Some Sydney residents wanting to relocate to the Illawarra's northern suburbs are being "blown away" by the property prices in those markets, and are therefore looking at options further south.
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New figures have also shown where the majority of buyers in various Illawarra suburbs are coming from.
The DiJones 2020-2021 Annual Market report, launched this week, includes analysis for the Illawarra over the 2020/21 financial year.
Josh Kersten, regional sales manager for the Illawarra said a major factor driving the Illawarra property market was the rate of people migrating to the area, especially since the onset of the COVID-19 pandemic.
However, Mr Kersten said many people who had planned to come down from Sydney over the past 12 to 18 months typically started their search in the Illawarra's northern suburbs, but were soon forced to broaden it due to the price point.
"Then they've realised how expensive it is, and some have been priced out of that market," he said.
"It's blown people away coming into those areas just how expensive it's become.
"So what's happened is, areas like Towradgi, Corrimal, East Corrimal, even suburbs like Bellambi... They've worked their way down the coast (after they were) priced out of those particular northern markets, but then that's caused another price spike in those usually affordable suburbs.
"They've always been attractive to us, living in this region. But they've (out of area buyers) come down and looked at those, and come down as far south as areas like Figtree, West Wollongong and Wollongong, because it's still in close proximity to Wollongong rail for commuting to get back to Sydney."
According to the report, during the past financial year, Austinmer house buyers predominantly came from the Eastern Suburbs (30 per cent), Wollongong and Illawarra (19 per cent) and Inner West (nine per cent).
In Thirroul, house buyers mainly came from the Eastern Suburbs (26 per cent), Wollongong and Illawarra (15 per cent) and Sutherland (11 per cent).
In Stanwell Park, house buyers largely came from the Eastern Suburbs (30 per cent), Sutherland (15 per cent), Inner West (12 per cent) and North Shore - Lower (10 per cent).
Mr Kersten said suburbs such as Lake Heights and Berkeley had experienced significant growth not just in the past 12 months, but five years.
"They're high growth areas which are just south of Wollongong," he said.
"There's some nice outlooks there with a lot of the properties, and it's close to the lake.
"Bellambi is another one that may have been on the nose years ago, but it's changing.
"Corrimal is has also done really well. And Balgownie, while there's not a lot of turnover there, there's been really big results in that suburb, which is traditionally an older, tightly held suburb."
According to the figures, while the majority of house buyers in Towradgi were from Wollongong and the Illawarra (42 per cent), others hailed from St George (15 per cent) and the Eastern Suburbs, Inner West, Sydney City, North Shore - Upper, Western Sydney and Sutherland (five per cent each).
In Bellambi, house buyers were from Wollongong and the Illawarra (47 per cent), Sutherland (18 per cent) and Eastern Suburbs (13 per cent).
In Corrimal, house buyers were coming from Wollongong and the Illawarra (37 per cent), Eastern Suburbs (15 per cent) and Sutherland (14 per cent).
DiJones CEO Dean Mackie said the Illawarra region was coastal, but was "still a town that's got a little bit more of an urban edge about it".
"I think it's starting to appeal to people who are thinking that, 'maybe I've been priced out in Sydney, but the accessibility to Sydney is still pretty close'," Mr Mackie said.
"And equally, it's a nice gateway down to the South Coast, which is such a beautiful part of the world."