The region may also experience a further influx of buyers from outside the Illawarra, as the COVID-19 pandemic leads to larger numbers of people working from home.

CoreLogic's regional market update, published each quarter, covers the 20 largest regional property markets in Australia.

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According to the report, broader regional housing values have held firm through the COVID-19 period compared with the capital cities.

Dwelling values across the combined regional areas of Australia dropped by just 0.1 per cent between March and the end of July, while capital city home values are down two per cent over the same period.

According to the report, the Illawarra topped the regions in the yearly price growth category between June 2019 and June 2020, with a 12 per cent increase.

CoreLogic head of research Tim Lawless did note that much of the recorded growth occurred prior to the pandemic.

"But even since March, we've still seen that Illawarra housing values have still been rising," he said.

"The market's clearly lost momentum. But even just over recent months up to the end of July, we saw the Illawarra market hold firm.

"Over the past three months through the end of July, Illawarra housing values are up 0.9 per cent.

"The market is still showing relative resilience as of the end of July."

The region was also first in the 'change in sales volume' category of the report, with a 14 per cent increase in the number of sales over the 12-month period.

"Keep in mind that this time last year the market was only just starting to emerge from a two-year correction," Mr Lawless said.

"But it does show that demand had really bounced back in the marketplace.

"It looks like the affordability of the Illawarra, along with a fairly diverse and dynamic economy were the key drivers of that growth."

Mr Lawless said the median house price in the Illawarra was $704,000 as of June this year, which was about $300,000 less than Sydney.

"So it really highlights the affordability advantage that the regions are offering," he said.

"Probably one of the reasons why the (Illawarra) market's been quite resilient, is it has that affordability advantage that's quite popular with first home buyers, as well as people looking for a lifestyle change.

"One of the benefits of COVID (for regions) is markets like Illawarra or Newcastle that are adjacent to Sydney may become even more popular as we see remote working becoming a little more mainstream."

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