Dapto and Port Kembla were among the Illawarra suburbs to enjoy significant growth in property values in the midst of the COVID-19 pandemic.
The latest CoreLogic Regional Market Update, which looks at capital growth in Australia's 25 largest non-capital city markets was recently released.
CoreLogic's executive director of research Tim Lawless said regional housing values rose at more than four times the pace than capital city markets over the 12 months to January.
According to the report, there were 5602 residential dwelling sales in the Illawarra from December 2019 to November 2020, which is 15 per cent higher than the previous year.
Strong growth over the 12 months was recorded in the Dapto/Port Kembla area, with values up 11.8 per cent.
In Wollongong, values were up 9.1 per cent over the year, and were up by 7.6 per cent in Kiama/Shellharbour.
"It does look like that more affordable market, which is Dapto/Port Kembla where the median is about $588,000 - which is much lower than the other markets - is where the most growth has been driven from," Mr Lawless said.
Robert Dimovski, owner and principal of the Port Kembla-based Dimosons Real Estate agency said there was currently more demand than supply of properties in Port Kembla.
"I think people are just starting to realise its potential, with the beaches and access to everything," he said.
"I think it's just the market in general in the Illawarra... It's good value, and money's cheap at the moment.
"Port has seen some great growth, but there's other suburbs as well experiencing high demand at the moment."
According to the report, of the total sales in the Illawarra during this period, 0.6 per cent of all units sold fetched more than $2 million, while 2.3 per cent of all house sales fell into this price bracket.
Also, 48.2 per cent of units sold were within the $400,000 to $600,000 range, while 21 per cent of houses did so.
Nearly a third of all houses sold were in the $600,000 to $800,000 range.
Mr Lawless said typically the Illawarra market follows Sydney's lead, albeit with a lag, but this time around regional areas were leading the property cycle.
"I think it's pretty clear that this trend of over-performance compared to Sydney has some legs," he said.
"It's being driven, not just by the opportunity to work flexibly or remotely, but also simply the fact that prices are more affordable in the Illawarra.
"In many cases, lifestyle opportunities are more plentiful, and housing densities are generally lower which seems to be more appealing at the moment. I think it's those factors combined, and that's why we're seeing prices rising so quickly."