Among the hurdles was an influx of Sydney buyers, seemingly looking to relocate to the Illawarra due to the COVID-19 pandemic.

Mr Murray said he was surprised by the increased competition in the Illawarra market during the pandemic.

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"We really saw activity ramp up in the past three months," he said.

"Suddenly there were a lot more people at open houses and two or three offers were being made then and there. We were competing with a lot more buyers from Sydney."

The couple had been renting in Thirroul, and began looking in early 2020.

They weren't eligible for assistance such as stamp duty concessions, or the federal government's First Home Loan Deposit Scheme.

"And interest rates being lower just gives more people access to cash really," Mr Murray told the Mercury.

They bought a three-bedroom early 1900s weatherboard miner's cottage in Woonona in August.

"It's liveable, it just needs a lot of love," Mr Murray said.

Mr Murray said they were "picky about land size", and wanted a home that hadn't been renovated so they could add value.

"A lot of first home buyers will probably choose a nicer townhouse as opposed to a more dated house, or one that needs renovations.

"The value's mainly in the land, so for us I felt like it was a better investment to just try to find something that needed a lot of love, and do all that work ourselves.

"Then hopefully that investment pays off in the future, as opposed to getting into something a bit smaller and more modern, and then in a few years' time needing to move anyway.

"It was hard, because as soon as something had been renovated or updated, it was out of our price range. So there was very little opportunity or stock for us to get our hands on."

Andrew Hedley, sales agent at One Agency Kane Downie, said he was seeing a real spike in demand in the region's northern suburbs.

"I've rarely seen a market quite like this," he said. "Demand is well and truly outstripping supply.

"For example, Thirroul and the surrounding suburbs were recently highlighted as one of the most tightly held areas in the country.

"The first weekend after open homes were permitted again we saw an influx of new buyers to the market, with nine out of 10 coming from Sydney.

"We are likely to see more supply come onto the market in spring and when JobKeeper and banking support finishes up, but any potential for price falls are likely to be negated by increased demand from Sydney."

Aaron Christie-David, managing director and finance broker at Atelier Wealth said for many people, spending more time at home in an effort to socially distance has made them reflect on the importance of having a place to call their own.

"Especially if it means more space, something the Illawarra has in spades," he said.

"It's an attractive proposition for locals, but also Sydney-siders who are now eyeing off a possible move to the Illawarra, made easier by the ability to now work from home."