Record sale prices will be set across multiple Illawarra suburbs as the property market in the region continues to thrive during the spring selling season.
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That's according to an Illawarra academic, who has also warned that price growth will become more volatile in the longer term.
As the typically strong spring selling season kicks off this week, Alex Frino, Professor of Economics at the University of Wollongong said even during lockdown, the region's property prices kept marching forward.
Professor Frino said for the first half of 2021, property prices in the region increased by 15 per cent, and 17 per cent to the end of July.
"I think the market will be hot for the next three months," he said.
"I think we're going to see new records set for the Illawarra in terms of prices. I think we're going to see all kinds of records across multiple suburbs set over the next three months with prices so high."
However, he had some longer-term concerns regarding the market, believing a "bubble" was forming in the NSW market.
"Things like incomes are flat, the economy is weak in lockdown, we're in negative growth," he said.
"There's nothing out there that could explain why property prices should have run at 17 per cent in seven months, when for the whole of last year they ran at eight per cent.
"The Illawarra market is hot, very hot. I just can't see how much further they could rise."
Professor Frino said he believed in the next 12 to 18 months that "we're in for some volatility".
"Bubbles typically keep rising, and I just can't see how much further they could rise.
"Are we going to get to 25 per cent by the end of the year? It's entirely possible if everything remains hot. But at some point, everything comes to a crunch because the debt that you need to put on to purchase a property and sustain it becomes unserviceable."
Auction bookings increasing
Jake Mackenzie is Illawarra chairman of the Real Estate Institute of NSW, and also works as an auctioneer for the online selling platform AuctionNow.
Mr Mackenzie said traditionally spring time created a "frenzy" within the market.
"But we've somewhat seen that even through winter, despite the lockdowns and everything that's happened," he said.
"I think there will be more stock that comes on the market, and we're seeing that through auction bookings. They're increasing for this spring period.
"I think there were a certain amount of people who haven't waited [for spring], they've just listed their home. Probably the hesitation to come on the market [from some] wasn't because of waiting for spring, it was probably more hesitation around the selling conditions due to COVID."
However, Mr Mackenzie said strong clearance rates had given sellers more confidence, while Illawarra buyers had become more familiar with the online auction method.
"I think the market will hold - there's plenty of buyers still out there," he said.
"It's still tough for buyers due to the lack of stock, and you're still competing with other buyers.
"But I think the competition isn't nearly what it was when open homes could go ahead. Now it's probably more just the serious buyers that are looking.
"You aren't getting the people who are just curious about the market and going out to inspect properties, which then could add to the competition on auction day."