13 percent.

That meant that the average Illawarra family owning a house worth around $750,000 would have lost about $100,000 of their wealth over the last 15 or so months.

When people lose wealth in this way, economic theory tells us that they spend less. This in turn has a downward impact on business and on jobs. Of course the economy takes time to respond in this way - but eventually it does respond.

And we may be starting to see this side-effect in the Illawarra. According to the latest unemployment figures for the region released late last month, the average unemployment rate for the Illawarra since the beginning of the year to August has been running at about 5.2%. This is around 0.3% higher than the average for the previous year - which means that there are about 500 less people in employment across the region.

Part of the reason for this is the (lagged) effect of real estate price falls - but there are bigger forces at work here.

We heard this week that the International Monetary Fund has cut its forecasts for the Australian economy from a growth rate of 2.1 percent to 1.7 percent. In its latest World Economic Outlook, the IMF says Australia's economy will weaken to 1.7 per cent growth in 2019, which is down a full percentage point from the 2018 level of 2.7 percent.

The IMF's prediction is substantially lower than our own Treasury and Reserve Bank has forecast for the Australian economy, and is cause for concern.

We are seeing evidence of this locally, which means that unemployment in the Illawarra is odds-on to rise.

Australia's woes reflect the rest of the world, where trade tensions between the United States and China and the ramifications of the prolonged and problematic Brexit negotiations between the United Kingdam and European nations are causing global uncertainty.

According to IMF Managing Director Kristalina Georgieva, we are seeing a "synchronized slowdown" in the global economy. Ms Georgieva said trade tensions had "substantially weakened" manufacturing and investment activity worldwide, and she warned that the cumulative effect of trade conflicts could mean a $700 billion reduction in global gross domestic product (GDP) output by 2020, or around 0.8%.

That is certainly worrying, and the Australian Bureau of Statistics released another piece of concerning information last week for the Illawarra Region - falling building approvals.

As real estate prices head south, so do worthwhile building projects. Falling real estate prices mean that properties acquired for development will return a smaller profit - if any. This means fewer approved building projects will be activated, and developers will also be less likely to apply for new approvals for building projects.

According to the latest figures released for the Illawarra, building approvals since the start of the new financial year fell a staggering 25 percent compared to the same time last year.

Building approvals hit an all time high of $1.4 billion for the Illawarra in the 2018-19 financial year . However, after holding up well in the face of the downturn in property prices, they are now clearly falling.

This will be having an impact on unemployment, because the construction sector has been one of the fastest growing in the Illawarra region over the last few years.

And fewer building projects don't just mean fewer construction jobs, but also impact on suppliers and other businesses that flourish when the building trades are doing well.

It took about 12-18 months for building approvals to respond (negatively) to falls in real estate prices. So even though property prices are now rebounding, we can expect building approvals to remain lacklustre over the next 12-18 months before they begin to respond and new projects start coming on line.

All in all, the economic news for the region is not great. However, with property markets rebounding homeowners are regaining their wealth lost in the property downturn and there is some cause for optimism if this feeds through to retail spending.

Alex Frino is Professor of Economics and Deputy Vice-Chancellor (Global Strategy) at vthe University of Wollongong.

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