There's a glimmer of hope on the rental front, with some suburbs within the Illawarra seeing a drop in rental prices in recent months.
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However, the numbers are small.
Just 10.2 per cent of suburbs throughout the Illawarra have experienced a drop in overall house rents during the past quarter, new figures have revealed.
Yet at least one suburb has experienced a "sizeable" drop in average prices during this time period.
The figures, courtesy of CoreLogic, are for the three months to the end of July.
For Illawarra houses, 49 suburbs were analysed by CoreLogic - and only five had experienced rent falls in the past quarter.
For Illawarra units, of 18 suburbs examined, only three were in decline.
Eliza Owen, head of research Australia for CoreLogic said the suburbs in the region where rents had decreased slightly tended to be more expensive rental markets, such as the $773 a week median rent in Kiama Downs.
"I would suggest more expensive markets might be the first to see a drop-off in demand," she said.
Ms Owen said the $20 per week median decrease in Towradgi house rents (for the three months to the end of July) represented a "stark" change over a quarterly period.
"That's quite a strong quarterly decline," she said. "That's sizeable for a three-month movement, and maybe it speaks to how rapidly people are starting to realise that some of these markets are over-priced by now.
"And hopefully it continues to shift to more of a tenants' market over the course of the next 12 months."
Ms Owen said even in the suburbs where rents are declining, the decline is off the back of large increases and high rents at this stage.
"Another factor for the Illawarra may be more of a normalisation in migration trends post-COVID lockdowns," she said.
"It could be because we're seeing younger people in particular go from these big regional centres to capital cities for work and study, that this might start to reverse the pressures in the rental market a little.
"But obviously they're still fairly high (prices)."
Ms Owen said rent values rose for the 35th consecutive month nationally in July.
However, monthly rent growth has eased over the past four months. In regional Australia, rent value growth has been slowing since April last year, and rents are close to flattening out (albeit at high levels).
She said slowing rent growth is expected to be one of the key housing market trends next year, for several reasons.
"Firstly, the cash rate is expected to fall, which could increase investment and first home buyer activity," she said.
"Secondly, income growth is expected to slow, which might prompt a change in housing preferences.
"Lastly, stretched rental affordability could see movements to more affordable areas, and base effects mean there will be a limit to how high growth can go."
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Brendan Crabb
I'm a member of ACM's national property team, covering the Illawarra and South Coast. Based in Albion Park, NSW, I write about exciting, interesting or just downright quirky properties that have been listed for sale, major sales, market trends, auctions and more. One of my favourite aspects of being a journalist is I believe everyone has a story to tell. What's yours?
I'm a member of ACM's national property team, covering the Illawarra and South Coast. Based in Albion Park, NSW, I write about exciting, interesting or just downright quirky properties that have been listed for sale, major sales, market trends, auctions and more. One of my favourite aspects of being a journalist is I believe everyone has a story to tell. What's yours?
